MEMORANDUM OF AGREEMENT made the 31st day of July, 1997.
B E T W E E N:
SATISH KUMETA
(hereinafter called the "Vendor")
OF THE FIRST PART,
- and -
VIRTUAL PERFORMANCE SYSTEMS INC.
(hereinafter called the "Purchaser")
OF THE SECOND PART,
WHEREAS the Vendor is the owner of the intellectual property
described in Schedule "A" hereto (the "Purchased Property");
AND WHEREAS the Vendor wishes to sell and the Purchaser wishes to
purchase such Purchased Property upon and subject to the terms and conditions
hereinafter set out;
NOW, THEREFORE THIS AGREEMENT WITNESSETH that in consideration of
the mutual covenants herein contained and other good and valuable consideration,
the receipt and sufficiency whereof are hereby acknowledged by each of the
parties from the other, the parties agree as follows:
1. Purchased Property
1.1 With effect as at the close of business on July 31, 1997 (the "Effective
Time"), the Vendor hereby sells, transfers, assigns, bargains and conveys to the
Purchaser and the Purchaser hereby purchases from the Vendor all right, title
and interest of the Vendor in and to the Purchased Property for a purchase price
determined as provided in Article 2 hereof.
2. Purchase Price
2.1 The purchase price of the Purchased Property (the "Purchase Price") shall be
the fair market value of the Purchased Property as at the Effective Time which
the parties have estimated to be Two Hundred Thousand dollars ($200,000).
3. Satisfaction of Purchase Price
3.1 The Purchase Price shall be satisfied by the allotment and issue to the
Vendor of 35 common shares in the capital of the Purchaser.
3.2 The parties agree that the stated capital account maintained by the
Purchaser for such common shares is to be designated as one dollar ($1.00).
4. Adjustment to Purchase Price
4.1 The parties agree that the Purchase Price is intended to be the fair market
value of the Purchased Property and declare that the estimate set out in Article
2 is the parties= bona fide belief and agreement as to such fair market value.
Notwithstanding Section 2.1 in the event that any taxing authority having
jurisdiction alleges that the estimate as set out above is not the fair market
value of the Purchased Property or proposes to make an assessment of tax on the
basis that any benefit or advantage is or has been conferred on any person by
reason of the purchase and sale provided for herein, then the Purchase Price
shall be deemed to be and always to have been the fair market value of the
Purchased Property as at the Effective Time as subsequently determined by the
board of directors of the Purchaser after consultation with such taxing
authority, and the Purchase Price shall be adjusted accordingly nunc pro tunc,
with such other adjustments as may be necessary.
5. Representations and Warranties of the Vendor
5.1 The Vendor represents and warrants as follows and acknowledges that the
Purchaser is relying upon such representations and warranties in connection with
the purchase by the Purchaser of the Purchased Property:
a) The Purchased Property is owned by the Vendor as the beneficial
owner of records, with a good and marketable title thereto, free and
clear of all mortgages, liens, charges, security interests adverse
claims, pledges, encumbrances and demands whatsoever;
b) No person, firm or corporation has any agreement or option or any
right or privilege (whether by law, pre-emptive or contractual)
capable of becoming an agreement or option for the purchase from the
Vendor of any of the Purchased Property; and
c) The Vendor is, and as at the Effective Time will be, a resident of
Canada, for the purposes of the Income Tax Act (Canada).
6. Representations and Warranties of the Purchaser
6.1 The Purchaser represents and warrants as follows and acknowledges that the
Vendor is relying upon such representations and warranties in connection with
the sale by the Vendor of the Purchased Property:
a) The Purchaser has been duly incorporated and is validly subsisting
under the laws of Ontario; 1)
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b) The Purchaser has full authority to enter into and carry out the
provisions of this agreement; and
c) The common shares to be issued by the Purchaser to the Vendor in
payment of the Purchase Price will be validly allotted and issued as
fully paid and non-assessable to the Vendor, free and clear of all
mortgages, liens, charges, encumbrances and demands whatsoever.
7. Election under the Income Tax Act (Canada)
7.1 The parties shall elect jointly pursuant to the provisions of section 85 of
the Income Tax Act (Canada), by completing and filing all prescribed forms and
related documents in such manner and at such time as is prescribed, that for tax
purposes only, the proceeds of disposition received by the Vendor for the
Purchased Property and the cost of the Purchased Property to the Purchaser shall
be an amount that is not less than the adjusted cost base of the Purchased
Property to the Vendor nor greater than the fair market value of the Purchased
Property as at the Effective Time.
8. Transfer
8.1 This agreement is intended to be and shall be and operate as an immediate
and effective transfer and assignment of the Purchased Property by the Vendor to
the Purchaser as at the Effective Time. The parties agree to do all such other
acts and things as may be necessary to give effect to the provisions hereof, and
without limiting the generality of the foregoing, to validly and effectively
transfer the Purchased Property from the Vendor to the Purchaser as at the
Effective Time.
9. Applicable Law
9.1 This agreement shall be construed in accordance with and governed by the
laws of the Province of Ontario.
10. Binding Effect
10.1 This agreement shall enure to the benefit of and be binding upon the
parties and their respective heirs, legal representatives, successors and
assigns.
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IN WITNESS WHEREOF the parties have executed this agreement as of
the date first mentioned above.
/s/ Satish Kumeta
--------------------------------------
SATISH KUMETA
VIRTUAL PERFORMANCE SYSTEMS LTD.
Per: /s/ Anthony Comparelli
---------------------------
ANTHONY COMPARELLI
Schedule "A"
INTELLECTUAL PROPERTY ASSIGNMENT
1. The undersigned SATISH KUMETA of 310-1050 Castlefield Avenue,
Toronto, Ontario, M6B 167 (the "Assignor"), in consideration of the
sum of $1.00 and other valuable consideration, the receipt and
sufficiency of which is acknowledged, does hereby grant, assign and
convey to and in favour of VIRTUAL PERFORMANCE SYSTEMS, INC., a
corporation incorporated under the laws of the Province of Ontario,
the full post office address of whose principal office or place of
business is suite 1800, 5775 Yonge Street, North York, Ontario M2M
4]1, (the "Assignee"), all the right, title and interest, including
all goodwill arising therefrom which the Assignor may have acquire
or has acquired worldwide, in the intellectual property identified
in Schedule AA:.
2. The Assignee appoints Tony Comparelli whose full post office address
in Canada is suite 1800, 5775 Yonge Street, North York, Ontario, M2M
4]1, as the person to which any notice in respect of this Assignment
or any application or registration may be sent and on which service
of any proceedings in respect of the Assignment or any application
or registration may be given or served with the same effect as if
they had been given or served on the Assignee, applicant or
registrant.
3. The Assignee accepts this Assignment.
IN WITNESS WHEREOF the Assignor and the Assignee have duly executed
this agreement as of the 8th day of August, 1997.
/s/ Satish Kumeta
------------------------------------
SATISH KUMETA
VIRTUAL PERFORMANCE SYSTEMS INC.
Per: /s/
-----------------------------------
[Authorized Officer]
SCHEDULE "A"
VIRTUAL PERFORMANCE SYSTEMS INC.
1. Virtual Performance System (VPS)
The virtual performance system (VPS), is a 3D VRML (Virtual Reality
Modeling Language) interface into an Enterprise=s resources. It can
be considered as a framework to measure quantifiable data across an
enterprise using proprietary PUSH/PULL technology.
2. Technology Overview
VPS is a framework built in Java to measure quantifiable
data across clients and servers in an architecture, operating system
and application independent method on the Internet (or the
Intranet).
The core functionality of the system is to farm quantifiable data
from multiple clients and send it to a server. The server in turn
uses the data to perform required actions, such as draw graphs, send
notifications, data warehouse, modify client behavior or send it to
an external application. The clients and servers can be configured
to exchange data between each other in real time or at some
predetermined or configured intervals.
The distinguishing advantage of this proprietary technology is that
NO CHANGES need to be made to the existing applications to measure
data across a client(s) Server(s) platform(s).
The following picture is used to illustrate the logical flow of
control in the VPS framework.