EXHIBIT 2.01
Asset Purchase Agreement dated as of September 10, 1996 by and between Delrina
Corporation and JetForm Corporation
DELRINA CORPORATION
- AND -
JETFORM CORPORATION
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ASSET PURCHASE AGREEMENT
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DATED SEPTEMBER 10, 1996
TABLE OF CONTENTS
ARTICLE 1 INTERPRETATION . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Headings and Table of Contents. . . . . . . . . . . . . . 11
1.3 Number and Gender . . . . . . . . . . . . . . . . . . . . 12
1.4 Business Days . . . . . . . . . . . . . . . . . . . . . . 12
1.5 Currency and Payment Obligations. . . . . . . . . . . . . 12
1.6 Statute References. . . . . . . . . . . . . . . . . . . . 12
1.7 Section and Schedule References . . . . . . . . . . . . . 12
ARTICLE 2 PURCHASE OF ASSETS. . . . . . . . . . . . . . . . . . . . 13
2.1 Agreement to Purchase and Sell. . . . . . . . . . . . . . 13
2.2 Amount of Purchase Price. . . . . . . . . . . . . . . . . 13
2.3 Payment of Purchase Price . . . . . . . . . . . . . . . . 14
2.4 Issuance of Purchaser's Common Shares . . . . . . . . . . 14
2.5 Adjustments to Purchase Price . . . . . . . . . . . . . . 15
2.6 Timing of Payment of Adjustments. . . . . . . . . . . . . 16
2.7 Moral Rights to Software and Intellectual Property. . . . 16
2.8 Licenses. . . . . . . . . . . . . . . . . . . . . . . . . 16
2.9 Site License. . . . . . . . . . . . . . . . . . . . . . . 16
2.10 GST Election. . . . . . . . . . . . . . . . . . . . . . . 16
2.11 Sublease of Leased Premises . . . . . . . . . . . . . . . 17
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2.12 Default Interest Rate . . . . . . . . . . . . . . . . . . 17
ARTICLE 3 CONVEYANCE. . . . . . . . . . . . . . . . . . . . . . . . 17
3.1 Instruments of Conveyance . . . . . . . . . . . . . . . . 17
3.2 Execution . . . . . . . . . . . . . . . . . . . . . . . . 18
3.3 Vendor's Deliveries . . . . . . . . . . . . . . . . . . . 18
3.4 Purchaser's Deliveries. . . . . . . . . . . . . . . . . . 18
3.5 Possession. . . . . . . . . . . . . . . . . . . . . . . . 18
3.6 Non-Transferable and Non-Assignable Assets. . . . . . . . 18
ARTICLE 4 REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . 19
4.1 Representations and Warranties of the Vendor. . . . . . . 19
(1) Incorporation and Power . . . . . . . . . . . . . . . . . 20
(2) Due Authorization . . . . . . . . . . . . . . . . . . . . 20
(3) Enforceability of Obligations . . . . . . . . . . . . . . 20
(4) Title to Assets . . . . . . . . . . . . . . . . . . . . . 20
(5) Personal Property . . . . . . . . . . . . . . . . . . . . 21
(6) Leased Premises . . . . . . . . . . . . . . . . . . . . . 21
(7) Personal Property Leases. . . . . . . . . . . . . . . . . 21
(8) Material Contracts. . . . . . . . . . . . . . . . . . . . 22
(9) Inventories . . . . . . . . . . . . . . . . . . . . . . . 22
(10) Software. . . . . . . . . . . . . . . . . . . . . . . . . 22
(11) Intellectual Property . . . . . . . . . . . . . . . . . . 23
(12) Licences and Permits. . . . . . . . . . . . . . . . . . . 25
(13) Consents and Approvals. . . . . . . . . . . . . . . . . . 25
(14) Notices . . . . . . . . . . . . . . . . . . . . . . . . . 25
(15) Absence of Conflicting Agreements and Infringement. . . . 25
(16) Litigation. . . . . . . . . . . . . . . . . . . . . . . . 26
(17) Environmental Matters . . . . . . . . . . . . . . . . . . 26
(18) Employees and Employment Contracts. . . . . . . . . . . . 26
(19) Collective Agreements . . . . . . . . . . . . . . . . . . 27
(20) Customers and Suppliers . . . . . . . . . . . . . . . . . 27
(21) Residence of Vendor . . . . . . . . . . . . . . . . . . . 27
(22) Deductions at Source. . . . . . . . . . . . . . . . . . . 28
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(23) GST . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
(24) Financial Statements. . . . . . . . . . . . . . . . . . . 28
(25) Software Revenue. . . . . . . . . . . . . . . . . . . . . 28
(26) Brokerage Fees. . . . . . . . . . . . . . . . . . . . . . 28
(27) Bulk Sales. . . . . . . . . . . . . . . . . . . . . . . . 28
4.2 Representations and Warranties of the Purchaser . . . . . 29
(1) Incorporation and Power . . . . . . . . . . . . . . . . . 29
(2) Due Authorization . . . . . . . . . . . . . . . . . . . . 29
(3) Filings . . . . . . . . . . . . . . . . . . . . . . . . . 29
(4) Enforceability of Obligations . . . . . . . . . . . . . . 29
(5) Litigation. . . . . . . . . . . . . . . . . . . . . . . . 29
(6) No Violation of Existing Agreements . . . . . . . . . . . 30
(7) Disclosure. . . . . . . . . . . . . . . . . . . . . . . . 30
(8) Compliance with Laws. . . . . . . . . . . . . . . . . . . 31
(9) Brokerage Fees. . . . . . . . . . . . . . . . . . . . . . 31
(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
4.3 Survival of Representations and Warranties. . . . . . . . 31
ARTICLE 5 INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . 32
5.1 Indemnity by the Vendor . . . . . . . . . . . . . . . . . 32
5.2 Indemnity by the Purchaser. . . . . . . . . . . . . . . . 32
5.3 Limitations . . . . . . . . . . . . . . . . . . . . . . . 33
5.4 Notice of Claim . . . . . . . . . . . . . . . . . . . . . 33
5.5 Direct Claims . . . . . . . . . . . . . . . . . . . . . . 34
5.6 Third Party Claims. . . . . . . . . . . . . . . . . . . . 34
5.7 Settlement of Third Party Claims. . . . . . . . . . . . . 34
5.8 GST Gross-up. . . . . . . . . . . . . . . . . . . . . . . 35
5.9 Set-off . . . . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE 6 EMPLOYEES . . . . . . . . . . . . . . . . . . . . . . . . 35
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6.1 Offer of Employment . . . . . . . . . . . . . . . . . . . 35
6.2 Settlement by Vendor. . . . . . . . . . . . . . . . . . . 35
6.3 Notice of Change of Employment. . . . . . . . . . . . . . 36
ARTICLE 7 POST-EFFECTIVE DATE MATTERS . . . . . . . . . . . . . . . 36
7.1 Excluded Assets . . . . . . . . . . . . . . . . . . . . . 36
7.2 Co-operation in Filing of Returns . . . . . . . . . . . . 36
7.3 Non-Merger. . . . . . . . . . . . . . . . . . . . . . . . 36
7.4 Further Assurances. . . . . . . . . . . . . . . . . . . . 37
7.5 Assistance. . . . . . . . . . . . . . . . . . . . . . . . 37
7.6 Transition Arrangements . . . . . . . . . . . . . . . . . 37
7.7 Fulfilment of Contracts . . . . . . . . . . . . . . . . . 38
7.8 Returned Software . . . . . . . . . . . . . . . . . . . . 38
7.9 Net Revenue Verification. . . . . . . . . . . . . . . . . 39
ARTICLE 8 GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.1 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . 39
8.2 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . 39
8.3 Announcements . . . . . . . . . . . . . . . . . . . . . . 40
8.4 Notices . . . . . . . . . . . . . . . . . . . . . . . . . 40
8.5 Time of Essence . . . . . . . . . . . . . . . . . . . . . 42
8.6 Entire Agreement. . . . . . . . . . . . . . . . . . . . . 42
8.7 Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . 42
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8.8 Severability. . . . . . . . . . . . . . . . . . . . . . . 42
8.9 Arbitration . . . . . . . . . . . . . . . . . . . . . . . 42
8.10 Language. . . . . . . . . . . . . . . . . . . . . . . . . 44
8.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . 44
8.12 Successors and Assigns. . . . . . . . . . . . . . . . . . 44
8.13 Counterparts. . . . . . . . . . . . . . . . . . . . . . . 45
THIS ASSET PURCHASE AGREEMENT dated September 10, 1996,
B E T W E E N
DELRINA CORPORATION (the "Vendor")
- and -
JETFORM CORPORATION (the "Purchaser")
RECITALS
A. The Vendor is in the business of developing, manufacturing, marketing,
distributing and providing technical and customer support for computer software;
B. The Vendor carries on the Business and is desirous to sell the Assets
to the Purchaser under the terms set out below; and
C. The Purchaser is desirous of purchasing the Assets under the terms set
out below.
For good and valuable consideration, the receipt and adequacy of which
is 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:
(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
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contract or otherwise; and the term "controlled" shall have a similar
meaning.
(2) "AGREEMENT" means this Asset Purchase 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 relating or applicable to
such Person, property, transaction, event or other matter but
excluding any law of general application relating to competition,
competitors, antitrust or similar matters which is applicable to the
within transaction. Applicable Law also includes, where appropriate,
any interpretation of the Law (or any part) 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 the
Vendor which are Related to the Business (other than the Excluded
Assets) including the following:
(a) the Software;
(b) the Intellectual Property;
(c) the Contracts;
(d) the Leased Premises and all leasehold improvements owned by the
Vendor and forming part of the Leased Premises;
(e) the Personal Property;
(f) the Inventories;
(g) all rights and interests 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 or
the Assumed Liabilities or otherwise Related to the Business;
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(h) the Licences and Permits;
(i) the Prepaid Amounts;
(j) the Books and Records;
(k) all goodwill Related to the Business including the present
internet addresses;
(l) all proceeds of any or all of the foregoing accruing and received
or receivable after the Effective Time; and
(m) the Purchaser Licensed Software.
(5) "ASSUMED LIABILITIES" means only the Liabilities of the Vendor listed
in Schedule 1.1(5) to be assumed by the Purchaser that are Related to
the Business arising and accruing in respect of the period from and
after the Effective Time.
(6) "AUDITED REVENUE STATEMENT" means the Special Report of the auditors
of the Vendor prepared in accordance with the procedures set out in
Section 5800 of the Canadian Institute of Chartered Accountant
Handbook with respect to an opinion based on generally accepted
auditing principles of the auditors of the Vendor in the manner
provided in Section 7.9 of the revenue realized from the licensing of
Software by the Vendor for the June, July and August fiscal months
ended August 23, 1996, net of all returns in excess of reserves
therefor and other set offs in such period, as prepared by Ernst &
Young and delivered to the Purchaser by the Vendor on or before
September 27, 1996.
(7) "BEST OF THE VENDOR'S KNOWLEDGE" means the knowledge of the officers
of the Vendor, in each case having made due inquiries.
(8) "BEST OF THE PURCHASER'S KNOWLEDGE" means the knowledge of the
officers of the Purchaser, in each case having made due inquiries.
(9) "BOOKS AND RECORDS" means all books, records, files and papers Related
to the Business or the Assets including drawings, engineering
information, computer programs (including source code), software
programs, manuals and data, sales and advertising materials, sales and
purchases correspondence, trade association files, research and
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development records, softcopy of lists and databases of present and
former customers, suppliers, end user registrations and order history,
research and development personnel, sales and marketing personnel,
employment and other records, and all copies and recordings of the
foregoing. To the extent that Books and Records relate to both the
Business and operations that do not Relate to the Business, Vendor
will only deliver to Purchaser a copy of such Books and Records and
shall retain the original.
(10) "BUSINESS" means the Delrina PC Forms Software Group business carried
on by the Vendor which primarily involves development, marketing,
distribution, sale and servicing of the Software.
(11) "BUSINESS DAY" means any day except Saturday, Sunday or any day on
which banks are generally not open for business in the City of Ottawa,
Ontario.
(12) "CLAIM" has the meaning given in Section 5.1.
(13) "COMMON SHARES" means the Common Shares in the capital of the
Purchaser.
(14) "CONDITION OF THE BUSINESS" means the financial condition, properties,
Assets, Liabilities and operations of the Business taken as a whole.
(15) "CONSENTS AND APPROVALS" means all consents and approvals required
under Applicable Law or Contracts to be obtained in connection with
the execution and delivery of this Agreement and the completion of the
transactions contemplated by this Agreement.
(16) "CONTRACTS" means all rights and interests of the Vendor to and in all
pending and/or executory contracts, agreements, licenses, leases and
arrangements Related to the Business to or by which the Vendor or any
of the Assets or Business is bound or affected including the Material
Contracts and the Leases but not including the Excluded Contracts.
(17) "CURRENT MARKET PRICE" means at any particular date the closing sale
price (or if none, the average of the high and low bid prices) at
which the Common Shares traded as quoted on the Nasdaq Stock Market,
or if not then quoted, on such exchange on which such shares are
listed
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and posted for trading as may be selected for such purpose by
the board of directors of the Purchaser, or if the Common Shares are
not then listed on any stock exchange in the over-the-counter market,
in each case, during the three consecutive trading days ending on the
third trading day prior to such particular date, and if the Common
Shares are not so traded in the over-the-counter market, the current
market price as determined in good faith by the Board of Directors of
the Purchaser.
(18) "DIRECT CLAIM" has the meaning given in Section 5.4.
(19) "EFFECTIVE DATE" means September 10, 1996.
(20) "EFFECTIVE TIME" means the opening of business on the Effective Date
or such other time as the Parties may agree shall be the Effective
Time.
(21) "EMPLOYEE" means an individual listed in Schedule 4.1(18) who is
employed by the Vendor in the Business.
(22) "ENVIRONMENTAL LAWS" means Applicable Law in respect of the natural
environment, public or occupational health or safety, and the
manufacture, importation, handling, transportation, storage, disposal
and treatment of Hazardous Substances.
(23) "EXCLUDED ASSETS" means only the following property and assets of the
Vendor:
(a) all assets, properties, interests and rights not Related to the
Business;
(b) all rights and interests in and to all employee plans of the
Vendor and any related assets or insurance policies;
(c) the rights of the Vendor relating to this Agreement or any
agreements or documents made pursuant to this Agreement;
(d) all Excluded Contracts;
(e) all Receivables and deferred revenue existing on the Effective
Date and all cash on hand or in banks or other depositories; and
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(f) Vendor Licensed Software.
(24) "EXCLUDED CONTRACTS" means the contracts and agreements listed in
Schedule 1.1(24) under the heading "Excluded Contracts".
(25) "EXCLUDED LIABILITIES" means all Liabilities of the Vendor other than
the Assumed Liabilities.
(26) "EXCLUDED LIENS" means the interest of lessors in the Personal
Property being leased by the Vendor and transferred to the Purchaser
hereunder.
(27) "FINANCIAL STATEMENTS" has the meaning given in Section 4.1(24).
(28) "GAAP" means those accounting principles which are recognized as being
generally accepted in Canada and in the US from time to time as set
out in the handbook published by the appropriate institute of
accountants, consistently applied by the party in question.
(29) "GST" means goods and services tax imposed under Part IV of the EXCISE
TAX ACT (Canada).
(30) "HAZARDOUS SUBSTANCE" means any solid, liquid, gas, odour, heat,
sound, vibration, radiation or combination of them that may impair the
natural environment, injure or damage property or plant of animal life
or harm or impair the health of any individual.
(31) "INCLUDING" means "including without limitation", and "INCLUDES" means
"includes without limitation".
(32) "INDEMNIFIED PARTY" means a Person whom the Vendor or the Purchaser,
as the case may be, has agreed to indemnify under Article 5.
(33) "INDEMNIFYING PARTY" means, in relation to an Indemnified Party, the
Party to this Agreement which has agreed to indemnify that Indemnified
Party under Article 5.
(34) "INTELLECTUAL PROPERTY" means all rights to and interests Related to
the Business in:
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(a) trademarks, service marks, trade names, names, logos,
slogans and franchises together with the goodwill related
thereto excluding "Delrina" but including all registrations
and applications to register any of the foregoing with any
agency or authority and the exclusive right of the Purchaser
or any subsidiary of the Purchaser to hold itself out as the
successor owner thereof;
(b) patents, patent applications, patent rights, inventions and
designs, and any registration thereof with any agency or
authority including issued patents, patent applications, re-
issues or patents of additions, continuations in part,
divisionals and filing priorities;
(c) all Software, copyrights (including audiovisual copyrights)
and design rights and all registrations and applications
thereof;
(d) trade secrets including all processes, know-how, technical
data, shop rights, and any media or other tangible
embodiment thereof and all descriptions thereof;
(e) other technology, intellectual property, industrial and
intangible property constituting, embodied in or pertaining
to, any assets including without limitation processes, lab
journals, notebooks, manuals, data computer programs, source
code, discoveries, databases, and documentation, flow
charts, research and development, reports, agency
information, technical information, engineering data, design
and engineering specifications and similar recordings;
(f) all other intellectual and industrial property rights
throughout the world and all confidential and proprietary
information related to any of (a) to (e), both inclusive,
above;
(g) all rights to secure renewals, re-issuances and extension of
(a) to (e), both inclusive, above;
(h) all future income and proceeds of (a) to (g), both
inclusive;
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(i) all rights to damages and profits by reason of the
infringement of (a) to (g) both inclusive; and
(j) a non-exclusive license to utilize the name "Delrina" for
the purposes of carrying on the Business, for a period of
one year from the Effective Date which license the Vendor
grants to the Purchaser hereunder subject to the
restrictions set out in Schedule 1.1(34)(j).
(35) "INVENTORIES" means all inventories of stock-in-trade and merchandise
including materials, supplies, work-in-progress, finished goods,
tooling, service parts and purchased finished goods Related to the
Business (including those owned by the Vendor but in possession of
suppliers, customers and other third parties and including inventories
returned to the Vendor following the Effective Date, which the Vendor
agrees to deliver to the Purchaser on the first day of each month in
respect of the inventories returned in the prior month).
(36) "LAW" means any law, including common law, rule, statute, regulation,
order, judgment, decree, treaty or other requirement having the force
of law.
(37) "LEASED PREMISES" means approximately 14,500 square feet of premises
located at 895 Don Mills Road, Toronto, Canada, Related to the
Business which is leased or occupied by the Vendor under the Premises
Leases at a current rental rate on a gross basis of CDN$17.40 per
square foot.
(38) "LEASES" means the Personal Property Leases and the Premises Leases.
(39) "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.
(40) "LICENSED SOFTWARE" means any third party software contained in or
necessary for the operation or development of the Software as listed
in Schedule 1.1(40) which Schedule sets out the payment terms and
obligations thereunder.
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(41) "LICENCES AND PERMITS" means all governmental licences, permits,
filings, authorizations, approvals or indicia of authority Related to
the Business or necessary for the conduct of the Business.
(42) "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 excluding any contract or
license rights disclosed hereunder.
(43) "MATERIAL CONTRACT" means an agreement (whether oral or written)
Related to the Business to which the Vendor is a party or by which the
Vendor or any of the Assets or the Business is bound except an
agreement which involves or may reasonably be expected to involve the
payment to or by the Vendor of less than $25,000 over the term of the
agreement, does not allow the return of Software, (excluding end user
licenses for shrink wrap product and site licenses each with a value
of less than $10,000) does not provide meaningful access to, surrender
of, or forfeiture of the source code of the Software, and is not
otherwise material to the Condition of the Business.
(44) "NOTICES" means the notices required to be given to any Person under
Applicable Law or pursuant to any contract or other obligation to
which the Vendor is a party or by which the Vendor 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.
(45) "PARTY" means a party to this Agreement and any reference to a Party
includes its successors and permitted assigns; "PARTIES" means every
Party.
(46) "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.
(47) "PERSONAL PROPERTY" means all machinery, equipment (including
computers and telephone communication equipment excluding the
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switch), furniture, and other chattels Related to the Business
(including those owned, leased or licensed by Vendor and in
possession of third parties) including the personal property listed
in Schedules 4.1(5) and 4.1(7).
(48) "PERSONAL PROPERTY LEASES" means all chattel leases, equipment leases,
rental agreements, conditional sales contracts and other similar
agreements Related to the Business.
(49) "PREMISES LEASES" means the lease or subleases relating to the Leased
Premises.
(50) "PREPAID AMOUNTS" means all prepayments, prepaid charges, deposits,
sums and fees made by Vendor or on its behalf Related to the Business
or in respect of the Assets other than those attributable to Contracts
not assumed by Purchaser.
(51) "PURCHASE PRICE" has the meaning given in Section 2.2.
(52) "PURCHASER LICENSED SOFTWARE" means any Software components and code
included in or embedded in any program of the Vendor not Related to
the Business which is derived from the Software initially or is
central to the functionality of the operation of the Software.
(53) "RECEIVABLES" means all accounts receivable, bills receivable, trade
accounts, book debts and insurance claims Related to the Business
together with any unpaid interest accrued on such items and any
security or collateral for such items, including recoverable deposits.
(54) "RELATED TO THE BUSINESS" means used primarily in, arising primarily
from, or relating primarily to, in any manner the Business.
(55) "RIGHTS" has the meaning given in Section 3.6.
(56) "SOFTWARE" means all rights, title and interest in the Business
software programs identified in Schedule 4.1(10), in source and object
code (including manufacturing ready masters) forms and including any
and all existing documentation (regardless of whether such
documentation is provided on a commercial basis) including flow
charts, program descriptions, program listings, layouts, schematics,
engineering and design drawings, technical support documentation,
diagrams and other documentation depicting or specifying the designs
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and components of such software programs, libraries, logs, reports,
drafts, models, prototypes, technical and other data, test and other
data and programs, any and all proceeding versions, works in process,
fixes, enhancements, future releases or other developments by Vendor
which may be combined or embodied in any medium or format whatsoever,
and for all language versions and hardware platforms, software
platforms and operating environments and whether sold separately or
bundled with other applications, consisting of a set of logical
instructions and information which guide the functioning of a
processor, and which shall include all information, electronic form
content, ephemeral aspects, so-called "look & feel", graphic design,
electronic form user methodologies, user interface design, software
tools Related to the Business and owned by the Vendor, know how,
systems, and processes concerning such computer program but excluding
the Licensed Software and the Vendor Licensed Software.
(57) "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 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.
(58) "THIRD PARTY CLAIM" has the meaning given in Section 5.4.
(59) "TRANSFERRED EMPLOYEES" means Employees who have accepted an offer of
employment from the Purchaser as of the Effective Date.
(60) "VENDOR LICENSED SOFTWARE" means any Software components and code
included in or embedded in any program of the Vendor not Related to
the Business which is not derived from the Software initially or is
not central to the functionality of the operation of the Software.
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
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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 the
lawful currency of the United States of America;
(2) any payment contemplated by this Agreement shall be made by cash,
certified cheque, wire transfer 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 Allocation of Purchase Price
B Software License Agreement
SCHEDULES
1.1(5) Assumed Liabilities
1.1(24) Excluded Contracts
1.1(34)(j) Licence of Delrina Name
1.1(40) Licensed Software
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2.3 Payment of Purchase Price
4.1(4) Location of Assets
4.1(5) Personal Property
4.1(6) Premises Lease
4.1(7) Personal Property Leases
4.1(8) Material Contracts
4.1(8)(a) Non-Standard Form Contract
4.1(8)(b) Standard Form Contracts
4.1(10)(a) Software Related to Business
4.1(10)(d) Obligation to Pay Compensation
4.1(11)(a) Intellectual Property
4.1(11)(b) Ownership of Intellectual Property
4.1(11)(c) Intellectual Property Royalty Fees
4.1(11)(f) Person Permitted to use Market and Distribute
Intellectual Property
4.1(12)(a) Transfer of Licenses and Permits
4.1(13) Consents and Approvals
4.1(18) Employees and Employee Contracts
4.1(20) Customers and Suppliers
4.1(24) Financial Statements - Pro Forma Balance Sheet
6.1 Employees to be Offered Employment
ARTICLE 2
PURCHASE OF ASSETS
2.1 AGREEMENT TO PURCHASE AND SELL. Subject to the terms and conditions
of this Agreement:
(1) the Vendor hereby sells and the Purchaser hereby purchases the Assets;
and,
(2) the Purchaser hereby assumes the Assumed Liabilities.
2.2 AMOUNT OF PURCHASE PRICE. The purchase price payable by the Purchaser
to the Vendor for the Assets (the "PURCHASE PRICE") is $100,000,000.00 subject
to adjustments hereinafter provided and shall be allocated as specified in
Exhibit A.
2.3 PAYMENT OF PURCHASE PRICE. The Purchase Price shall be paid and
satisfied, subject to the adjustments hereinafter provided, on a quarterly basis
over four years, commencing September 27, 1996, in the amounts set out under the
"Amount" column on Schedule 2.3 on the dates listed opposite thereto in the
"Date"
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column. The amounts due on December 27, 1996 and March 27, 1997 may be
paid within 10 days after the date set out therefor under the "Date" column.
2.4 ISSUANCE OF PURCHASER'S COMMON SHARES.
(1) The Purchaser may issue its Common Shares to the Vendor for a value
equal to the Current Market Price on any date on which an amount in
respect of the Purchase Price is payable provided:
(a) the total market value of Purchaser's Common Shares held by
Vendor immediately following such issuance shall be less than
$14.0 million, and the Purchaser agrees not to issue any of its
Common Shares to the Vendor if such issuance would cause the
total market value of Purchaser's Common Shares held by Vendor
immediately following such issuance to equal or exceed $14.0
million. Vendor shall advise Purchaser of any acquisition or
disposition of Common Shares by Vendor; and
(b) the issuance of Purchaser's Common Shares to Vendor has been
registered under the United States Securities Act of 1933, as
amended (the "1933 Act") with the United States Securities and
Exchange Commission (the "SEC"), in such a manner that permits
Vendor to resell such shares publicly at any time during the
period of 180 days following the date of issuance of the Common
Shares. If by reason of some act of the Purchaser, Vendor is
restricted from selling the Registered Shares on the Nasdaq Stock
Market, Vendor may during such period of restriction require
Purchaser to redeem such registered shares at the closing price
on the day prior to tender for redemption.
(2) Notwithstanding Section 2.4(1)(b), the Vendor agrees that the
Purchaser may issue unregistered Common Shares to the Vendor in
respect of the amount due on September 27, 1996 provided the Purchaser
compensates the Vendor by way of registered Common Shares or cash to
the extent the Current Market Price of such Common Shares on the date
such Common Shares become registered, which date shall not be later
than December 31, 1996, as contemplated in Section 2.4(1)(b) is less
than the Current Market Price thereof on the date of issuance, such
registration to remain effective for a period of 180 days following
the date of registration in respect of such Common Shares. If these
Common Shares are not registered by December 31, 1996, the Purchaser
shall redeem the unregistered Common Shares
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then held by the Vendor at a price being the higher of the closing
price of the Common Shares on December 31, 1996 and the Current Market
Price on the day of issue of the unregistered Common Stock. Vendor
shall deliver same with duly executed stock power transfers against
payment in cash therefor.
2.5 ADJUSTMENTS TO PURCHASE PRICE. From the Effective Date until the date
that the last payment is due pursuant to Section 2.3 the Purchase Price shall be
adjusted as follows:
(1) decreased by the amount of any deferred revenue Related to the
Business excluding deferred revenues attributable to Material
Contracts not assumed by Purchaser as at the Effective Date;
(2) decreased upon the receipt by the Purchaser of the Audited Revenue
Statement to the extent that the revenues realized from the licensing
of the Software by the Vendor is less than CDN$5 million, an amount
equal to the product of CDN$4.00 for each CDN$1.00 by which revenue is
less than CDN$5 million times the exchange rate, being the noon buying
rate for U.S. dollars of the Royal Bank of Canada on August 31, 1996
(being US$1.00 = $1.3673CDN);
(3) decreased by the amount of accumulated vacation pay credits assumed by
the Purchaser pursuant to Section 6.2(1);
(4) increased by the amount of salary, wages and benefits paid by Vendor
to Transferred Employees attributable to the period following the
Effective Date; and
(5) decreased by the amount of $100,000 on account of the reserve for
inventory returns assumed by the Purchaser as provided in Section 7.8.
2.6 TIMING OF PAYMENT OF ADJUSTMENTS. The adjustments shall be payable to
the Purchaser as follows:
(1) where the adjustments arise pursuant to Section 2.5(1), Section
2.5(3), Section 2.5(4) and Section 2.5(5) above, the adjustments shall
be made to the next amount then due in respect of the Purchase Price
to the Vendor pursuant to Schedule 2.3; and
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(2) where the adjustments arise pursuant to Section 2.5(2) above, the
adjustment amount shall be deducted from the amounts outstanding in
respect of the Purchase Price due to the Vendor, commencing with the
amount due on June 27, 2000 and thereafter amounts due prior to such
date in reverse sequence until the full amount has been deducted.
2.7 MORAL RIGHTS TO SOFTWARE AND INTELLECTUAL PROPERTY. In consideration
of the Purchase Price, Vendor hereby waives any moral rights in and to the
Software and/or the Intellectual Property.
2.8 LICENSES. Vendor, hereby agrees to grant to Purchaser a non-
exclusive, perpetual, worldwide, unlimited, fully paid up license to use, copy,
modify, create derivative works from, create compilations from, display and
perform, with the right to sublicense same, those portions of the Licensed
Software which are components that are shared or common with Vendor's products
other than the Software in accordance with the License Agreement set out in
Exhibit B. Licensed Software not including common components is hereby, subject
to Section 3.6, assigned to Purchaser absolutely. Vendor agrees to license the
Vendor Licensed Software to Purchaser and Purchaser hereby agrees to license
Purchaser Licensed Software to Vendor, all in accordance with the Licence
Agreement set out in Exhibit B.
2.9 SITE LICENSE. Purchaser hereby agrees to grant to Vendor and its
Affiliates a non-exclusive, perpetual, worldwide, fully paid up license to copy
and use the object code of the Software and related documentation for Vendor's
internal purposes in accordance with the end user license therefore, it being
understood and agreed that Vendor will have no right to distribute such Software
to parties that are not employees of Vendor.
2.10 GST ELECTION. The Vendor and the Purchaser shall execute jointly an
election under Section 167 of the EXCISE TAX ACT (Canada) to have the sale of
the Assets take place on a GST-free basis under Part IX of the EXCISE TAX ACT
(Canada) and the Purchaser shall file such election with its GST return for the
reporting period in which the sale of the Assets takes place. Notwithstanding
such election, in the event that it is determined by Revenue Canada that there
is a GST liability of the Purchaser to pay GST on all or part of the Purchased
Assets, such GST, as the case may be, shall, unless already collected from the
Purchaser and remitted by the Vendor, be forthwith paid by the Purchaser to the
Vendor. Should the Vendor be assessed by Revenue Canada for any such GST
liability, the Purchaser shall indemnify and hold harmless the Vendor for all
taxes, interest and penalties which the Vendor may be required to pay to Revenue
Canada.
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2.11 SUBLEASE OF LEASED PREMISES. Vendor will forthwith solicit the
lessor's consent under the Premises Lease to allow Purchaser to sublease the
Leased Premises on the same terms and conditions as Vendor's Premises Lease. To
the extent that lessor's consent to such sublease is delayed or denied, Vendor
will make available the benefits of the Premises Lease to Purchaser pursuant to
the provisions of Section 3.6 hereof.
2.12 DEFAULT INTEREST RATE. Any late payments shall bear interest as and
from the date of default at the prime rate of interest published by Bank of
America N.T. & S.A. for commercial loans plus 500 basis points. No interest
shall be due or payable in respect of payments prior to default.
ARTICLE 3
CONVEYANCE
3.1 INSTRUMENTS OF CONVEYANCE. The execution of this Agreement shall
operate as an effective conveyance, assignment and transfer of the Assets as
contemplated herein effective as of the Effective Date. However, in order to
effectuate more fully and completely the assignment, transfer and conveyance
of the Assets pursuant to the terms and conditions hereof, Vendor shall
contemporaneously with the execution hereof or upon reasonable request after
execution hereof, deliver to Purchaser such bills of sale, assignments and
instruments of conveyance as requested by Purchaser, acting reasonably, to
permit the assignment, transfer and conveyance from Vendor to Purchaser and
the acquisition by Purchaser from Vendor of all right, title and interest in,
to and under the Assets, the whole with effect as of the Effective Time.
3.2 EXECUTION. This Agreement shall be executed at Ottawa at the
Effective Time at the offices of the Purchaser's solicitors, or at such other
time on the Effective Date or such other place as may be agreed orally or in
writing by the Vendor and the Purchaser.
3.3 VENDOR'S DELIVERIES. At the Effective Time or so soon thereafter as
practicable, the Vendor shall deliver or cause to be delivered to the Purchaser
all deeds of conveyance, bills of sale, assurances, transfers, assignments,
consents, and such other agreements, documents and instruments as may be
reasonably required by the Purchaser to complete the transactions provided for
in this Agreement. Vendor undertakes unconditionally to cause its Affiliates to
deliver or perform at the Effective Time any obligations under this Agreement in
respect of the delivery of the Assets as contemplated by this Agreement. Vendor
undertakes to diligently
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pursue the fulfilment of all covenants and deliverables hereunder on or
before October 31, 1996.
3.4 PURCHASER'S DELIVERIES. At the Effective Time, the Purchaser shall
deliver or cause to be delivered to the Vendor 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.
3.5 POSSESSION. On the Effective Date or so soon thereafter as
practicable, the Vendor shall deliver or cause to be delivered to the Purchaser
possession of the Assets.
3.6 NON-TRANSFERABLE AND NON-ASSIGNABLE ASSETS. To the extent that any of
the Assets transferred to the Purchaser hereunder, or any claim, right or
benefit arising under or resulting from such Assets (collectively, the "RIGHTS")
is not capable of being transferred without the approval, consent or waiver of
any third Person, or if the transfer of a Right would constitute a breach of any
obligation under, or a violation of, any Applicable Law unless the approval,
consent or waiver of such third Person is obtained, or if a Contract relates to
both the Business and products not Related to the Business ("Dual Agreements")
then, except as expressly otherwise provided in this Agreement and without
limiting the rights and remedies of the Purchaser contained elsewhere in this
Agreement, this Agreement shall not constitute an agreement to transfer such
Rights unless and until such approval, consent or waiver has been obtained or
the party to such Dual Agreement consents to grant such Rights to the
Purchaser. After the Effective Date and until all such Rights are transferred to
the Purchaser, the Vendor shall:
(a) maintain its existence and hold the Rights in trust for the Purchaser;
(b) comply with the terms and provisions of the Rights as agent for the
Purchaser at the Purchaser's cost and for the Purchaser's benefit;
(c) cooperate with the Purchaser in any reasonable and lawful arrangements
designed to provide the benefits of such Rights to the Purchaser;
(d) enforce, at the request of the Purchaser and at the expense and for
the account of the Purchaser, any rights of the Vendor arising from
such Rights against any third Person, including the right to elect to
terminate any such rights in accordance with the terms of such rights
upon the written direction of the Purchaser; and
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(e) provide a licence of occupation for the Leased Premises.
In order that the full value of the Rights may be realized for the benefit of
the Purchaser, the Vendor shall, at the request and expense and under the
direction of the Purchaser, in the name of the Vendor or otherwise as the
Purchaser may specify, take all such action and do or cause to be done all such
things as are reasonable and necessary or proper in order that the obligations
of the Vendor under such Rights may be performed in such manner that the value
of such Rights is preserved and enures to the benefit of the Purchaser, and that
any moneys due and payable and to become due and payable to the Purchaser in and
under the Rights are received by the Purchaser. The Vendor shall promptly pay
to the Purchaser all moneys collected by or paid to the Vendor in respect of
every such Right. The Purchaser shall indemnify and hold the Vendor harmless
from and against any payment, claim or Liability under or in respect of such
Rights arising because of any action of the Vendor taken pursuant to this
Section excluding any costs of transfer which shall be the obligation of the
Vendor.
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 POWER. The Vendor 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. The Vendor
has the corporate power and authority and is qualified to own and dispose of its
properties and assets and to carry on the Business as presently carried on by
it.
(2) DUE AUTHORIZATION. The Vendor 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
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authorized by all necessary corporate action on the part of the Vendor and its
shareholders.
(3) ENFORCEABILITY OF 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 or 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) TITLE TO ASSETS. The Vendor has good and marketable title to all the
Assets, free and clear of any and all Liens other than Excluded Liens. The
Assets are sufficient when combined with the operations of the Purchaser to
permit the continued operation of the Business as a division of the Purchaser in
substantially the same manner as conducted in the year ended on the date of this
Agreement. Schedule 4.1(4) sets out all locations where the Assets are situate.
Other than this Agreement, there is no agreement, option or other right or
privilege outstanding in favour of any Person for the purchase from the Vendor
of the Business or of any of the Assets except the sale of inventory in the
ordinary course of business.
(5) PERSONAL PROPERTY. Schedule 4.1(5) lists each item of Personal
Property which had a book value in the accounting records of the Vendor,
determined in accordance with applicable GAAP at the date of the Vendor's most
recently completed financial year, of more than $15,000 or is otherwise material
to the Business. All Personal Property listed on Schedule 4.1(5) is in good
operating condition and repair, ordinary wear and tear excepted. Vendor shall
deliver a reasonably detailed listing of Personal Property within 10 days of the
Effective Date.
(6) LEASED PREMISES. Schedule 4.1(6) lists the Premises Lease including
the term thereof. The Premises Lease is in full force and effect, unamended by
oral or written agreement not reflected on Schedule 4.1(6), and the Vendor is
entitled to the full benefit and advantage of such Premises Lease in accordance
with the terms thereof. The Premises Lease is in good standing and there has
not been any default by Vendor, or to the best of Vendor's knowledge, by any
other party under the Premises Lease nor is there any dispute between the Vendor
and landlord under the Premises Lease. The Vendor has obtained from the
mortgagee of the landlord of the Leased Premises whose mortgage ranks in
priority to the Premises Lease an agreement not to disturb the Vendor's
possession thereof while the Vendor is not in default under the Premises Lease.
The Premises Lease has not been assigned by the Vendor in favour of any Person
and the Vendor does not have authority to
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assign or sublet the Premises Leases to the Purchaser without consent of the
landlord. The current uses of the Leased Premises comply with Applicable
Law. The aggregate obligation of the Vendor in connection with the Premises
Lease does not exceed $241,000 in the 1996 calendar year.
(7) PERSONAL PROPERTY LEASES. Schedule 4.1(7) lists all the Personal
Property Leases including the term thereof and identifies the ones which cannot
be terminated by the Vendor without liability at any time upon less than 30
days' notice or which involve payment by it in the future of more than $10,000.
Each Personal Property Lease is in full force and effect and has not been
amended other than as reflected on Schedule 4.1(7), and the Vendor is entitled
to the full benefit and advantage of each Personal Property Lease in accordance
with its terms. Each Personal Property Lease is in good standing and there has
not been any default by Vendor, or to the best of Vendor's knowledge, by any
other party under any Personal Property Lease nor any dispute between the Vendor
and any other party under any Personal Property Lease. None of the Personal
Property Leases has been assigned by the Vendor in favour of any Person and the
Vendor has full right, title and authority to assign the Personal Property
Leases to the Purchaser. The aggregate obligation of the Vendor in connection
with the Personal Property Leases does not exceed $100,000 per annum in any year
during the term thereof.
(8) MATERIAL CONTRACTS. Schedule 4.1(8) lists all the Material Contracts
including the term thereof. The Vendor has not received notice of any default,
and the Vendor is not in default, under any Material Contract which default
would have a material adverse effect upon the Condition of the Business and, to
Vendor's knowledge, there has not occurred any event which, with a lapse of time
or giving of notice, or both, would constitute such a default. Each Material
Contract is in good standing and in full force and effect, unamended by written
or oral agreement not reflected in Schedule 4.1(8), and the Vendor is entitled
to the full benefit and advantage of each Material Contract in accordance with
the terms of each Material Contract. There has not been, to Vendor's knowledge,
any default by Vendor, or to Vendor's knowledge, by the other party, under any
Material Contract nor any dispute between the Vendor and any party under any
Material Contract. There are no obligations under any Material Contract for the
delivery by the Vendor of any software or services other than the Software or
services of the Vendor currently supplied or owned by the Vendor and transferred
to the Purchaser hereunder. None of the Material Contracts has been assigned by
the Vendor in favour of any Person and, other than as set forth on Schedule
4.1(8), the Vendor has full right, title and authority to assign the Material
Contracts to the Purchaser. All Material Contracts for the sale of goods and
services shall, except as provided in Schedule 4.1(8)(a), be in the form of the
standard form contracts annexed hereto as Schedule 4.1(8)(b).
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(9) INVENTORIES. The finished good portion of Inventories consist of
items of a quality and quantity useable and saleable in the ordinary course of
business. All items included in the Inventories are owned by the Vendor. No
items included in the Inventories are held by the Vendor on consignment from
others or have been pledged as collateral. The book value of Inventories is not
less than $110,000.00.
(10) SOFTWARE.
(a) Schedule 4.1(10)(a) contains a complete and accurate description
of all Software which is Related to the Business.
(b) A consolidated copy of the current version of the source code
shall be provided to Purchaser within 10 days of the Effective
Date on media free of defects in workmanship and materials.
(c) The Software is owned by the Vendor free and clear of all Liens;
(d) Except as listed on Schedule 4.1(10)(d), the Vendor is not
obligated to pay any compensation for any Person in respect of
the use of the Software.
(e) Upon execution of this Agreement, the Purchaser may use, modify
and/or distribute the Software without restriction and, except as
listed on Schedule 4.1(10)(d), there are no fees, charges,
licenses or other costs payable by the Purchaser to any Person
(except as payable to the Vendor herein) in respect of the
Software or use or distribution of the Software.
(f) Vendor shall provide all fault logs and other records relating to
the Software and any defects of deficiencies in the possession of
the Vendor.
(g) The currently shipping versions of the Software have undergone
and passed Symantec's standard checking procedures for known
software viruses and to the Best of the Vendor's Knowledge the
currently shipping versions of the Software does not contain
viruses which would disrupt, damage, or interfere with use of the
Software.
(h) Vendor has not disclosed the source code for any of the Software
or other confidential or proprietary information constituting,
embodied in or pertaining to the Software to any Person and has
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used diligent efforts to prevent such disclosure, other than
disclosure of such source code to employees or independent
contractors of Vendor, or third parties solely for evaluation
purposes, in each case pursuant to valid and binding non-
disclosure agreements with such Persons which are in full force
and effect.
(i) Except as disclosed in Schedule 4.1(11)(b), the use of the
Software and the grant provided herein does not, to the Best of
the Vendor's Knowledge, infringe the intellectual property rights
of any Person.
(11) INTELLECTUAL PROPERTY.
(a) Schedule 4.1(11)(a) lists the Intellectual Property that is
represented by registered trademarks or copyrights and pending
applications for same. Except as set forth on Schedule
4.1(11)(a), all of the registrations and applications for
registration of the Intellectual Property are in good standing
and are recorded in the name of the Vendor. To the Best of
Vendor's Knowledge, no application for registration of any of the
Intellectual Property has been rejected.
(b) Except as disclosed in Schedule 4.1(11)(b), the Vendor has the
exclusive ownership of the Intellectual Property and the right to
assign the Intellectual Property to the Purchaser.
(c) The Vendor is the owner of the Intellectual Property and is
entitled to the exclusive and uninterrupted use of the
Intellectual Property without payment of any royalty or other
fees, except as disclosed in Schedule 4.1(11)(c). No
shareholder, officer, director or employee of the Vendor or any
third party has any right, title or interest in any of the
Intellectual Property and generally all such persons have waived
their moral rights in any copyright works within the Intellectual
Property. The Vendor has diligently protected its legal rights
to the exclusive use of the Intellectual Property.
(d) There is no current or, to the Best of Vendor's Knowledge,
threatened litigation relating to the Intellectual Property.
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(e) All employees of the Vendor have agreed to maintain the
confidentiality of confidential Intellectual Property.
(f) The Vendor has not permitted or licensed any Person to use,
market or distribute any of the Intellectual Property except as
disclosed in Schedule 4.1(11)(f). All licences to market and
distribute the Software are in full force and effect and neither
the Vendor nor to the Best of Vendor's Knowledge the other party
is in default of its obligations.
(g) To the Best of the Vendor's Knowledge, no person has challenged
the validity of the Vendor's rights to any of the Intellectual
Property.
(h) To the Best of the Vendor's Knowledge, neither the use of the
Intellectual Property nor the conduct of the Business currently
infringes upon the intellectual property rights of any other
Person. Except as disclosed in the Schedules to this Agreement,
neither the use of the Intellectual Property nor the conduct of
the Business requires the payment of any royalty to any other
Person.
(i) To the Best of the Vendor's Knowledge, other than general
software piracy experienced in the industry, no Person has
infringed the Vendor's rights to the Intellectual Property.
(j) There is no governmental prohibition or restriction on the
license, sale or use of the Intellectual Property under
Applicable Law other than statutory export controls.
(12) LICENCES AND PERMITS. The Vendor holds, free and clear of any and all
Liens, all Licences and Permits. All Licences and Permits are freely
transferable and are described in Schedule 4.1(12). Such rights are in full
force and effect and the Vendor is not in violation of any term or provision or
requirement of any such Licences and Permits, and to the Best of the Vendor's
Knowledge, 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 Licences and Permits.
(13) CONSENTS AND APPROVALS. Except as disclosed in Schedule 4.1(13) to
this Agreement, no Consents and Approvals of any Person are required in
connection with the execution and delivery of this Agreement and the completion
of
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the transactions contemplated by this Agreement or to permit the Purchaser to
carry on the Business after the Effective Date as the Business is currently
carried on by the Vendor.
(14) NOTICES. No Notices are required to be delivered to any Person to
permit the Purchaser to carry on the Business after the Effective Date as the
Business is currently carried on by the Vendor.
(15) ABSENCE OF CONFLICTING AGREEMENTS AND INFRINGEMENT. The execution,
delivery and performance of this Agreement by the Vendor and the completion
(with any required Consents and Approvals and Notices) of the transactions
contemplated by this Agreement do not and will not result in or constitute any
of the following:
(a) a default, breach or violation or an event that, with notice or
lapse of time or both, would be a default, breach or violation of
any of the terms, conditions or provisions of the articles or
by-laws of the Vendor or of any Contract or, to the Best of
Vendor's Knowledge, Licences and Permits;
(b) an event which, pursuant to the terms of any Material Contract
causes any right or interest of the Vendor to come to an end or
be affected in any way that is adverse 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 other than Excluded Liens
on any Asset;
(d) the violation of any Applicable Law applicable to or affecting
the Vendor which is Related to the Business; or
(e) to the Best of the Vendor's Knowledge, the infringement of any of
the intellectual property rights of any Person.
(16) LITIGATION. There are no outstanding orders, judgements, injunctions,
awards or decrees of any court, governmental or regulatory body or tribunal
against or effecting the Business. To the Best of the Vendor's Knowledge, there
is no action, suit, proceeding, claim, application, complaint or investigation
in any court or before any arbitrator or before or by any regulatory body or
governmental or non-governmental body pending or, to the Best of the Vendor's
Knowledge, threatened by or against the Vendor Related to the Business or the
transactions contemplated by this Agreement; and, to the Best of the Vendor's
Knowledge, there is no factual
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or legal basis which could give rise to any such action, suit, proceeding,
claim, application, complaint or investigation under the Applicable Law.
(17) ENVIRONMENTAL MATTERS. The Business and the Assets as carried on or
used by the Vendor and its predecessors have been and are currently carried on
in strict compliance with all Environmental Laws except for such non-compliance
as would not be material to the Business.
(18) EMPLOYEES AND EMPLOYMENT CONTRACTS. Schedule 4.1(18) lists all the
Employees as of the date of this Agreement and the age, position, status (full-
time, part-time, leave, etc.), length of service, contractual severance
obligations, salary and benefits (including any bonus, deferred compensation,
profit sharing, pension, arrangements) of each of them, respectively.
(19) COLLECTIVE AGREEMENTS.
(a) the Vendor is not a party to any collective bargaining agreement,
contract or legally binding commitment to any trade union or
employee organization or group in respect of or affecting
Employees;
(b) the Vendor is not currently engaged in any labour negotiation;
(c) the Vendor is not a party to any application, complaint or other
proceeding under any statute;
(d) the Business is not engaged in any unfair labour practice and the
Vendor is not aware of any pending or threatened complaint
regarding any alleged unfair labour practices;
(e) there is no strike, labour dispute, work slow down or stoppage
pending or threatened against the Business;
(f) there is no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement which is pending or
threatened against the Business;
(g) the Business has not at any time experienced any material work
stoppage;
(h) the Vendor is not the subject of any union organization effort.
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(20) CUSTOMERS AND SUPPLIERS. Vendor will deliver Schedule 4.1(20) by
September 13, 1996 listing the 25 largest customers and the five largest
suppliers of the Business for the last fiscal year and for the interim period
ending immediately before the date of this Agreement. The Vendor is not 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 Vendor or to modify or
change in any material manner any existing arrangement with the Vendor Related
to the Business for the purchase or supply of any products or services.
(21) RESIDENCE OF VENDOR. The Vendor is not a non-resident of Canada
within the meaning of section 116 of the INCOME TAX ACT (Canada).
(22) DEDUCTIONS AT SOURCE. The Vendor has fulfilled all requirements under
the INCOME TAX ACT (Canada) and the Regulations thereto, the Canada Pension
Plan, the UNEMPLOYMENT INSURANCE ACT (Canada) and any applicable provincial
legislation, for withholding of amounts from Employees and has remitted all
amounts withheld to the appropriate authorities within the prescribed times.
(23) GST. The Assets constitute all or substantially all of the property
used in a "commercial activity" for the purposes of Part IX of the EXCISE TAX
ACT (Canada) that forms all or part of a business carried on by the Vendor and
the Vendor is a "registrant" under Part IX of the EXCISE TAX ACT (Canada). The
Vendor's GST registration number is R 101331999.
(24) FINANCIAL STATEMENTS. The Vendor has furnished the Purchaser with the
proforma balance sheet of the Business as of September 9, 1996 (the "BALANCE
SHEET") a true and complete copy of which is annexed as Schedule 4.1(24). The
Assets have a value which is not less than the value shown in the Balance Sheet,
and the Liabilities do not exceed the value shown in the Balance Sheet. Vendor
shall cause its attorney at cost of Purchaser to apply to the SEC for a
determination that the Assets acquired do not constitute a "business" for the
purposes of Rule 3.05 of Article 11 of Regulation S-X promulgated by the SEC.
In the event that the SEC does not confirm the requested determination, Vendor
shall provide the financial information in the form necessary to effect
compliance with the Form 8-K requirements under the 1934 Act the cost of which
shall be borne equally by the Parties.
(25) SOFTWARE REVENUE. During the combined fiscal period of June, July and
August, 1996 revenues realized from the licensing of Software by the Vendor, net
of all returns in excess of reserves and other set offs for such period, were
not less than CDN$5,000,000.
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(26) BROKERAGE FEES. The Vendor has not 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 Assets or any other matters contemplated by this Agreement.
(27) BULK SALES. The Vendor will either comply with the BULK SALES ACT
(Ontario) or indemnify the Purchaser in respect of any liability thereof to the
satisfaction of the Purchaser.
4.2 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The Purchaser
represents and warrants to the Vendor as follows:
(1) INCORPORATION AND POWER. The Purchaser 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 and has the
corporate power and authority to own, operate and lease its properties and to
carry on its business as now conducted and as proposed to be conducted.
(2) 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.
(3) FILINGS. No filing, authorization or approval, governmental or
otherwise, is necessary to enable Purchaser to enter into, and to perform its
obligations under, this Agreement.
(4) 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 the
enforcement of the rights of creditors or 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.
(5) LITIGATION. To the Best of the Purchaser's Knowledge there is no
action, proceeding, claim or investigation pending against Purchaser before any
court or administrative agency that if determined adversely to Purchaser may
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reasonably be expected to have a material adverse effect on the present or
future operations or financial condition of Purchaser, and, to the Best of
Purchaser's Knowledge, no such action, proceeding, claim or investigation has
been threatened.
(6) NO VIOLATION OF EXISTING AGREEMENTS. Neither the execution nor
delivery of this Agreement, nor the consummation of the transactions
contemplated hereby, will conflict with, or (with or without notice or lapse of
time, or both) result in a termination, breach, impairment or violation of (a)
any provision of the articles of incorporation or bylaws of Purchaser as
currently in effect, (b) in any material respect, any material instrument or
contract to which Purchaser is a party, respectively, or by which Purchaser or
its assets is bound or which Purchaser will become a party to or be bound by
prior to the Effective Time or (c) any Applicable Law applicable to and that
would have a material adverse effect on Purchaser or its assets or properties.
(7) DISCLOSURE. All registration statements, reports, proxy statements
and other materials (collectively "SEC REPORTS") filed by Purchaser with the SEC
since January 1, 1994 were filed within the applicable required time periods (or
any extensions related thereto), complied in all material respects with the
applicable requirements of the Securities Act of 1933 and the Securities
Exchange Act of 1934 (the "1934 Act") and the applicable rules and regulations
of the SEC promulgated thereunder, and at the time filed did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances in which they were made, not misleading. Purchaser has
furnished Vendor with complete and accurate copies of its annual report on Form
10-K for its fiscal year ended April 30, 1996 and all other reports or documents
required to be filed by Purchaser pursuant to Section 13(a) or 15(d) of the 1934
Act since the filing of the most recent report on Form 10-K. Since the date of
the Form 10-K, Purchaser has made all filings with the SEC which it is required
to make and has not received any request from the SEC to file any amendment or
supplement to any of the reports described in the preceding sentence. To the
knowledge of the Purchaser, neither it, nor any of its officers, directors or
principal stockholders have been or currently are the subject of any
investigation or proceeding by any state or federal securities agency or any
self-regulatory authority, have been made subject to any stop order or similar
restriction in the offer or sale of securities, been enjoined from any
activities relating to the offer or sale of securities, or had entered against
it or him a judgment involving fraud or misrepresentation with respect to any
transaction involving a security. Purchaser has made available to Vendor all
Forms 10-K, 10-Q and 8-K and Proxy Statements filed by Purchaser with the SEC
since April 30, 1995 (the "PURCHASER DISCLOSURE PACKAGE"). The Purchaser
Disclosure Package, this Agreement, the exhibits and schedules hereto, and any
certificates or documents to
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be delivered to Vendor pursuant to this Agreement, when taken together, do
not contain any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements contained herein and
therein, in light of the circumstances under which such statements were made,
not misleading.
(8) COMPLIANCE WITH LAWS. To the Best of the Purchaser's Knowledge,
Purchaser has complied, in all material respects, with all Applicable Laws
applicable to Purchaser or to its assets, properties and business (the violation
of which would have a material adverse effect upon Purchaser). Purchaser has
received all material permits and approvals from, and has made all material
filings with, third parties, including government agencies and authorities, that
are necessary in connection with its present business except where a failure
would have no material adverse effect on the business or financial statements of
Purchaser.
(9) BROKERAGE FEES. The Purchaser has not entered into any agreement
which would entitle any Person to any valid claim against the Vendor for a
broker's commission, finder's fee or any like payment in respect of the purchase
and sale of the Assets or any other matters contemplated by this Agreement.
(10) The Purchaser is a registrant under Part IX of the EXCISE TAX ACT
(Canada). The Purchaser's G.S.T. number is R102478385.
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 Effective Date for a period of two years
from the Effective Date, and notwithstanding the Effective Date 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 of the Vendor, the due
authorization of this Agreement by the Vendor or the enforceability of the
Vendor's obligations under this Agreement, or to the title of any Person to any
property (whether real or personal, tangible or intangible).
(2) The representations and warranties of the Purchaser contained in
Section 4.2 or any other agreement, certificate or instrument delivered pursuant
to
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this Agreement shall survive the Effective Date for a period of two years
from the Effective Date, and notwithstanding the Effective Date, 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 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 incorporation of the Purchaser, 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, representatives and the
Purchaser's Affiliates and their respective directors, officers and employees
harmless in respect of any claim, demand, action, cause of action, damage, loss,
cost, Liability or expense (hereinafter referred to as "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 in 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, representatives and the
Vendor's Affiliates and their respective directors, officers and employees
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:
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(1) any incorrectness in or breach of any representation or warranty of
the Purchaser contained in this Agreement or in 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 Purchaser under this Agreement or under any other
agreement, certificate or instrument executed and delivered pursuant
to this Agreement.
5.3 LIMITATIONS. No Party shall have any Liability for indemnification
pursuant to Sections 5.1 or 5.2 unless and until the accumulated aggregate
amount of Claims of the Indemnified Party exceeds $500,000, following which all
further Claims of the Indemnified Party shall be recoverable as provided in this
Agreement up to the maximum amount due to Vendor hereunder net of any recoveries
under insurance policies, indemnities or other similar recoveries. The
limitation herein does not apply to adjustments under Sections 2.5, 7.6 and 7.8.
5.4 NOTICE OF CLAIM. If an Indemnified Party becomes aware of a Claim in
respect of which indemnification is provided for pursuant to either of
Section 5.1 or 5.2, 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 that the information is available):
(a) the factual basis for the Claim; and
(b) the amount of the Claim, if known, the basis thereof and
documentation supporting same.
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.
5.5 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
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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
binding arbitration in such manner as the parties may agree or shall be
determined by a court of competent jurisdiction.
5.6 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 and, in
such event, the Indemnifying Party shall reimburse the Indemnified Party for all
of the Indemnified Party's out-of-pocket expenses as a result of such
participation or assumption. If the Indemnifying Party elects to assume such
control, 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. If the Indemnifying
Party, having elected to assume such control, thereafter fails to defend the
Third Party Claim within a reasonable time, 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 either Party makes a payment, resulting in settlement of the Third
Party Claim, which 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.
5.7 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, neither Party shall settle any
Third Party Claim without the written consent of the other Party, which consent
shall not be unreasonably withheld or delayed; provided, however, that the
liability of such 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.
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5.8 GST GROSS-UP. The amount of any Claim submitted under Section 5.1 or
5.2 as damages or by way of indemnification as determined without regard to this
Section 5.9 shall be increased by an amount equal to the rate of Goods and
Services Tax applicable to such amount.
5.9 SET-OFF. The Purchaser shall be entitled to set-off the amount of any
Claim submitted under Section 5.1 as damages or by way of indemnification
against any other amounts payable by the Purchaser to the Vendor whether under
this Agreement or otherwise as the Purchaser's sole monetary remedy. Where the
Claim by the Purchaser relates to amounts paid or payable currently by the
Purchaser, the Purchaser may set off such amounts against the amounts next due
and payable in respect of the Purchase Price. All other Claims by the Purchaser
shall be pro-rated over the outstanding amounts in respect of the Purchase
Price. The Vendor's right of Claim shall be limited to the then outstanding
portion of the Purchase Price and collection shall be similarly limited and
allocated to outstanding payment dates on a pro rata basis.
ARTICLE 6
EMPLOYEES
6.1 OFFER OF EMPLOYMENT. The Purchaser shall offer employment, as of the
Effective Time, to each of the Employees listed in Schedule 6.1 attached hereto,
at not less than their current salary and bonus opportunities and on such other
terms and conditions (including stock options) as are generally offered to new
employees of the Purchaser. The Purchaser shall not be obligated to any
Employee who refuses the Purchaser's offer of employment. The Vendor shall
render all reasonable assistance to encourage each Employee to accept the
Purchaser's offer of employment.
6.2 SETTLEMENT BY VENDOR. On or before the first payment date of any part
of the Purchase Price, the Vendor shall settle and pay:
(1) with each of the Transferred Employees who accepts an offer of
employment from the Purchaser pursuant to Section 6.1 all salaries,
commissions, bonuses, and other amounts that may become payable to or
receivable by such accepting Employees for all periods before the
Effective Time ending on the normal payment date immediately preceding
the Effective Time. Accumulated vacation with pay credits in respect
of their employment with the Business or any predecessor of the
Business shall be transferred to Purchaser as an adjustment to the
Purchase Price. Purchaser shall be responsible for providing for
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equivalent vacation credits or payment thereof to the Transferred
Employees; and
(2) with all other Employees, all amounts that may become payable to or in
respect of or receivable by such employees before the Effective Time,
including termination allowances and accumulated vacation with pay
credits.
6.3 NOTICE OF CHANGE OF EMPLOYMENT. The Purchaser may give such notice to
the Employees concerning the change of their employer with respect to the
Business as the Purchaser, in light of Applicable Law, considers reasonable.
ARTICLE 7
POST-EFFECTIVE DATE MATTERS
7.1 EXCLUDED ASSETS. The Vendor shall at its own expense remove all
tangible Excluded Assets, if any, from the premises of the Business within 30
days following the Effective Date.
7.2 CO-OPERATION IN FILING OF RETURNS. The Purchaser agrees to provide to
the Vendor all reasonable co-operation following the Effective Date in
connection with the filing of income tax returns of the Vendor in respect of
which the Books and Records delivered to the Purchaser pursuant to this
Agreement are relevant and shall provide Vendor with reasonable access to such
Books and Records.
7.3 NON-MERGER. Each party hereby agrees that all provisions of this
Agreement, other than the representations and warranties contained in Article 4,
and the indemnities in Sections 5.1 and 5.2 hereof (which shall be subject to
the special arrangements provided in such Articles or Sections), shall survive
the execution, delivery and performance of this Agreement, the Effective Date
and the execution, delivery and performance of any and all documents delivered
in connection with this Agreement.
7.4 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.
7.5 ASSISTANCE. From the Effective Date until September 27, 1996, the
Vendor agrees to provide assistance to the Purchaser reasonably necessary in
order
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to allow the Purchaser to complete the transition of the Business and the
Assets and for such purpose, verifying the information disclosed by the Vendor
in this Agreement, including the Schedules thereto. Any such investigation or
inspections shall not affect or mitigate the representations and warranties of
the Vendor under this Agreement which shall continue in full force and effect as
provided under this Agreement.
7.6 TRANSITION ARRANGEMENTS. It is acknowledged by the Vendor and the
Purchaser that from the Effective Date certain services will be required of the
Vendor to support the transition of the Assets to the Purchaser with limited
disruption and the Parties agree to make diligent efforts to make the transition
appear seamless to the customers of the Business, and the Vendor agrees:
(a) at the Vendor's cost during the period ending no more than 60 days
from the Effective Date to provide all product fulfilment services and
support Related to the Business to such customers. Purchaser will
reimburse Vendor for out of pocket (third party) costs incurred in
providing such service;
(b) at the Purchaser's cost, based on the respective personnel's salary,
benefits, travel and living expenses, for the period up to six months
from the Effective Date, Vendor will make available on a full time
basis if and when required, up to seven qualified technical and
maintenance personnel who immediately prior to the Effective Date were
utilized in support Related to the Business to the customers of the
Business out of its Eugene, Oregon facilities;
(c) at no cost to the Purchaser to provide reasonable access to the
Vendor's marketing personnel for a period not to exceed two months
from the Effective Date in a manner not to interfere with the Vendor's
business, so as to permit the Purchaser to gather information and data
Related to the Business which will assist the Purchaser in its
marketing activities with respect to the Business; and
(d) use its best efforts to assist the Purchaser to the extent possible in
securing the transfer of any telephone number Related to the Business.
7.7 FULFILMENT OF CONTRACTS. Vendor and Purchaser agree that any
Contracts which provide for the sale or distribution of Software and software of
Vendor not Related to the Business after the Effective Date shall be allocated
between Vendor and Purchaser on the balance of convenience based on the volume
of product to be supplied. The party to whom such contract was not assigned
agrees
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to fulfil the obligations under such contracts in respect of the products
owned by it. The proceeds arising from such contracts shall be allocated pro
rata between the parties based on the volume supplied under the contract and
the relative retail price thereof.
7.8 RETURNED SOFTWARE. Vendor and Purchaser acknowledge that the channel
inventory is subject to certain contractual return rights by distributions in
the ordinary course. All current inventory held by or for the benefit of Vendor
immediately prior to the Effective Date shall following the Effective Date be
marked at JetForm's cost with a sticker designating ownership by Purchaser. The
Vendor warrants that inventory of currently shipping product ("Return
Merchandise") in the channel subject to current return rights does not exceed
$400,000 and that Vendor has reserved $100,000 for returns in respect thereof
which reserve shall be credited to the Purchaser, as provided in Section 2.5(5).
Based upon and relying upon such warranty, the Purchaser agrees to:
(a) issue credit authorizations to distributors and direct resellers for
return merchandise authorized after the Effective Date;
(b) pay Vendor on a $1.00 for $1.00 basis for credits issued or payments
or refunds made by Vendor for return merchandise authorized after the
Effective Date; or
(c) pay or refund to distributors the amount of return merchandise
authorizations made after the Effective Date; provided the Purchaser's
obligation hereunder shall be limited to $400,000 and shall not extend
to obsolete inventory or any inventory returned pursuant to a return
merchandise authorization issued prior to the Effective Date. Vendor
shall be responsible, save harmless and indemnify Purchaser in respect
of any returns in excess of the $400,000 permitted in this section.
The provisions of this paragraph apply only in respect of non-
stickered product.
7.9 NET REVENUE VERIFICATION. The Parties agree to work with Ernst &
Young, Canada to develop an audit framework consistent with the Section 5800 of
the CICA Handbook to create an audit opinion on financial information with
respect to whether Vendor's representation in Section 4.1(25) as to the amount
of recognizable revenue for the combined fiscal months of June, July and August,
1996 is consistent with US GAAP and Symantec's normal accounting practices.
This commitment is premised on the assumption that such an audit opinion can be
made available by Ernst & Young under applicable accounting standards and if
such an
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audit opinion cannot be provided under such standards, the parties agree to
work to develop a substitute method for reaching this determination. The
parties agree that in creating this framework, any increases in product
return rates caused by Purchaser or the announcement of this transaction will
not be taken into consideration as to whether the reserves for returns taken
for such period were adequate. The Purchaser will pay for the costs of
preparing such audit opinion to the extent it exceeds $15,000.
ARTICLE 8
GENERAL
8.1 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 Assets pursuant to this Agreement.
8.2 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.
8.3 ANNOUNCEMENTS. Except as required by law including applicable
regulatory and stock exchange requirements, all public announcements concerning
the transactions provided for in this Agreement or contemplated by this
Agreement shall be jointly approved as to form, substance and timing by the
parties to this Agreement after consultation.
8.4 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 and receipt thereof is confirmed, in each case to the applicable address
set out below:
(i) if to the Vendor, to:
Delrina Corporation
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895 Don Mills Road
500 - 2 Park Centre
Toronto, Ontario
M3C 1W3
Attention: General Manager
Facsimile: (416) 441-0333
with a copy to
10201 Torre Avenue
Cuppertino, California
U.S.A. 94306
Attention: General Counsel
Facsimile: (408) 252-5101
(ii) if to the Purchaser, to:
JetForm Corporation
560 Rochester Street
Ottawa, Ontario
K1S 5K2
Attention: Chief Executive Officer
Telephone (613) 751-4826
Facsimile (613) 594-3420
with a copy to:
Blake, Cassels & Graydon
World Exchange Plaza
45 O'Connor Street
Suite 2000
Ottawa, Ontario
K1P 1A4
Attention: Deborah L. Weinstein
-40-
Facsimile (613) 788-2247
or to such other address as a party may have furnished to the other parties by
written notice given in accordance with this Section 8.4.
(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.
(3) Any Party may from time to time change its address under this
Section 8.4 by notice to the other Party given in the manner provided by this
Section.
8.5 TIME OF ESSENCE. Time shall be of the essence of this Agreement in
all respects.
8.6 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.
8.7 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
-41-
subsequent default, breach or non-observance (whether of the same or any other
nature).
8.8 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.
8.9 ARBITRATION. The parties agree that they shall use best reasonable
efforts to settle amicably disagreements arising from or in connection with this
Agreement. To this effect, following notice of any party to the others of a
disagreement (which shall include any failure to agree upon a matter to be
agreed upon) the parties hereto shall consult and negotiate with one another in
good faith an understanding to reach a just and equitable solution. If those
attempts fail after a period of ten (10) Business Days from the time the parties
have been notified of the disagreement, then every such disagreement shall be
referred to arbitration in the English language in Toronto, Ontario pursuant to
the ARBITRATION ACT, 1991 (ONTARIO), as may be amended, and in accordance with
the following:
(i) any party may by written notice to the other party request that
the disagreement be referred to arbitration with the reference
being to a single arbitrator who is mutually agreed to by the
parties, provided that, if the parties are unable to agree on an
arbitrator within twenty (20) days of receipt of the written
notice, the arbitration shall be to three arbitrators, one of
whom shall be appointed by the Purchaser and one of whom shall
be appointed by the Vendor and each party shall provide notice
to the other party of the arbitrator so appointed within thirty
(30) days of the written notice requesting arbitration and the
third arbitrator shall be appointed by the arbitrators appointed
by the Purchaser and the Vendor and such third arbitrator shall
be the chairperson provided further that if either party fails
to give notice of the appointment of an arbitrator as herein
provided the reference shall be to an arbitrator appointed in
accordance with this clause and such arbitrator shall be
considered to have been mutually agreed to by the parties;
(ii) where reference is to three arbitrators, decisions may be made
by the majority of the arbitrators provided that matters
susceptible to reduction to a number, such a dollar amount,
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shall be decided by closed ballot by averaging the two nearest
numerical decisions of the three arbitrators;
(iii) the arbitrator(s) may proceed to an award notwithstanding
the failure of one party to participate in the arbitration
proceedings;
(iv) the prevailing party shall be entitled to an award of reasonable
legal fees incurred in connection with the arbitration in such
amount as determined by the arbitrator(s); and
(v) the award of the arbitrator(s) shall be the sole and exclusive
remedy of the parties and shall be enforceable in a court of
competent jurisdiction.
Notwithstanding the foregoing, the parties shall be entitled to seek
injunctive relief or other equitable remedies from any court of competent
jurisdiction. Except where clearly prevented by the issue in dispute, the
Parties agree to continue performing their respective obligations under
this Agreement and the other related agreements entered into in connection
with this Agreement while the dispute is being resolved unless and until
such obligations are terminated or expire in accordance with the provisions
hereof.
8.10 LANGUAGE. The Parties have required that this Agreement and all
deeds, documents and notices relating to this Agreement be drawn up in the
English language. Les parties aux presentes ont exige que le present contrat et
tous autres contrats, documents ou avis afferents aux presentes soient rediges
en langue anglaise.
8.11 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 and shall be treated, in all respects, as an Ontario
contract.
8.12 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.
THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
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8.13 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 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 party an original of the signed
copy of this Agreement which was so faxed.
IN WITNESS WHEREOF the parties have executed this Agreement.
DELRINA CORPORATION
Per:
-------------------------------------------
JETFORM CORPORATION
Per:
-------------------------------------------
EXHIBITS
A Allocation of Purchase Price
B Software License Agreement
EXHIBIT A
ALLOCATION OF PURCHASE PRICE
The Purchase Price shall be allocated among the Assets in such manner as
the parties and their auditors shall agree acting reasonably failing which each
party may allocate the Purchase Price in such manner as is consistent with the
GAAP of such party.
-1-
EXHIBIT B
SOFTWARE LICENSE AGREEMENT
THIS AGREEMENT is made effective September 10, 1996 between JETFORM
CORPORATION, a Canadian corporation ("Purchaser") and DELRINA CORPORATION
("Vendor").
WHEREAS the parties hereto have entered into an asset purchase agreement of
today's date (the "Asset Purchase Agreement") providing for, among other things,
the transfer of the Software (as defined therein) to Purchaser;
AND WHEREAS the parties wish to grant the licenses herein in accordance
with and subject to the terms and conditions herein and in the Asset Purchase
Agreement.
NOW THEREFORE for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) Purchaser and Vendor hereby agree
as follows:
1. DEFINITIONS
Unless otherwise defined herein or the context otherwise requires, words
and phrases capitalized herein shall have the meanings ascribed thereto in the
Asset Purchase Agreement.
2. LICENSES
2.1 VENDOR LICENSED SOFTWARE. Subject to the terms herein and in the
Asset Purchase Agreement, Vendor hereby grants to Purchaser and its Affiliates a
non-exclusive, worldwide, perpetual, fully paid up license to use, copy, modify,
create derivative works from, create compilations from, display and perform,
with the right of sublicense of same, the Vendor Licensed Software.
2.2 PURCHASER LICENSED SOFTWARE. Subject to the terms herein and in the
Asset Purchase Agreement, Purchaser hereby grants to Vendor and its Affiliates a
non-exclusive, worldwide, perpetual, license to use, copy, modify, create
derivative works from, create compilations from, display and perform, with the
right of sublicense of same, the Purchaser Licensed Software.
-2-
2.3 LICENSED SOFTWARE. Subject to the terms herein and in the Asset
Purchase Agreement, Vendor hereby grants to Purchaser and its Affiliates a non-
exclusive, worldwide, perpetual, fully paid up license to use, copy, modify,
create derivative works from, create compilations from, display and perform,
with the right of sublicense of same, the Licensed Software set out in Schedule
"A", to the extent permitted by and subject in each case to the terms and
conditions contained in the Contracts respecting same, copies of which have been
delivered to Purchaser.
2.4 SOFTWARE SITE LICENSE. Purchaser hereby grants to Vendor a non-
exclusive, non-transferable, worldwide, fully paid up license to copy and use
the object code version of the Software for internal purposes only in accordance
with the end user license accompanying same, it being understood and agreed that
the Vendor shall have no right to market or distribute such Software (other than
the Licensed Software and the Purchaser Licensed Software in accordance with the
terms and conditions herein) to Persons who are not employees of the Vendor.
3. PRODUCT RESTRICTION
Except as expressly provided herein or in the Asset Purchase Agreement, the
grant of License of the Purchaser Licensed Software to Vendor and/or its
Affiliates shall be royalty free for so long as Vendor and/or its Affiliates
(either, directly or indirectly, alone or in conjunction with any individual,
firm, corporation, syndicate, company or association or other entity, whether as
a principal, agent, shareholder or investor holding more than 19% interest or
having de facto control) do not market Workflow management software that
competes with JetForm's existing software, and the Software acquired as at the
Effective Date. Competition is defined as offering products that have the same
core functionality and which are commonly grouped together in industry reviews.
Symantec's existing products and their derivative works, including its Sales
Force Automation products and its Development Tools, are not considered to be
competing under this section. This provision is not intended to prevent the
Vendor or its Affiliates offering its software in promotional soft bundles under
third party label.
4. ROYALTIES
4.1 ROYALTIES. No royalties are payable in respect of the licenses
granted under Sections 2.1 and 2.4.
4.2 ROYALTIES RESPECTING USE OF PURCHASER LICENSED SOFTWARE. Should
Vendor or its Affiliates breach the product restriction in Section 3 above, then
as and from the initial date of sale, distribution or license of such product or
program, Purchaser shall be entitled to set off a royalty against any unpaid
amount
-3-
in an amount equal to any unpaid amount of the Purchase Price then or
thereafter due for so long as Vendor or its Affiliates shall sell,
distribute, market or license any such product or program. Provided,
however, that no right to set off shall be exercised hereunder until
Purchaser has provided notice to Vendor of its intention in that regard and
Vendor has not within 30 days after receipt of such notice discontinued any
such product or program. The right of set off shall, if exercised, commence
effective the date of delivery of such notice. The Purchaser's right of
recovery hereunder shall be limited to the set off of the amount as provided
herein.
4.3 TAXES. Vendor shall be responsible to pay all use, sales or value
added taxes on any royalties payable hereunder. If Vendor is required to
withhold taxes from the royalties due to Purchaser, Vendor shall deduct such
taxes from the amounts payable hereunder and remit such taxes to the appropriate
authority and provide Purchaser with proof of payment of same.
4.4 CURRENCY. All amounts referenced in this Agreement or the Schedule
hereto with the symbol "$" refer to United States dollars, and all amounts to be
paid under this Agreement will be paid in U.S. dollars.
5. OWNERSHIP
5.1 PURCHASER LICENSED SOFTWARE AND MODIFICATIONS AND SOFTWARE. At all
times, Purchaser shall retain all right, title and interest, including all
Intellectual Property, in the Purchaser Licensed Software and all modifications
to Licensed Software (unless otherwise provided in such license), the Purchaser
Licensed Software developed by or for Purchaser or its Affiliates or
modifications developed by Vendor and/or its Affiliates to the Purchaser
Licensed Software for non royalty free applications as provided in Article 3.
Vendor shall own all right, title and interest in the modifications to the
Purchaser Licensed Software developed by or for Vendor or its Affiliates other
than modifications developed by Vendor or its Affiliates for non royalty free
applications as provided above (the "Vendor Modifications").
5.2 VENDOR LICENSED SOFTWARE AND MODIFICATIONS. At all times, Vendor
shall retain all right, title and interest, including all Intellectual Property,
in the Vendor Licensed Software and all modifications to the Vendor Licensed
Software developed by or for Vendor or its Affiliates. Purchaser shall own all
right, title and interest in the modifications to the Vendor Licensed Software
developed by or for Purchaser or its Affiliates (the "Purchaser Modifications").
6. CONFIDENTIAL INFORMATION
-4-
6.1 DEFINITION. As used herein, "Confidential Information" means the
specific terms of this Agreement and any other proprietary or confidential
information of either party. Confidential Information includes, without
limitation, any source code, the parties' methods of operation, future plans and
release dates, any written materials marked as confidential, and other materials
or information which reasonably should be understood by the recipient of such
information ("Recipient") to be confidential. Confidential Information does not
include information that Recipient can prove: (i) is now or later becomes
generally available to the public without fault or breach of Recipient; (ii) was
rightfully in Recipient's possession prior to disclosure by the other party
("Discloser"); (iii) is independently developed by Recipient without the use of
any Confidential Information of Discloser; or (iv) is rightfully obtained by
Recipient from a third party who has the right to disclose it.
6.2 USE AND DISCLOSURE. Each party, as Recipient, agrees that it will not
disclose to any person or use for any purpose except as expressly permitted by
this Agreement, any Confidential Information of Discloser. Recipient may
disclose Confidential Information only to its employees, contractors and
consultants who have a need to know such information. Recipient shall inform
such employees, contractors and consultants that under this Agreement they are
bound by obligations of confidentiality and shall maintain with each such
employee, consultant and contractor a written agreement sufficient to require
the employee, consultant and contractor to keep this type of information
confidential.
6.3 SECURITY. Each party agrees to carefully and continuously control use
and disclosure of the other party's Confidential Information, and to treat it
with at least the same level of protection as it affords its own Confidential
Information of similar nature, but not less than a reasonable level of
protection. Recipient shall not copy confidential Information except to the
extent necessary for the purposes of this Agreement. Recipient shall promptly
notify Discloser if it becomes aware of any unauthorized disclosure or use of
Discloser's Confidential Information, and shall take all reasonable steps
requested by Discloser to remedy the same.
6.4 PUBLIC ANNOUNCEMENTS. Except to the extent required by applicable
law, neither party shall publicly disclose any terms of this Agreement without
prior approval from the other party. The parties agree to cooperate with each
other with respect to the content, timing, channel and scope of any initial
public announcement concerning this Agreement.
7. MISCELLANEOUS
-5-
7.1 NOTICE. All notices between the parties shall delivered in accordance
with the provisions respecting same contained in the Asset Purchase Agreement.
7.2 ENTIRE AGREEMENT; AMENDMENT; WAIVER. This Agreement, and the other
agreements between the parties executed on the date hereof or in connection
herewith, constitutes the entire understanding and contract between the parties
hereto and supersedes any and all prior or contemporaneous oral or written
representations or communications with respect to this matter. Except as
otherwise expressly provided herein, this Agreement may be modified or amended
only by a writing signed by duly authorized representatives of both parties.
The waiver by either party of any default or breach of this Agreement, or any
obligation hereunder, shall be ineffective unless in writing. No failure to
exercise any right or power under this Agreement or to insist on strict
compliance by the other party shall constitute a waiver of the right
subsequently to exercise such right or power or to insist on strict compliance.
7.3 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Province of Ontario, and the federal laws of
Canada applicable therein, without regard to any law regarding conflicts of
laws.
7.4 SEVERABILITY. If any term of this Agreement is held invalid or
unenforceable by a court or arbitrator of competent jurisdiction, such term
shall be reduced or otherwise modified by such court or arbitrator to the
minimum extent necessary to make it valid and enforceable. If such term cannot
be so modified, it shall be severed and the remaining terms of this Agreement
shall be interpreted in such a way as to give maximum validity and
enforceability to the terms of this Agreement as originally intended by the
parties.
7.5 BINDING EFFECT; ASSIGNMENT. This Agreement is binding upon the
parties and their respective successors, representatives and assigns; however,
neither this Agreement nor individual transactions nor rights under it shall be
assigned, nor shall any obligation be delegated by either party, without the
prior written consent of the other, except (a) to an Affiliate provided the
Party assigning continues to remain liable for performance of the obligations
hereunder in addition to the assignee, or (b) Purchaser may transfer, sell or
assign its rights to a third party in and to the Purchaser Licensed Software
(subject to Vendor rights under this License) without Vendor's consent, at any
time, in which event the royalty obligation set out in Article 4.2 hereof shall
cease. Any attempted assignment or delegation otherwise than as permitted by
this Section 8.5 shall be void, provided, however, that either party shall have
the right to assign its rights and obligations hereunder to any affiliated
company. For purposes of this Agreement, "affiliated company" shall mean any
person or entity (whether incorporated or not) that is
-6-
controlled by, controls, or is under common control with that party, and
"control" shall mean ownership of at least fifty percent (50%) of the voting
equity of such party or entity or the power to direct such person or entity's
management.
7.6 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 party an original of the signed
copy of this Agreement which was so faxed.
7.7 NO AGENCY. This Agreement shall not be construed to create an agency
or partnership between the parties. Neither party has the authority to bind the
other, to incur any liability or otherwise act on behalf of the other, or to
direct the employees of the other.
7.8 OTHER RESTRICTIONS. In addition to the restrictions specifically
outlined herein and in the Schedules hereto, all software licenses under this
Agreement are also subject to the restrictions of the Canadian and United States
export laws.
8. DISPUTES.
8.1 DISPUTES. The parties agree that they shall settled any disputes
arising from or in connection with this Agreement in accordance with the
arbitration provisions set out in the Asset Purchase Agreement.
-7-
The undersigned parties have executed this Software License Agreement
effective as of the date set forth on the first page hereof.
DELRINA CORPORATION JETFORM CORPORATION
By: ___________________________ By: ___________________________
Name: ________________________ Name: John Kelly
Title: ________________________ Title: President and Chief Executive
Officer
Address: 895 Don Mills Road Address: 500 - 560 Rochester Street
500 - 2 Park Centre Ottawa, Ontario, Canada
Toronto, Ontario K1S 5K2
M3C 1W3
-8-
Pursuant to the instruction to this Form 8-K, the following is a list of all
omitted schedules to the above-referenced agreement. Registrant agrees to
furnish supplementally a copy of any omitted schedule to the Commission upon
request.
SCHEDULES
1.1(5) Assumed Liabilities
1.1(24) Excluded Contracts
1.1(34)(j) Licence of Delrina Name
1.1(40) Licensed Software
2.3 Payment of Purchase Price
4.1(4) Location of Assets
4.1(5) Personal Property
4.1(6) Premises Lease
4.1(7) Personal Property Leases
4.1(8) Material Contracts
4.1(8)(a) Non-Standard Form Contract
4.1(8)(b) Standard Form Contracts
4.1(10)(a) Software Related to Business
4.1(10)(d) Obligation to Pay Compensation
4.1(11)(a) Intellectual Property
4.1(11)(b) Ownership of Intellectual Property
4.1(11)(c) Intellectual Property Royalty Fees
4.1(11)(f) Person Permitted to use Market and Distribute
Intellectual Property
4.1(12)(a) Transfer of Licenses and Permits
4.1(13) Consents and Approvals
4.1(18) Employees and Employee Contracts
4.1(20) Customers and Suppliers
4.1(24) Financial Statements - Pro Forma Balance Sheet
6.1 Employees to be Offered Employment