1
EXHIBIT 2.1
XXXX XXXXXXXX
AND
XXXXX XXXXXX
AND
XXXX ST-PIERRE
AND
XXXXXX XXXXXX
AND
9044-0108 QUEBEC INC.
AND
SOCIETE INNOVATECH QUEBEC ET CHAUDIERE-APPALACHES
AND
SOFINOV, SOCIETE FINANCIERE D'INNOVATION INC.
AND
BUSINESS DEVELOPMENT BANK OF CANADA
COLLECTIVELY, AS INVESTORS
AND
XXXXXXXXX XXXXX
AND
XXXXXXX XXXXXX
AND
THE OTHER SHAREHOLDERS LISTED ON THE SIGNATURE PAGE HERETO
AS MINORITY SHAREHOLDERS
AND
ADEPT TECHNOLOGY CANADA HOLDING CO.
AS PURCHASER
AND
ADEPT TECHNOLOGY, INC.
AS ADEPT
--------------------------------------------------------------------------------
SHARE PURCHASE AGREEMENT
DATED AS OF JULY 21, 2000
Stikeman Elliott
--------------------------------------------------------------------------------
2
TABLE OF CONTENTS
PAGE
ARTICLE 1 INTERPRETATION..........................................................................................1
1.1 Defined Terms............................................................................................1
1.2 Gender and Number........................................................................................8
1.3 Headings, etc............................................................................................8
1.4 Currency.................................................................................................8
1.5 Knowledge................................................................................................8
1.6 Accounting Terms.........................................................................................9
1.7 Incorporation of Schedules...............................................................................9
1.8 Interpretation...........................................................................................9
1.9 List of Schedules........................................................................................9
ARTICLE 2 HEXAVISION SHARES AND PURCHASE PRICE...................................................................10
2.1 Purchase and Sale of Hexavision.........................................................................10
2.2 Purchase and Sale of Holdco.............................................................................10
2.3 Purchase Price..........................................................................................10
2.4 Payment of the Purchase Price...........................................................................11
2.5 Payment of Bonuses to Indemnifying Employees............................................................12
2.6 Adjustment..............................................................................................12
2.7 Indemnity Fund..........................................................................................13
2.8 No Registration Under Securities Act; SEC Documents; Adept Financial Statements.........................13
2.9 Escrow Parties and Minority Shareholders Representations................................................15
2.10 Xxxxxx Representations................................................................................15
This Agreement is made with Xxxxxx upon the understanding as a specific representation to Purchaser and Adept
by Xxxxxx that:...............................................................................................15
2.11 Stock Restrictions....................................................................................16
2.12 Repayment of Loans....................................................................................18
2.13 Termination of Shareholders Agreement.................................................................18
ARTICLE 3 REPRESENTATIONS AND WARRANTIES OF ESCROW PARTIES; AND MINORITY SHAREHOLDERS............................18
3.1 Individual Representations and Warranties of Vendors and Xxxxxx.........................................18
3.2 Solidary Representations and Warranties of Escrow Parties...............................................20
ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF HOLDCO VENDORS.......................................................39
4.1 Individual Representations and Warranties of Holdco Vendors.............................................39
4.2 Solidary Representations and Warranties of Holdco Vendors...............................................41
ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF PURCHASER............................................................41
5.1 Representations and Warranties of Purchaser and Adept...................................................41
ARTICLE 6 CLOSING................................................................................................42
6.1 Date, Time and Place of Closing.........................................................................42
ARTICLE 7 INDEMNIFICATION........................................................................................42
7.1 Escrow Parties Indemnification in Favour of Purchaser...................................................42
7.2 Minority Shareholder Indemnification in Favor of Purchaser..............................................43
7.3 Holdco Vendors Indemnification in Favor of Purchaser....................................................44
7.4 Purchaser and Adept Indemnification in Favour of Escrow Parties and Minority Shareholders...............44
7.5 Time Limitations........................................................................................44
7.6 Limitation on Damages...................................................................................45
7.7 Liability of Escrow Parties Among Themselves............................................................47
7.8 Obligation to Reimburse.................................................................................47
7.9 Notification............................................................................................48
-i-
3
7.10 Defense of Third Party Claim............................................................................48
ARTICLE 8 POST-CLOSING COVENANTS.................................................................................50
8.1 Further Assurances......................................................................................50
ARTICLE 9 MISCELLANEOUS..........................................................................................50
9.1 Notices.................................................................................................50
9.2 Time of the Essence.....................................................................................51
9.3 Brokers.................................................................................................51
9.4 Announcements...........................................................................................52
9.5 Third Party Beneficiaries...............................................................................52
9.6 Expenses................................................................................................52
9.7 Amendments..............................................................................................52
9.8 Waiver..................................................................................................52
9.9 Non-Merger..............................................................................................52
9.10 Entire Agreement......................................................................................53
9.11 Successors and Assigns................................................................................53
9.12 Severability..........................................................................................53
9.13 Governing Law.........................................................................................53
9.14 Further Assurances....................................................................................53
9.15 Successors in Interest................................................................................53
9.16 Language..............................................................................................54
9.17 Counterparts..........................................................................................54
-ii-
4
SHARE PURCHASE AGREEMENT
Share Purchase Agreement dated July 21, 2000, among Xxxx Xxxxxxxx
("XXXXXXXX"), Xxxxx Xxxxxx ("XXXXXX"), Xxxx St-Pierre ("ST-PIERRE"), Xxxxxx
Xxxxxx ("XXXXXX"), and 0000-0000 Xxxxxx Inc. ("9044") (Tremblay, Rivard,
St-Pierre, Xxxxxx and 9044 being hereinafter collectively referred to as "HOLDCO
VENDORS") and Societe Innovatech Quebec et Chaudiere-Appalaches, ("INNOVATECH"),
Sofinov, Societe Financiere d'Innovation Inc. ("SOFINOV") and Business
Development Bank of Canada ("BDC") (Innovatech, Sofinov and BDC being
hereinafter collectively referred to as "INVESTORS") and Xxxxxxxxx Xxxxx
("XXXXX") and Xxxxxxx Xxxxxx ("XXXXXX") and the other shareholders listed on the
signature page hereto (collectively, the "MINORITY SHAREHOLDERS") and Adept
Technology Canada Holding Co., a corporation formed under the Companies Act
(Nova Scotia) ("PURCHASER") and Adept Technology, Inc., a corporation
incorporated under the laws of California ("ADEPT").
WHEREAS Hexavision Technologies Inc., a company continued under the laws
of Nova Scotia, is in the business of producing machine vision systems;
WHEREAS Adept is a leading developer of robotic technology and a
producer of robots;
WHEREAS at Closing Xxxxx and St-Pierre will each enter into an
employment agreement with Hexavision and Xxxxxx will enter into an employment
agreement with Adept (collectively, the "EMPLOYMENT AGREEMENTS");
WHEREAS Holdco Vendors own all of the issued and outstanding shares in
the capital of Holdco; and
WHEREAS Adept wishes to acquire all the issued and outstanding shares of
Hexavision and Holdco.
NOW, THEREFORE THIS AGREEMENT sets forth the terms and conditions upon
which Purchaser will purchase, and Vendors have agreed to sell, all of the
issued and outstanding shares of Hexavision and the terms and conditions upon
which Purchaser will purchase, and the Holdco Vendors have agreed to sell, all
of the issued and outstanding shares of Holdco.
ARTICLE 1
INTERPRETATION
1.1 DEFINED TERMS.
As used in this Agreement, the following terms have the following
meanings:
"9044" has the meaning specified in the initial description of the
parties hereto.
"ADEPT" has the meaning specified in the initial description of the
parties hereto.
-1-
5
"ADEPT SHARES" means shares of Common Stock of Adept with .10 cents par
value.
"AFFILIATE" has the meaning specified in the Canada Business
Corporations Act.
"AGREEMENT" means this share purchase agreement and all schedules and
instruments in amendment or confirmation of it; and the expressions
"ARTICLE" and " SECTION" followed by a number mean and refer to the
specified Article or Section of this Agreement.
"AUTHORIZATION" means, with respect to any Person, any order, permit,
approval, waiver, license or similar authorization of any Governmental
Entity having jurisdiction over the Person.
"AVERAGE PRICE" means the average trading price of the Adept Shares as
quoted on the Nasdaq National Market for the 30-day period ending on
(and including) the Contingency Date.
"BDC" has the meaning specified in the initial description of the
parties hereto.
"XXXXXX" has the meaning specified in the initial description of the
parties hereto.
"BONUS PAYMENTS" has the meaning specified in Section 2.5.
"BOOKS AND RECORDS" means all books of account, tax records, sales and
purchase records, customer and supplier lists, business reports, plans
and projections and all other documents, files, correspondence and other
information of Hexavision and its Subsidiary whether in writing or
electronic form.
"BUSINESS DAY" means any day other than a Saturday, Sunday or other day
on which the principal commercial banks in Montreal, Quebec are not open
for business during normal business hours.
"CAPS" has the meaning specified in Section 7.6(2).
"CLAIMED AMOUNT" has the meaning specified in the Indemnification Escrow
Agreement.
"CLOSING" means the completion of the transaction of purchase and sale
contemplated in this Agreement.
"CLOSING DATE" means the date hereof.
"COGNEX" has the meaning specified in Section 7.1(d).
"COGNEX CLAIM" had the meaning specified in Section 7.1(d).
"CONSENT" means the consent of a contracting party to a change in
control of Hexavision or the indirect change of control of the
Subsidiary, as the case may be, if required by the terms of any
Contract.
-2-
6
"CONTINGENCY" has the meaning specified in Section 2.4(b).
"CONTINGENCY DATE" has the meaning specified in Section 2.4(b).
"CONTINGENT PAYMENT" has the meaning specified in Section 2.4(c).
"CONTINGENT SHARES" has the meaning specified in Section 2.4(d).
"CONTRACTS" means all agreements to which any of Hexavision or its
Subsidiary is a party including all contracts, leases of personal
property and commitments of any nature, written or oral, including (i)
unfilled purchase orders received by any of Hexavision or its
Subsidiary, (ii) forward commitments by Hexavision or its Subsidiary for
supplies or materials entered into in the Ordinary Course, (iii) the
Licensed Technology Agreements and the Technology Exploitation
Agreements and (iv) restrictive agreements and negative covenant
agreements which any of Hexavision or its Subsidiary has with its
employees, past or present.
"COPYRIGHTS" has the meaning specified in Section 1.1.
"CORPORATE RECORDS" means the corporate records of Hexavision and its
Subsidiary, including all constating documents and by-laws, all minutes
of meetings and resolutions of shareholders and directors (and any
committees), and the share certificate books, securities register,
register of transfers and register of directors.
"DAMAGES" means any loss, liability, claim, damages or expenses (whether
or not involving a third-party claim) including legal expenses.
"EMPLOYEE PLANS" means all the employee benefit, fringe benefit,
supplemental unemployment benefit, bonus, incentive, profit sharing,
termination, change of control, pension, retirement, stock option, stock
purchase, stock appreciation, health, welfare, medical, dental,
disability, life insurance and similar plans, programmes, arrangements
or practices relating to the current or former employees, officers or
directors of Hexavision and its Subsidiary maintained, sponsored or
funded by Hexavision and its Subsidiary, whether written or oral, funded
or unfunded, insured or self-insured, registered or unregistered.
"EMPLOYMENT AGREEMENTS" has the meaning specified in the preamble
hereto.
"ENVIRONMENTAL LAWS" means all applicable Laws and agreements with
Governmental Entities and all other statutory requirements relating to
public health or the protection of the environment and all
Authorizations issued pursuant to such Laws, agreements or statutory
requirements.
"ESCROW AGENT" means Montreal Trust Company.
"ESCROW PARTIES" shall mean the Investors, Holdco Vendors and the
Indemnifying Employees.
-3-
7
"ESCROW PARTY CONTROLLED CLAIM" has the meaning specified in Section
7.10.
"FINANCIAL STATEMENTS" shall mean the audited consolidated financial
statements for Hexavision and its Subsidiary consisting of balance
sheets as at January 31, 1999 and January 31, 2000 and the accompanying
statements of losses, retained losses and changes in financial position
for each of the 12 month periods ended January 31, 1999 and January 31,
2000, respectively, and notes to the financial statements together with
the auditor's reports thereon, a copy of which financial statements are
annexed hereto as Schedule 3.2(x).
"GAAP" means, at any time, accounting principles generally accepted in
Canada including those set out in the Handbook of the Canadian Institute
of Chartered Accountants, at the relevant time applied on a consistent
basis.
"GATIQ" means the Developpement Economique Canada (GATIQ).
"GOVERNMENTAL ENTITY" means any (i) multinational, federal, provincial,
state, municipal, local or other governmental or public department,
central bank, court, commission, board, bureau, agency or
instrumentality, domestic or foreign, (ii) any subdivision or authority
of any of the foregoing, or (iii) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under or
for the account of any of the above.
"HEXAVISION" has the meaning specified in the recitals hereto.
"HEXAVISION SHARES" has the meaning specified in Section 2.1.
"HOLDCO" means 3340538 Canada Inc., a corporation incorporated under the
Canadian Business Corporations Act.
"HOLDCO SHARES" has the meaning specified in Section 2.2.
"HOLDCO SHAREHOLDERS AGREEMENT" has the meaning specified in Section
2.13.
"HOLDCO VENDORS" has the meaning specified in the initial description of
the parties hereto.
"INDEMNIFICATION ESCROW AGREEMENT" has the meaning set forth in Section
2.4(c).
"INDEMNIFIED PARTY" has the meaning specified in Section 7.8.
"INDEMNIFYING EMPLOYEE SHARES" has the meaning specified in Section
2.5(c).
"INDEMNIFYING EMPLOYEES" has the meaning specified in Section 2.5.
"INDEMNIFYING PARTY" has the meaning specified in Section 7.8.
"INDEMNIFYING VENDOR SHARES" has the meaning specified in Section
2.4(e).
-4-
8
"INDEMNITY FUND" has the meaning specified in Section 2.7.
"INDEMNITY SHARE VALUE" has the meaning specified in Section 2.7.
"INDIVIDUAL CAP" has the meaning specified in Section 7.6(3).
"INDIVIDUAL REPRESENTATIONS AND COVENANTS" has the meaning specified in
Section 7.6(1).
"INTELLECTUAL PROPERTY ASSETS" means all Intellectual Property Rights
owned or licensed by Hexavision or its Subsidiary.
"INTELLECTUAL PROPERTY RIGHTS" means all the rights of Hexavision or its
Subsidiary in the following, whether protected, created or arising under
the laws of Canada or any foreign, state or other jurisdiction:
(i) business names, trade names, trademarks and service marks
(whether registered or unregistered, including any applications
for registration of any of the foregoing), logos, Internet
domain names, trade dress rights and general intangibles of a
like nature, together with the goodwill associated with any of
the foregoing (collectively, "MARKS");
(ii) patent rights listed in Schedule 3.2(u)(iii) (collectively, the
"PATENT RIGHTS");
(iii) topographies, codes, Software, copyrightable works, including
but not limited to all registrations and applications therefor
(collectively, "COPYRIGHTS"); and
(iv) know-how, inventions, discoveries, concepts, ideas, methods,
processes, formulae, technical data, confidential information
and other proprietary information, including customer lists,
excluding any rights in respect of any of the foregoing that
comprise or are protected by Copyrights or Patent Rights
(collectively, "TRADE SECRETS").
"INTERIM FINANCIAL STATEMENTS" means the consolidated unaudited balance
sheet of Hexavision and its Subsidiary as at April, 30, 2000 and the
accompanying consolidated unaudited statement of income (loss) of
Hexavision and its Subsidiary for the three month period then ended and
all notes in respect thereof.
"INNOVATECH" has the meaning specified in the initial description of the
parties hereto.
"INVESTORS" has the meaning specified in the initial description of the
parties hereto.
"ITA" has the meaning specified in Section 3.2(hh)(ix).
"XXXXX" has the meaning specified in the initial description of the
parties hereto.
"LAWS" shall mean (i) all constitutions, treaties, laws, statutes,
codes, ordinances, orders, decrees, rules, regulations, and municipal
by-laws, whether domestic, foreign or international; and (ii) all
judgments, orders, writs, injunctions, decisions, rulings,
-5-
9
decrees, and awards of any Governmental Entity; in each case binding on
or affecting the Party or Person referred to in the context in which
such word is used; for greater certainty Laws shall include
Environmental Laws; and "LAW" shall mean any one of them.
"LEASE" means that certain lease dated May 26, 1998 as amended between
SITQ Bureau Inc. and Hexavision with respect to the Leased Property.
"LEASED PROPERTY" means Suite 200 of that certain building bearing civic
number 1020, Xxxxx xx x'Xxxxxx, Xxxxxx-Xxx, Xxxxxx X0X 0X0.
"LICENSED INTELLECTUAL PROPERTY" has the meaning specified in Section
3.2(u)(v)(f).
"LICENSED TECHNOLOGY AGREEMENTS" has the meaning specified in Section
3.2(u)(v).
"LIEN" means any mortgage, charge, pledge, hypothecation, security
interest, assignment, lien (statutory or otherwise), prior claims, title
retention agreement or arrangement, restrictive covenant or other
encumbrance of any nature whatsoever, however so arising or any other
arrangement or condition which, in substance, secures payment or
performance of an obligation.
"MARKS" has the meaning specified in Section 1.1.
"MATERIAL CONTRACTS" has the meaning specified in Section 3.2(s).
"MINORITY SHAREHOLDERS" has the meaning specified in the initial
description of the parties hereto.
"XXXXXX" has the meaning specified in the initial description of the
parties hereto.
"NOTICE" has the meaning specified in Section 7.9.
"OPERATIONAL AMOUNT" means the sum of $8,330 and $16,000 (being $24,330)
representing the agreed expenses to be incurred by Hexavision in respect
of certain software to be purchased and certain employee related
deductions and payments.
"ORDINARY COURSE" means, with respect to an action taken by a Person,
that such action is consistent with the past practices of the Person and
is taken in the ordinary course of the normal day-to-day operations of
the Person.
"OWNED COPYRIGHT" has the meaning specified in Section 3.2(u)(iv).
"OWNED MARKS" has the meaning specified in Section 3.2(u)(i).
"OWNED PATENT RIGHTS" has the meaning specified in Section 3.2(u)(iii).
"PARTIES" means all of the parties to this Agreement and any other
Person who may become a party to this Agreement.
-6-
10
"PATENTS" means (a) patents and all applications therefor, including any
and all continuations divisional, continuation in part, or reissued
patent applications or patents issuing thereon and (b) disclosures
relating to any inventions, improvements, processes, models or concepts
which might properly constitute material for a patent application.
"PENDING MATTERS" has the meaning specified in Section 2.8(c).
"PERSON" means a natural person, partnership, limited liability
partnership, corporation, joint stock company, trust, unincorporated
association, joint venture or other entity or Governmental Entity, and
pronouns have a similarly extended meaning.
"PUBLIC STATEMENTS" has the meaning specified in Section 9.4.
"PURCHASE PRICE" has the meaning specified in Section 2.3.
"PURCHASER" has the meaning in the initial description of the parties
hereto.
"PURCHASER CONTROLLED CLAIM" has the meaning set forth in Section 7.10.
"R&D CREDIT OR REFUNDS" has the meaning specified in Section
3.2(hh)(xi).
"RELEASED PARTIES" has the meaning specified in Section 2.13.
"REQUIRED CONSENTS" means those Consents and Authorizations listed and
described in Schedule 3.2(c) and Schedule 3.2(e).
"XXXXXX" has the meaning specified in the initial description of the
parties hereto.
"SEC" means the United States Securities and Exchange Commission.
"SEC DOCUMENTS" has the meaning specified in Section 2.8.
"SECURITIES ACT" has the meaning specified in Section 2.8.
"SHAREHOLDERS AGREEMENT" means the unanimous shareholders agreement of
Hexavision dated June 13, 1997 together with all amendments thereto
among Hexavision, Holdco and the Investors.
"SHARES" means collectively, the Contingent Shares, the Indemnifying
Vendors Shares and the Indemnifying Employee Shares.
"SOFINOV" has the meaning specified in the initial description of the
parties hereto.
"SOFTWARE" means any and all (i) computer programs, including any and
all software implementations of algorithms, models and methodologies,
whether in source code or object code, (ii) databases and compilations,
including any and all data and collections of data, whether machine
readable or otherwise, (iii) descriptions, flow-charts and other work
product used to design, plan, organize and develop any of the foregoing,
and (iv)
-7-
11
all documentation, including user manuals and training materials,
relating to any of the foregoing, in each case developed, owned or
licensed by Hexavision and/or Subsidiary.
"SOLIDARY REPRESENTATIONS AND COVENANTS" has the meaning specified in
Section 7.6(1).
"ST-PIERRE" has the meaning specified in the initial description of the
parties hereto.
"SUBSIDIARY" means Hexavision, Inc., a company incorporated under the
laws of Delaware and a wholly-owned subsidiary of Hexavision.
"SYSTEMS" has the meaning specified in Section 3.2(u)(xi).
"TAX" or "TAXES" has the meaning specified in Section 3.2(hh)(i).
"TAX RETURNS" has the meaning specified in Section 3.2(hh)(ii).
"TECHNOLOGY EXPLOITATION AGREEMENTS" has the meaning specified in
Section 3.2(u)(vi).
"THIRD PARTY CLAIM" has the meaning specified in Section 7.10(1).
"TRADE SECRETS" has the meaning specified in Section 1.1.
"XXXXXXXX" has the meaning specified in the initial description of the
parties hereto.
"VENDORS" means Investors, Xxxxxxxx and Xxxxx and the Minority
Shareholders.
1.2 GENDER AND NUMBER.
Any reference in this Agreement to gender includes all genders and words
importing the singular number only shall include the plural and vice versa.
1.3 HEADINGS, ETC.
The provision of a Table of Contents, the division of this Agreement
into Articles and Sections and the insertion of headings are for convenient
reference only and are not to affect its interpretation.
1.4 CURRENCY.
All references in this Agreement to dollars, unless otherwise
specifically indicated, are expressed in United States currency.
1.5 KNOWLEDGE.
Where any representation or warranty contained in this Agreement is
expressly qualified by reference to "knowledge", it shall be deemed to refer to
the actual knowledge of the Person making the representation or warranty.
-8-
12
1.6 ACCOUNTING TERMS.
All accounting terms not specifically defined in this Agreement shall be
interpreted in accordance with GAAP.
1.7 INCORPORATION OF SCHEDULES.
The schedules attached to this Agreement shall, for all purposes of this
Agreement, form an integral part of it.
1.8 INTERPRETATION.
All uses of the terms Marks, Patent Rights, Copyrights and Trade Secrets
in Section 3.2(u) shall mean Marks, Patent Rights, Copyrights and Trade Secrets
that are Intellectual Property Assets. All references in this Agreement to the
ITA and to amounts to be withheld pursuant thereto shall be deemed to be made to
the ITA, as now enacted or as it may from time to time be amended, re-enacted or
replaced, and in the case of any such amendment, re-enactment or replacement,
any references herein to the ITA and to amounts to be withheld pursuant thereto
shall be read as referring to such amended, re-enacted or replaced provisions.
1.9 LIST OF SCHEDULES
The following is a list of the Schedules attached hereto and
incorporated herein by reference:
Schedule 2.4(a) - Allocation of Purchase Price Payable at Closing
Schedule 2.4(b)(i) - Allocation of Payments to Minority Shareholders
Schedule 2.4(b)(ii) - Names of Employees
Schedule 2.4(c)(i) - Allocation of Contingent Payment
Schedule 2.4(c)(ii) - Indemnification Escrow Agreement
Schedule 2.4(d) - Allocation of Contingent Shares
Schedule 2.4(e) - Allocation of Indemnifying Vendor Shares
Schedule 2.5 - Bonus Payments
Schedule 2.6 - Adjustment Formula
Schedule 2.12 - Repayment of Loans
Schedule 3.1(d) - Hexavision Shares
Schedule 3.2(a) - Jurisdictions
Schedule 3.2(c) - Consents and Authorizations
Schedule 3.2(f) - Other Options, Securities of Hexavision and its Subsidiary
Schedule 3.2(k) - Conduct of Business not in the Ordinary Course
Schedule 3.2(o) - Liens
Schedule 3.2(q) - Owned Property
Schedule 3.2(s) - Material Contracts
Schedule 3.2(t) - Breaches of Material Contracts
Schedule 3.2(u)(i) - Owned Marks
Schedule 3.2(u)(iii) - Owned Patent Rights
Schedule 3.2(u)(iii)(e) - Protection of Patent Rights
Schedule 3.2(u)(iv) - Owned Copyrights
-9-
13
Schedule 3.2(u)(iv)(b) - Persons not having waived Moral Rights
Schedule 3.2(u)(v) - Licensed Technology Agreements
Schedule 3.2(u)(vi) - Technology Exploitation Agreements
Schedule 3.2(u)(ix) - Infringement
Schedule 3.2(u)(x) - Employee and Investors
Schedule 3.2(u)(xi) - Systems
Schedule 3.2(v) - Product and Service Warranties
Schedule 3.2(x) - Financial Statements
Schedule 3.2(y) - Liabilities
Schedule 3.2(z) - Banks Accounts
Schedule 3.2(bb) - Employees
Schedule 3.2(cc) - Employees Plans
Schedule 3.2(dd) - Insurance
Schedule 3.2(ff) - Suppliers
Schedule 3.2(hh)(iv) - Assessments
Schedule 4.1(d) - Holdco Shares
Schedule 7.1 - Changes made to Intellectual Property Assets
Schedule 9.1 - Coordinates of Escrow Parties and Minority Shareholders
ARTICLE 2
HEXAVISION SHARES AND PURCHASE PRICE
2.1 PURCHASE AND SALE OF HEXAVISION
Subject to the terms and conditions of this Agreement, each Vendor
hereby sells, assigns and transfers to Purchaser and Purchaser hereby purchases
from each Vendor all (but not less than all) of their respective shares in the
capital of Hexavision as set forth in Schedule 3.1(d), which shares, together
with the shares held by Holdco in the capital of Hexavision, constitute in the
aggregate all (but not less than all) of the issued and outstanding shares in
the capital of Hexavision (collectively, the "HEXAVISION SHARES ").
2.2 PURCHASE AND SALE OF HOLDCO
Subject to the terms and conditions of this Agreement, each Holdco
Vendor hereby sells, assigns and transfers to Purchaser and Purchaser hereby
purchases from each Holdco Vendor all (but not less than all) of their
respective shares in the capital of Holdco as set forth in Schedule 4.1(d),
which shares constitute in the aggregate all (but not less than all) of the
issued and outstanding shares in the capital of Holdco (collectively, the
"HOLDCO SHARES").
2.3 PURCHASE PRICE
Subject to Section 2.4 and Section 2.5, the aggregate purchase price
payable by Purchaser to Vendors and Holdco Vendors for the Hexavision Shares and
the Holdco Shares, respectively, shall be $7,757,797 (the "PURCHASE PRICE").
-10-
14
2.4 PAYMENT OF THE PURCHASE PRICE
Purchaser shall pay the Purchase Price to or to the order of Vendors and
Holdco Vendors by bank draft, certified cheque or wire transfer of immediately
available funds to accounts designated in writing by each Vendor and each Holdco
Vendor as follows:
(a) by remitting on the Closing Date to Vendors and Holdco Vendors
an aggregate of $5,085,145 in the proportions set out beside
each of their respective names in Schedule 2.4(a), the receipt
of which is hereby acknowledged by each Vendor and each Holdco
Vendor;
(b) subject to Section 2.6, $11,920 payable to the Minority
Shareholders listed in Schedule 2.4(b)(i), on the dates, and in
the amounts set forth beside their respective names, provided at
least 50% of the employees listed in Schedule 2.4(b)(ii) have
not resigned from Hexavision, Adept or Purchaser (or any of
their respective successors or assignees) (the "CONTINGENCY") on
the one year anniversary of the Closing Date (the "CONTINGENCY
DATE");
(c) subject to Sections 2.6 and 2.7 and provided the Contingency is
satisfied on the Contingency Date, by remitting to the Escrow
Agent on the Closing Date $1,582,4891 (the "CONTINGENT
Payment"), payable to Investors, Holdco Vendors and Xxxxx on the
dates, and in the amounts set out in Schedule 2.4(c)(i), the
whole pursuant to the terms and conditions of the escrow
agreement attached hereto as Schedule 2.4(c)(ii) (the
"INDEMNIFICATION ESCROW AGREEMENT");
(d) subject to Section 2.6 and provided the Contingency is satisfied
on the Contingency Date, by delivering on the Contingency Date
to the Minority Shareholders such number of Adept Shares as is
equal to (i) the amount set out beside each of the names of the
Minority Shareholders in Schedule 2.4(d), divided by (ii) the
Average Price (the "CONTINGENT SHARES") (and, in the event the
foregoing calculation results in a fractional share, the cash
equivalent thereof); and
(e) subject to Sections 2.6 and 2.7 and provided the Contingency is
satisfied on the Contingency Date, by delivering on the
Contingency Date to Investors, Holdco Vendors and Xxxxx such
number of Adept Shares as is equal to (i) the amount set out
beside each of their respective names in Schedule 2.4(e),
divided by (ii) the Average Price (collectively, the
"INDEMNIFYING VENDOR SHARES") (and, in the event the foregoing
calculation results in a fractional share, the cash equivalent
thereof).
------------------------
1 Less the appropriate portion of the Operational Amount calculated in
accordance with the program and worksheet referred to in the
Indemnification Escrow Agreement.
-11-
15
2.5 PAYMENT OF BONUSES TO INDEMNIFYING EMPLOYEES
At Closing, Hexavision and each of Xxxxx and St-Pierre and Adept and
Xxxxxx (Xxxxx, St-Pierre and Xxxxxx being hereinafter collectively referred to
as the "INDEMNIFYING EMPLOYEES") will enter into the Employment Agreements which
will provide, among other things, that each Indemnifying Employee will be
entitled to receive (collectively, the "BONUS PAYMENTS"):
(a) the signing bonuses (less applicable withholdings and mandatory
deductions) in the amounts set forth beside each of the names of
Indemnifying Employees in Schedule 2.5;
(b) subject to Sections 2.6 and 2.7 and provided the Contingency is
satisfied on the Contingency Date and, in the case of Xxxxxx and
St-Pierre, provided they are still employed by Hexavision, Adept
or Purchaser (or any of their respective successors or assigns),
the bonus payments set out beside each of the names of
Indemnifying Employees in the amounts and on the dates set out
in Schedule 2.5 (collectively, the "CONTINGENT BONUS PAYMENTS"),
which Contingent Bonus Payments(2) shall be remitted to the
Escrow Agent on the Closing Date and shall be dealt with and
paid to Indemnifying Employees (less applicable withholdings and
mandatory deductions) in accordance with the Indemnification
Escrow Agreement; and
(c) subject to Sections 2.6 and 2.7 and provided the Contingency is
satisfied on the Contingency Date and, in the case of Xxxxxx and
St-Pierre, provided they are still employed by Hexavision, Adept
or Purchaser (or any of their respective successors or assigns),
such number of Adept Shares as is equal to (i) the amount (less
applicable withholdings and mandatory deductions) set out beside
each of the names of Indemnifying Employees in Schedule 2.5,
divided by (ii) the Average Price (collectively, the
"INDEMNIFYING EMPLOYEE SHARES") (and, in the event the
calculation of Adept Shares issuable results in a fraction of a
share, the cash equivalent thereof).
2.6 ADJUSTMENT
In the event the Contingency is not fully satisfied on the Contingency
Date, the amounts payable pursuant to Section 2.4(b), 2.4(c) and 2.5(b) and the
amounts set out in Schedule 2.4(d), Schedule 2.4(e) and Schedule 2.5 used to
calculate the number of Adept Shares to be issued pursuant to Sections 2.4(d),
2.4(e) and 2.5(c) shall be reduced on the Contingency Date to amounts calculated
in accordance with Schedule 2.6.
------------------------
(2) Less the appropriate portion of the Operational Amount calculated in
accordance with the program and worksheet referred to in the
Indemnification Escrow Agreement.
-12-
16
2.7 INDEMNITY FUND
The Contingent Payment and the Contingent Bonus Payments remitted by
Purchaser to the Escrow Agent pursuant to Sections 2.4(c) and 2.5(b),
respectively (collectively with the Indemnity Share Value, the "INDEMNITY
FUND"), shall be held by Escrow Agent in order to secure the payment of any
Damages giving rise to indemnification in favor of Purchaser pursuant to Article
7, the whole in accordance with the terms and conditions of the Indemnification
Escrow Agreement. Purchaser shall also be entitled to compensate the amount of
any Damages giving rise to indemnification in favor of Purchaser pursuant to
Article 7 against the value represented by the Indemnifying Vendor Shares and
the Indemnifying Employee Shares ($1,214,337) (the "INDEMNITY SHARE VALUE").
Upon such compensation, the Indemnity Share Value shall be reduced by the amount
of the Damages giving rise to indemnification in favor of Purchaser pursuant to
Article 7 and the balance of the Indemnity Share Value, if any, shall be
re-allocated among the Escrow Parties in accordance with the program and
worksheet referred to in Indemnification Escrow Agreement for the purposes of
determining the number of Adept Shares issuable to them pursuant to Sections
2.4(e) and 2.5(c).
2.8 NO REGISTRATION UNDER SECURITIES ACT; SEC DOCUMENTS; ADEPT FINANCIAL
STATEMENTS
(a) Subject to Section2.8(b), the Adept Shares to be issued pursuant
to this Agreement will not be registered under the Securities
Act of 1933 of the United States, and the rules and regulations
thereunder, as amended (the "SECURITIES ACT"). Prior to the
Contingency Date, each holder of Adept Shares shall have
provided Adept such additional information regarding such
holder's financial and investment background, investment intent
and jurisdiction of domicile as Adept may reasonably request to
ensure the availability of an exemption from the registration
requirements of the Securities Act.
(b) Within 60 days after the Contingency Date, Adept shall file a
registration statement with the SEC to register the Adept Shares
to be issued pursuant to this Agreement and shall use all
commercially reasonable efforts to cause the same to be declared
effective by the SEC as promptly as practicable after such
filing. Adept shall prepare and promptly file with the SEC such
amendments and supplements to such registration statement and
the prospectus used in connection therewith as may be necessary
to keep such registration statement effective for a period of
not less than 90 days. Adept shall also (1) use all commercially
reasonable efforts to register or qualify the Adept Shares as
promptly as practicable under such other securities or blue sky
laws of such jurisdictions in the United States as any Escrow
Party or Minority Shareholder reasonably (in light of the
intended plan of distribution) requests and (2) use all
commercially reasonable efforts to cause all such Adept Shares
to be listed on each securities exchange on which similar
securities issued by Adept are then listed or quoted on any
inter-dealer quotation system on which similar securities issued
by Adept are then quoted.
(c) Notwithstanding the foregoing, Adept may defer the filing of a
registration statement required by this Section 2.8 for a period
not to exceed 180 days after the Contingency Date if at the time
of the proposed filing Adept is not able to use
-13-
17
Form S-3 or any successor form or is engaged in confidential
business activities or developments (such activities or
developments referred to herein as "PENDING MATTERS"),
disclosure of which may, in the good faith judgment of the Board
of Directors of Adept, materially and adversely affect Adept or
the successful conclusion of such Pending Matter. A deferral of
the filing of a registration statement pursuant to this Section
2.8(c) shall be lifted, and the requested registration statement
shall be filed forthwith, if the negotiations, other activities
or developments are publicly disclosed or terminated.
(d) All of the out-of-pocket expenses incurred in connection with
any registration of Adept Shares pursuant to this Agreement,
including, without limitation, all SEC, Nasdaq National Market
and U.S. blue sky registration and filing fees, printing
expenses, transfer agents' and registrars' fees, and the
reasonable fees and disbursements of Adept's outside counsel and
independent accountants shall be paid by Adept; provided,
however, that such counsel and accountants will not, at Adept's
expense, deliver any legal opinion or "comfort letter,"
respectively, to the Escrow Parties or Minority Shareholders or
any underwriter of the Adept Shares. All sales commissions,
legal fees, or other fees and expenses incurred by the Escrow
Parties and Minority Shareholders in connection with the sale of
Adept Shares pursuant to the registration statement shall be
paid by the Escrow Parties and Minority Shareholders.
(e) Prior to the filing of the registration statement, the Escrow
Parties and the Minority Shareholders shall have provided Adept
with such information as is reasonably requested in connection
with the filing of a registration statement and Adept and the
Minority Shareholders and Escrow Parties shall have entered into
a reciprocal indemnification agreement reasonably acceptable to
all of them and in such form and substance as is customary in
connection with the filing of a registration statement.
(f) Each Party (other than Purchaser and Adept) acknowledges that
Adept has made available to such Party a copy of its Annual
Report on Form 10-K for the fiscal year ended June 30, 1999, its
Quarterly Reports on Form 10-Q for the quarters ended October 2,
1999, January 1, 2000 and April 1, 2000 which Adept filed under
the Exchange Act with the Securities and Exchange Commission
(the "SEC DOCUMENTS"). The SEC Documents include all statements,
reports and documents required to be filed by Adept pursuant to
the Exchange Act and the Securities Act. As of their respective
filing dates, (i) none of the SEC Documents contained any untrue
statement of a material fact or omitted 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, except to the extent corrected
by a subsequently filed SEC Document and (ii) all SEC Documents
complied in all material respects with the Exchange Act and the
rules of the SEC promulgated thereunder. The financial
statements included in the SEC Documents fairly present the
consolidated financial condition, operating results and cash
flows of Adept and its subsidiaries at the dates and during the
periods indicated therein in accordance with U.S. GAAP
consistently applied
-14-
18
(subject,in the case of unaudited statements, to normal,
recurring year-end adjustments and additional footnote
disclosures, which, in either case, would not have a material
adverse effect on Adept). Adept has filed all reports that it is
required to file under the Exchange Act.
2.9 ESCROW PARTIES AND MINORITY SHAREHOLDERS REPRESENTATIONS
This Agreement is made with each Escrow Party and each Minority
Shareholder upon the understanding as a specific representation to Adept and
Purchaser by each Escrow Party and each Minority Shareholder that:
(a) he or it will acquire the Shares for his or its own account, not
as a nominee or agent, and not with a view to any distribution
or public offering thereof within the meaning of the Securities
Act, and he or it has no present intention of selling, granting
participation in, or otherwise distributing the same, but
subject nevertheless to any requirement of Law that the
disposition of its property shall at all times be within its
control;
(b) he or it is aware of and has investigated Adept's business,
management and financial condition, has received, and has been
furnished with such other materials and has been given access to
such other information about Adept as he or it has deemed
necessary or desirable to reach an informed and knowledgeable
decision to acquire the Shares;
(c) by reason of his or its business or financial experience, or the
business or financial experience of its professional advisor, he
or it has the capacity to protect his or its own interests in
connection with this transaction and is capable of evaluating
the merits and risks of its prospective investment in Adept. He
or it has the ability to bear the economic risk of the
investment pursuant to this Agreement, including a complete loss
of his or its investment in the Shares; and
(d) if other than an individual, it has not been organized or
materially reorganized for the purpose of investing in
securities of Adept , although such investment is consistent
with its purposes.
2.10 XXXXXX REPRESENTATIONS
This Agreement is made with Xxxxxx upon the understanding as a specific
representation to Purchaser and Adept by Xxxxxx that:
(a) Xxxxxx understands that the Adept Shares have not been
registered under the Securities Act by reason of reliance upon
certain exemptions therefrom, and that the reliance of Purchaser
and Adept on such exemptions is predicated upon, among other
things, the bona fide nature of investment intent as expressed
in Sections 2.9 and 2.10.
(b) Xxxxxx understands that the securities being purchased hereunder
are "restricted securities" within the meaning of Rule 144
promulgated under the
-15-
19
Securities Act; that such securities are not registered and must
be held indefinitely unless they are subsequently registered or
an exemption from such registration is available. Xxxxxx has
been advised or is aware of the provisions of Rule 144
promulgated under he Securities Act as in effect from time to
time, which permits limited resale of shares purchased in a
private placement subject to the satisfaction of certain
conditions, including, among other things: the availability of
certain current public information about Purchaser and Adept,
the resale occurring following the required holding period under
Rule 144 and the number of shares being sold during any
three-month period not exceeding specified limitations.
(c) Xxxxxx either (i) has a pre-existing business or personal
relationship with Adept or any of its officers, directors or
controlling persons, or (ii) by reason of Xxxxxx'x business or
financial experience or the business or financial experience of
Xxxxxx'x professional advisors who are unaffiliated with and who
are not compensated by Purchaser and Adept, directly or
indirectly, could be reasonably assumed to have the capacity to
evaluate the merits and risks of an investment in Purchaser and
Adept and to protect Xxxxxx'x own interests in connection with
this transaction.
2.11 STOCK RESTRICTIONS
In addition to any legend imposed by applicable state securities laws,
the certificates representing the Shares (other than Shares issued to Xxxxxx)
shall bear a restrictive legend (and stop transfer orders shall be placed
against the transfer thereof with Adept's transfer agent), stating substantially
as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND ARE SUBJECT TO RESTRICTIONS ON TRANSFER.
THEY MAY NOT BE SOLD, TRANSFERRED, ASSIGNED, OR HYPOTHECATED
EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S UNDER
THE SECURITIES ACT, PURSUANT TO REGISTRATION UNDER THE
SECURITIES ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION. HEDGING TRANSACTIONS INVOLVING THE SECURITIES
REPRESENTED BY THIS CERTIFICATE MAY NOT BE CONDUCTED UNLESS IN
COMPLIANCE WITH THE SECURITIES ACT.
THE ISSUER MAY REFUSE TO REGISTER ANY TRANSFER OF THE
SECURITIES NOT MADE IN ACCORDANCE WITH THE PROVISIONS OF
REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES
ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM REGISTRATION.
Such legend shall be removed by Adept upon delivery to it of an opinion
of counsel satisfactory to Adept in form and substance reasonably satisfactory
to Purchaser and Adept, that a registration statement under the Securities Act
is at the time in effect with respect to the
-16-
20
legended security or that such security can be freely transferred without such
registration statement being in effect.
Any certificate representing the Adept Shares issued to Xxxxxx shall be
endorsed with the following legend and any legend required by state securities
laws of the jurisdictions of Xxxxxx.
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AS AMENDED, OR REGISTERED OR QUALIFIED
UNDER THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION.
IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER
SUCH ACT AND SUCH LAWS, THESE SECURITIES MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF, EXCEPT PURSUANT TO
AN APPLICABLE EXEMPTION FROM THE REGISTRATION AND
QUALIFICATION REQUIREMENTS OF SUCH ACT AND SUCH LAWS OR UPON
OBTAINING AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY,
THAT SUCH DISPOSITION MAY BE MADE WITHOUT REGISTRATION OR
QUALIFICATION OF THE SECURITIES UNDER SUCH ACT AND SUCH LAWS."
Such legend shall be removed by Adept upon delivery to it of an opinion
of counsel satisfactory to Adept in form and substance satisfactory to Adept,
that a registration statement under the Securities Act is at the time in effect
with respect to the legended security or that such security can be freely
transferred without such registration statement being in effect.
The Shares issued to Vendors, Holdco Vendors and Indemnifying Employees
pursuant to Sections 2.4(d), 2.4(e) and 2.5(c), respectively, shall only be
resold in accordance with the provisions of Regulation S (Rule 901 through Rule
905) under the Securities Act, pursuant to registration under the Securities
Act, or pursuant to an available exemption from registration. Vendors, Holdco
Vendors and Indemnifying Employees agree not to engage in hedging transactions
with regard to the Shares they own unless in compliance with the Securities Act.
Adept shall not be required to register any transfer of Adept Shares
issued to Xxxxxx unless and until one of the following events shall have
occurred:
(a) Adept shall have received a statement of the circumstances
surrounding the transfer and, if requested by Adept, an opinion
of counsel, in form and substance reasonably acceptable to
Purchaser and Adept and its counsel, stating that the transfer
is exempt from registration under the Securities Act as then in
effect, and the Rules and Regulations of the Securities and
Exchange Commission thereunder, or
(b) the Adept Shares are transferred pursuant to a registration
statement which has been filed with the Security and Exchange
Commission and has become effective.
Promptly after delivery to Adept and its counsel of the statement or the
opinion described in clause (a) above, Adept either shall deliver to the
proposed transferor a statement to the effect that such statement or opinion is
not satisfactory in the reasonable opinion of its counsel or shall authorize
Adept's transfer agent to make the requested transfer.
-17-
21
The restrictions on transfer imposed by this Section 2.12 shall cease
and terminate as to the Adept Shares when (i) such securities shall have been
effectively registered under the Securities Act and sold by the holder thereof
in accordance with such registration, or (ii) an acceptable opinion of counsel
as described in subparagraph (a) above states that all future transfers of such
securities by the transferor or the contemplated transferee would be exempt from
registration under the Securities Act.
2.12 REPAYMENT OF LOANS
On the Closing Date Purchaser will cause Hexavision to pay for the
benefit of Holdco (i) Canadian $80,000 to Holdco Vendors in the proportions set
out in Schedule 2.12 in full payment of the loan made to Hexavision by Holdco,
provided the appropriate consent and waiver is obtained from GATIQ; and, (ii)
Canadian $450,000 to GATIQ in full repayment of the loan made to Hexavision by
GATIQ.
2.13 TERMINATION OF SHAREHOLDERS AGREEMENT
Each of Holdco Vendors hereby terminate the shareholders agreement dated
January 30, 1997 by and between themselves, Xxxxxxxx X. Xxxxxxxx and Holdco (the
"HOLDCO SHAREHOLDERS AGREEMENT") and hereby release and discharge Purchaser,
Adept, Hexavision and its Subsidiary and their respective directors,
shareholders and officers and successors and assigns (collectively, the
"RELEASED PARTIES") of and from any and all actions, causes of actions, suits,
claims and demands of any kind whatsoever, either at law or at equity which
Holdco Vendors and Xxxxxxxx X. Xxxxxxxx ever had, shall have or may have, or
which their respective heirs, executors, administrators, successors and assigns,
or any of them hereafter can, shall or may have, directly or directly, against
any of the Released Parties for or by reason of any cause matter or thing
whatsoever arising out of, under or pursuant to the Holdco Shareholders
Agreement.
Each of Investors hereby terminate the Shareholders Agreement and hereby
release and discharge the Released Parties of and from any and all actions,
causes of actions, suits, claims and demands of any kind whatsoever, either at
law or at equity, which Investors ever had, shall have or may have, or which
their respective heirs, executors, administrators, successors and assigns, or
any of them hereafter can, shall or may have, directly or directly, against any
of the Released Parties for or by reason of any cause matter or thing whatsoever
arising out of, under or pursuant to the Shareholders Agreement.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF ESCROW PARTIES;
AND MINORITY SHAREHOLDERS
3.1 INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF VENDORS AND XXXXXX
Subject to Article 7, each of Xxxxxx (but only with respect to Sections
3.1(b) and 3.1(c)) and each of the Vendors individually represents and warrants
as to himself or itself, as the case may be, as follows to Purchaser and Adept
and acknowledges and confirms that Purchaser and
-18-
22
Adept are relying upon such representations and warranties in connection with
the purchase by Purchaser of the Hexavision Shares and the Holdco Shares:
(a) INCORPORATION AND QUALIFICATION. To the extent Vendor is a
corporation, it is a corporation incorporated, organized and
existing under its jurisdiction of incorporation and has the
corporate power to own and operate its property, carry on its
business and enter into and perform its obligations under this
Agreement.
(b) VALIDITY OF AGREEMENT. The execution, delivery and performance
by him or it, as the case may be, of this Agreement and the
Escrow Agreements:
(i) to the extent that Vendor is a corporation, have been
duly authorized by all necessary corporate action on its
part;
(ii) do not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with, or allow any other Person to exercise any
rights under, any of the terms or provisions of any
contracts or instruments to which he or it is a party
or, to the extent Vendor is a corporation, its
constating documents or by-laws;
(iii) will not result in a breach of, or cause the termination
or revocation of, any Authorization held by him or it,
as the case may be, necessary to the ownership of his or
its Hexavision Shares or Holdco Shares, as the case may
be; and
(iv) will not result in the violation of any Law, except
where such violation would not have a material adverse
effect on the transactions contemplated by this
Agreement or the business, operations and assets of
Hexavision or its Subsidiary.
(c) EXECUTION AND BINDING OBLIGATION. This Agreement has been duly
executed and delivered by, and constitutes a legal, valid and
binding obligation of, enforceable against, him or it, as the
case may be, in accordance with its terms subject only to any
limitation under applicable Laws relating to (i) bankruptcy,
winding-up, insolvency, arrangement and other similar Laws of
general application affecting the enforcement of creditors'
rights, and (ii) the discretion that a court may exercise in the
granting of equitable remedies such as specific performance and
injunction.
(d) TITLE TO HEXAVISION SHARES. He or it, as the case may be, is the
sole registered and beneficial owner of the number and class of
shares set out beside his or its respective name in Schedule
3.1(d), with a good title thereto, free and clear of all Liens.
Such shares collectively constitute the Hexavision Shares. Upon
Closing, Purchaser will have good and valid title to such
Hexavision Shares, free and clear of all Liens.
-19-
23
(e) RESIDENCE OF VENDORS. He or it, as the case may be, is not a
non-resident of Canada within the meaning of the ITA.
(f) NOT A U.S. PERSON. He or it, as the case may be, is not a U.S.
Person and is not acquiring the securities for the account or
benefit of any U.S. Person.
3.2 SOLIDARY REPRESENTATIONS AND WARRANTIES OF ESCROW PARTIES
Subject to Article 7, Escrow Parties hereby solidarily (jointly and
severally) represent and warrant as follows to Purchaser and Adept and
acknowledges and confirms that Purchaser and Adept are relying upon such
representations and warranties in connection with the purchase by Purchaser of
the Hexavision Shares and the Holdco Shares:
(a) INCORPORATION AND QUALIFICATION. Each of Hexavision and its
Subsidiary is a corporation incorporated, organized and existing
under the Laws of its jurisdiction of incorporation and has the
corporate power to own and operate its property, carry on its
business as currently conducted and as proposed to be conducted
and enter into and perform its obligations under this Agreement.
Each of Hexavision and its Subsidiary is duly qualified,
licensed or registered to carry on business in the jurisdictions
listed in Schedule 3.2(a). The jurisdictions listed in Schedule
3.2(a). include all jurisdictions in which the nature of the
assets or the business of Hexavision and its Subsidiary, makes
such qualification necessary or where each of Hexavision and its
Subsidiary owns or leases any material assets or conducts any
material business.
(b) NO DEFAULT. Neither of Hexavision or its Subsidiary is in
breach, default or violation (and no event has occurred that
with notice or the lapse of time or both would constitute a
breach, default or violation) of any term, condition or
provision of (i) its constating documents or by-laws or (ii) any
order, writ, injunction, decree, law, statute, rule or
regulation applicable to Hexavision or its Subsidiary or
pursuant to which any of its assets or property may be affected.
(c) VALIDITY OF AGREEMENT. Except for the Consents disclosed in
Schedule 3.2(c), the execution, delivery and performance by
Hexavision, Escrow Parties and Minority Shareholders of this
Agreement and the Indemnification Escrow Agreement:
(i) do not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with, or allow any other Person to exercise any
rights under, any of the terms or provisions of its
constating documents or by-laws or any Contracts or
instruments to which any of Hexavision or its Subsidiary
is a party or pursuant to which any of its assets or
property may be affected; and
(ii) will not result in a breach of, or cause the termination
or revocation of, any Authorization necessary to the
ownership or the operation of the business of Hexavision
or its Subsidiary.
-20-
24
(d) EXECUTION AND BINDING OBLIGATION. This Agreement has been duly
executed and delivered by, and constitutes a legal, valid and
binding obligation of, enforceable against Hexavision in
accordance with its terms subject only to any limitation under
applicable Laws relating to (i) bankruptcy, winding-up,
insolvency, arrangement and other similar Laws of general
application affecting the enforcement of creditors' rights, and
(ii) the discretion that a court may exercise in the granting of
equitable remedies such as specific performance and injunction.
(e) REQUIRED AUTHORIZATIONS. There is no requirement to make any
filing with, give any notice to, or obtain any Authorization of,
any Governmental Entity or Person as a condition to the lawful
completion of the transactions contemplated by this Agreement
without loss of benefits under any Contracts or instruments to
which Hexavision or its Subsidiary is a party or pursuant to
which any of its assets or property may be affected, except for
the filings, notifications and Authorizations described in
Schedule 3.2(c) or that relate solely to the identity of
Purchaser or the nature of the business carried on by Purchaser.
(f) AUTHORIZED AND ISSUED CAPITAL. The authorized capital of
Hexavision consists of an unlimited number of Class X, X, X, X,
X, X, X, X and I shares, of which 6,261,451 class A shares and
135,000 class B shares (and no more) have been duly issued and
are outstanding as fully paid and non-assessable; such shares
constitute all of the Hexavision Shares. All of the Hexavision
Shares have been issued in compliance with all applicable Laws
including, without limitation, applicable securities Laws.
The authorized capital of Subsidiary consists of an unlimited
number of common shares, of which 1500 common shares and (and no
more) have been duly issued and are outstanding as fully paid
and non-assessable; such shares constitute all of the issued and
outstanding shares in the capital of the Subsidiary. All of the
issued and outstanding shares in the capital of the Subsidiary
have been issued in compliance with all applicable Laws
including, without limitation, applicable securities Laws.
Except as set forth in Schedule 3.2(f), there are no outstanding
options, securities, loans or notes convertible or exchangeable
for any shares or other securities of Hexavision or its
Subsidiary.
(g) TITLE TO SUBSIDIARY SHARES. Hexavision is the registered and
beneficial owner of 1500 common shares in the capital of the
Subsidiary, with good title thereto, free and clear of all
Liens. Such shares constitute all of the issued and outstanding
shares of the Subsidiary.
(h) NO SUBSIDIARIES. Other than Subsidiary, Hexavision holds no
shares or other ownership, equity or proprietary interests (or
option for any of the foregoing) in any other Person. Subsidiary
holds no shares or other ownership, equity or proprietary
interests (or option for any of the foregoing) in any other
Person.
-21-
25
(i) NO OTHER AGREEMENTS TO PURCHASE. Except as set forth in Schedule
3.2(f) and except for Purchaser's right under this Agreement, no
Person (including, without limitation the employees and
shareholders of Hexavision or its Subsidiary) has any written or
oral agreement, option or warrant or any right or privilege
(whether by Law, pre-emptive or contractual) capable of becoming
such for (i) the purchase or acquisition from Vendors of any of
the Hexavision Shares, or (ii) the purchase, subscription,
allotment or issuance of any of the unissued shares or other
securities of Hexavision or its Subsidiary.
(j) CORPORATE RECORDS. The Corporate Records are complete and
accurate in all material respects, and contain copies of all of
the articles, by-laws and resolutions adopted by the
shareholders and directors of Hexavision and its Subsidiary
since the date of its incorporation, all of which have been duly
passed. Other than the Shareholders' Agreement, Hexavision has
never been subject to, or affected by, any shareholders
agreement.
(k) CONDUCT OF BUSINESS IN ORDINARY COURSE. Except as disclosed in
Schedule 3.2(k), since January 31, 2000, each of Hexavision and
its Subsidiary has carried on its business in the Ordinary
Course and, without limiting the generality of the foregoing,
neither of Hexavision or its Subsidiary has:
(i) made or assumed any commitment, obligation or liability
which is outside the Ordinary Course;
(ii) transferred to (including by license) any Person any
rights to the Intellectual Property Assets, except in
connection with sales of Hexavision's or its
Subsidiary's products or services in the Ordinary
Course;
(iii) terminated, entered into, amended or otherwise modified
any agreements pursuant to which any Person is granted
marketing, distribution or similar rights of any type or
scope or any third party royalty rights with respect to
any products of Hexavision or its Subsidiary, or entered
into or amended any strategic alliance, license or
sub-license agreement, or joint development agreement;
(iv) terminated, entered into, amended or otherwise modified
in any material respect any contract, agreement or
commitment, including any Material Contract;
(v) sold or otherwise in any way alienated or disposed of
any of its assets other than in the Ordinary Course;
(vi) split, combined or reclassified any of its shares, or
issued, granted, redeemed, retired, repurchased or
otherwise acquired shares in its capital or any options,
warrants, rights, bonds, debentures, notes or other
corporate security or research declared, made or paid
any dividend or made any other distributions or
appropriations of profits of capital;
-22-
26
(vii) discharged any secured or unsecured obligation or
liability (whether accrued, absolute, contingent or
otherwise), other than obligations and liabilities
discharged in the Ordinary Course;
(viii) waived or cancelled any material claim, or account
receivable, trade account, or right outside the Ordinary
Course or made any gift;
(ix) terminated the employment of any manager or officer or
granted any severance or termination pay or similar
obligation to any member, manager, officer or any other
employee, except payments made pursuant to written
agreements or other legally binding commitments
disclosed to Purchaser in writing and in effect on the
date hereof;
(x) made any change in the rate or form of compensation or
remuneration or option payable or to become payable to
any of its shareholders, directors, officers, employees
or agents which is outside the Ordinary Course;
(xi) made any change in its accounting principles and
practices as utilized in the preparation of the
Financial Statements and the Interim Financial
Statements or granted to any customer any special
allowance or discount, or changed its pricing, credit or
payment policies, other than in the Ordinary Course;
(xii) made or assumed any commitment, obligation or liability
or made any individual capital expenditure in excess of
$10,000 or $25,000 in the aggregate;
(xiii) made any loan or advance, or assumed, guaranteed or
otherwise became liable with respect to the liabilities
or obligations of any Person;
(xiv) modified its constating instruments, by-laws or capital
structure;
(xv) removed any auditor;
(xvi) purchased or otherwise acquired any corporate security
or proprietary, participatory or profit interest in any
Person;
(xvii) incurred any indebtedness other than to trade creditors
in the Ordinary Course;
(xviii) settled any litigation or claim requiring payment by
Hexavision or its Subsidiary in excess of $10,000
individually; or
(xix) authorized, agreed or otherwise committed to any of the
foregoing.
(l) NO MATERIAL ADVERSE CHANGE. Since January 31, 2000, there has
not been any material adverse change in the affairs, operations,
business, assets, properties, prospects or condition of
Hexavision or its Subsidiary.
-23-
27
(m) COMPLIANCE WITH LAWS. Each of Hexavision and its Subsidiary is
conducting its business in compliance with all applicable Laws,
including, Environmental Laws, other than acts of non-compliance
which, in the aggregate, are not material.
(n) AUTHORIZATIONS. Each of Hexavision and its Subsidiary owns,
holds, possesses or lawfully uses in the operation of its
business, all Authorizations which are necessary for it to
conduct its business, as presently or previously conducted or as
currently contemplated to be conducted or for the ownership and
use of its assets in compliance with all applicable Laws,
including, Environmental Laws. Each Authorization is valid,
subsisting and in good standing, and neither of Hexavision or
its Subsidiary is in default or in breach of any Authorizations
and, to the knowledge of each of Hexavision and the Escrow
Parties, no proceeding is pending or threatened to revoke or
limit any Authorizations.
(o) TITLE TO THE ASSETS. Except as set forth in Schedule 3.2(o),
each of Hexavision and its Subsidiary owns (with good title) all
of the properties and assets (whether real, personal or mixed
and whether tangible or intangible) that it purports to own
including all the properties and assets reflected as being owned
by each of Hexavision and its Subsidiary in the financial Books
and Records. Each of Hexavision and its Subsidiary has legal and
beneficial ownership of such assets free and clear of all Liens.
(p) CONDITION OF TANGIBLE ASSETS. The equipment and tangible
personal property of Hexavision and its Subsidiary are in good
operating condition and repair having regard to their use and
age and are adequate and suitable for the uses to which they are
being put. None of such equipment and tangible personal property
is in need of maintenance or repairs, except for normal
maintenance.
(q) NO OWNED PROPERTY. Except as set forth in Schedule 3.2(q),
neither of Hexavision or its Subsidiary is the owner or lessee
of, or subject to any agreement or option to own or lease, any
buildings, plants, structures, vehicles or real property or any
interest in any buildings, plants, structures, vehicles or real
property, other than the Leased Property.
(r) LEASE. Except as set forth in Schedule 3.2(q), neither of
Hexavision or its Subsidiary is a party to, or under any
agreement to become a party to, any lease with respect to real
property other than the Lease. The Lease is in good standing and
is in full force and effect without amendment. With respect to
the Lease (i) all rents and additional rents have been paid,
(ii) no waiver, indulgence or postponement of the lessee's
obligations has been granted by the lessor and there exists no
event of default thereunder.
-24-
28
(s) MATERIAL CONTRACTS. Except for the Contracts described in
Schedule 3.2(s) (collectively, the "MATERIAL CONTRACTS"), the
Lease, the Contracts referred to in Section 3.2(u), the Employee
Plans, the insurance policies set out in Schedule 3.2(dd) and
the Contracts listed in Schedule 3.2(bb), neither of Hexavision
or its Subsidiary is a party to or bound by:
(i) any distributor, sales, advertising, agency or
manufacturer's representative Contract;
(ii) any continuing Contract for the purchase of materials,
supplies, equipment or services involving in the case of
any such Contract more than $10,000 over the life of the
Contract;
(iii) any Contract that expires or that may be renewed at the
option of any Person other than Hexavision or its
Subsidiary, as the case may be, so as to expire more
than one year after the date of this Agreement;
(iv) any trust indenture, mortgage, promissory note, loan
agreement or other Contract for the borrowing of money,
any currency exchange, commodities or other hedging
arrangement or any leasing transaction of the type
required to be capitalized in accordance with GAAP;
(v) any Contract for capital expenditures in excess of
$10,000 in the aggregate;
(vi) any confidentiality, secrecy or non-disclosure Contract
or any Contract limiting the freedom of Hexavision or
its Subsidiary to engage in any line of business,
compete with any other Person, operate its assets at
maximum production capacity or otherwise conduct its
business;
(vii) any Contract pursuant to which Hexavision or its
Subsidiary is a lessor of any machinery, equipment,
motor vehicles, office furniture, fixtures or other
personal property;
(viii) any Contract with any Person with whom Hexavision or its
Subsidiary, or any of Vendors does not deal at arm's
length within the meaning of the Income Tax Act
(Canada);
(ix) any agreement of guarantee, support, indemnification,
assumption or endorsement of, or any similar commitment
with respect to, the obligations, liabilities (whether
accrued, absolute, contingent or otherwise) or
indebtedness of any other Person;
(x) any Contract involving or relating to the Intellectual
Property Assets of Hexavision; or
(xi) any other Contract made out of the Ordinary Course.
-25-
29
(t) NO BREACH OF MATERIAL CONTRACTS. Except as set forth in Schedule
3.2(t), each of Hexavision and its Subsidiary has performed all
of the obligations required to be performed by it and is
entitled to all benefits under, and is not alleged to be in
default of any Material Contract to which it is a party. Each of
the Material Contracts is in full force and effect, unamended,
and there exists no default or event of default or event,
occurrence, condition or act (including the purchase of the
Hexavision Shares) which, with the giving of notice, the lapse
of time or the happening of any other event or condition, would
become a default or event of default under any Material
Contract. True, correct and complete copies of all Material
Contracts have been delivered to Purchaser.
(u) INTELLECTUAL PROPERTY.
(i) "OWNED MARKS". Schedule 3.2(u)(i) sets forth an accurate
and complete list of all registered Marks, pending
applications for registration of any Marks and material
unregistered Marks, in each case owned by Hexavision and
its Subsidiary (collectively, "OWNED MARKS"). Except as
may be set forth in Schedule 3.2(u)(i):
(a) neither of Hexavision or its Subsidiary has
received any notice or claim (whether written or
oral) challenging Hexavision's or its
Subsidiary's exclusive and complete ownership of
the Owned Marks or suggesting that any other
Person has any claim of legal or beneficial
ownership or other claim or interest with
respect thereto;
(b) neither of Hexavision or its Subsidiary has
received any notice or claim (whether written or
oral) challenging the validity or enforceability
of the Owned Marks;
(c) neither of Hexavision or its Subsidiary has
granted to any Person any right, license or
permission to use any of the Owned Marks; and
(d) no Owned Marks has been or is now involved in
any opposition or cancellation proceeding and,
to the knowledge of Escrow Parties, no such
action is threatened with respect to any of the
Owned Marks.
(ii) NO PATENTS. Other than the Patent Rights, neither of Hexavision
nor Subsidiary owns or licenses any Patents.
(iii) OWNED PATENT RIGHTS. Schedule 3.2(u)(iii) contains a complete
and correct list and summary description of all Patent Rights
owned by each of Hexavision and its Subsidiary (collectively,
"OWNED PATENT RIGHTS"), indicating for each (to the extent
applicable) the applicable jurisdiction, registration or
application number and date issued (or date filed) and a
-26-
30
summary of the claims to which such Owned Patent Rights relates.
Except as may be set forth on Schedule 3.2(u)(iii):
(a) to the knowledge of Escrow Parties, each of Hexavision
and its Subsidiary is the sole owner of all right, title
and interest in and to all of their respective Owned
Patent Rights, in each case free and clear of any and
all Liens, covenants, conditions and restrictions or
other adverse claims or interests of any kind or nature,
and neither of Hexavision or its Subsidiary has received
any notice or claim (whether written or oral)
challenging Hexavision's or its Subsidiary's complete
and exclusive ownership of the Owned Patent Rights or
suggesting that any other Person has any claim of legal
or beneficial ownership with respect thereto;
(b) there is no claim challenging or questioning the
validity or enforceability of any of the Owned Patent
Rights or, to the knowledge of Escrow Parties, any
threat or other indication of an intention on the part
of any Person to bring a claim that any Owned Patent
Rights is invalid, is unenforceable or has been misused;
(c) to the knowledge of Escrow Parties, the Owned Patent
Rights are legally valid and enforceable;
(d) the inventions disclosed in the Owned Patent Rights may
be practised by Hexavision and its Subsidiary without
infringing any other patents owned by any Person;
(e) each of Hexavision and its Subsidiary has taken the
steps set out in Schedule 3.2(u)(iii)(e) to protect
their respective rights in and to the Owned Patent
Rights;
(f) neither of Hexavision or its Subsidiary has granted to
any other Person any right, license or permission to
practice any of the Owned Patent Rights;
(g) to the knowledge of Escrow Parties, all of the Owned
Patent Rights are currently in compliance with legal
requirements (including payment of filing, examination,
and maintenance fees and proofs of working or use);
(h) to the knowledge of Escrow Parties, all maintenance
fees, annuities, and the like due on the Owned Patent
Rights have been timely paid;
(i) no other Person's activities, technology, products or
operations have infringed or are infringing in any
material respect on any of the Owned Patent Rights.
-27-
31
(iv) OWNED COPYRIGHTS. There are no registered Copyrights (whether
registered with the Canadian Intellectual Property Office or in
any foreign jurisdiction) owned by either of Hexavision or its
Subsidiary and no pending applications for registration of
Copyrights filed by Hexavision or its Subsidiary anywhere in the
world. Schedule 3.2(u)(iv) sets forth a list of all material
Copyrights, including but not limited to Software, on which
either of Hexavision or its Subsidiary owns copyright
(collectively the "OWNED COPYRIGHT"). Except as may be set forth
on Schedule 3.2(u)(iv):
(a) each of Hexavision and its Subsidiary is the sole owner
of all rights, title and interest in and to all of their
respective Owned Copyright, in each case free and clear
of all Liens, covenants, conditions and restrictions or
other adverse claims or interest of any kind or nature,
and neither of Hexavision or its Subsidiary has received
any notice of claim challenging Hexavision's or its
Subsidiary's complete and exclusive ownership of the
Owned Copyright or suggesting that any other Person has
any claim of legal or beneficial ownership with respect
thereto;
(b) except for each of the employees of Hexavision and the
other persons listed in Schedule 3.2(u)(iv)(b), each of
Hexavision and its Subsidiary has obtained, in writing,
appropriate waivers of moral rights in their favor and
its successors and assigns as well as copyright
assignments in writing, where necessary, from all
Persons whose copyrightable work has been incorporated,
in whole or in part, to any Owned Copyright;
(c) there is no claim challenging or questioning the
validity or enforceability of any of the Owned Copyright
or, to the knowledge of Escrow Parties, any threat or
other indication of an intention on the part of any
Person to bring a claim that any Owned Copyright is
invalid, is unenforceable or is infringing on any
Person's rights;
(d) neither of Hexavision or its Subsidiary has granted to
any other Person any right, license or permission to use
any of the Owned Copyright; and
(e) no other Person's activities, products or operations
have infringed or are infringing in any material respect
on any of the Owned Copyright.
(v) AGREEMENTS IN RESPECT OF LICENSED TECHNOLOGY. Schedule
3.2(u)(v), sets forth a complete and accurate list of all
license agreements granting to Hexavision and/or its Subsidiary
any material right to use or practice any rights under any
Intellectual Property Asset other than off-the-shelf desktop
applications available on reasonable terms through commercial
-28-
32
distributors or in consumer retail stores for a license fee of
no more than $5,000 but including all such agreements that are
otherwise material to Hexavision and/or its Subsidiary
(collectively, the "LICENSED TECHNOLOGY AGREEMENTS"), including
for each the title and the parties thereto. Each of Hexavision
and its Subsidiary owns or possesses adequate licenses or other
rights to use all of their respective Intellectual Property
Assets that are licensed from third parties. Schedule 3.2(u)(v)
contains a complete and accurate list of any royalty obligations
or other volume or milestone-based payment obligations of
Hexavision and/or its Subsidiary under any Licensed Technology
Agreement. Except as may be set forth on Schedule 3.2(u)(v):
(a) no royalties, fees, honoraria or other payments are
payable by Hexavision or its Subsidiary to any Person by
reason of the ownership, use, sale, licensing,
distribution or other exploitation of any Software or
Owned Copyright;
(b) all Licensed Technology Agreements are in full force and
effect, and neither of Hexavision or its Subsidiary is
in material breach thereof or aware of any claim or
information to the contrary;
(c) there are no outstanding and, to the knowledge of Escrow
Parties, no threatened disputes or disagreements with
respect to any Licensed Technology Agreement;
(d) the expiration dates of all Licensed Technology
Agreements are sufficiently distant from the date hereof
that no potential impairment of the value of any of
Hexavision's or its Subsidiary's products could
reasonably be imputed by virtue of the non-renewal of
the term of any Licensed Technology Agreement;
(e) the rights licensed under each Licensed Technology
Agreement will be exercisable by Hexavision or its
Subsidiary, as the case may be, on and after the Closing
to the same extent as exercisable by Hexavision or its
Subsidiary, as the case may be, prior to the Closing
(subject to any applicable consent requirement);
(f) the Licensed Technology Agreements together expressly
confer on Hexavision or its Subsidiary, as applicable,
valid and enforceable rights under or in respect of all
of the Intellectual Property Rights that are not owned
exclusively by Hexavision or its Subsidiary and that are
used or practised in Hexavision's and its Subsidiary's
business (collectively, the "LICENSED INTELLECTUAL
PROPERTY"); and
(g) neither the execution and delivery of this Agreement,
nor the consummation of the transactions contemplated
hereby, will conflict with or result in a breach of any
of the terms, conditions or provisions of, or constitute
a default under, or result in the
-29-
33
impairment of any rights under, any Licensed Technology
Agreement.
(vi) AGREEMENTS INVOLVING DISTRIBUTION OR OTHER RIGHTS GRANTED TO
THIRD PARTIES. Schedule 3.2(u)(vi) sets forth the text of the
standard provisions included in Hexavision's and its
Subsidiary's standard product development agreements regarding
the grant by Hexavision or its Subsidiary to any Person of any
right to distribute, develop, prepare derivative works based on,
support or maintain or otherwise commercially exploit any
content, Software or technology of Hexavision and its Subsidiary
used in connection with Hexavision's or its Subsidiary's
business, or any license by Hexavision and its Subsidiary of any
rights with respect to any Intellectual Property Assets,
including any value-added reseller agreements, exclusive and
non-exclusive license agreements, joint development or marketing
agreements, and strategic alliance agreements (collectively,
"TECHNOLOGY EXPLOITATION AGREEMENTS").
(vii) Schedule 3.2(u)(vi) also contains a complete, accurate and
specific list of all Technology Exploitation Agreements that
deviate from the standard provision described in Section
3.2(u)(vi). Except as may be set forth in Schedule 3.2(u)(vi):
(a) all Technology Exploitation Agreements are in full force
and effect and Hexavision and its Subsidiary, and, to
the knowledge of Escrow Parties, any other party
thereto, is not in breach thereof, nor is it aware of
any claim or information to the contrary;
(b) there are no outstanding and, to the knowledge of Escrow
Parties, no threatened disputes or disagreements with
respect to any Technology Exploitation Agreement; and
(c) neither the execution and delivery of this Agreement,
nor the consummation of the transaction contemplated
hereby, will conflict with or result in a breach of (or
adversely impact Hexavision's or its Subsidiary's rights
under) any of the terms, conditions or provisions of, or
constitute a default under any Technology Exploitation
Agreement.
(VIII) SUFFICIENCY OF OWNED AND LICENSED INTELLECTUAL PROPERTY. The
Owned Marks, the Owned Patent Rights and to the knowledge of
Escrow Parties the Owned Copyright, the Licensed Intellectual
Property and the Trade Secrets constitute all of the
Intellectual Property Rights necessary for the conduct of
Hexavision's and its Subsidiary's business as presently
conducted by Hexavision and its Subsidiary, and constitute all
of the Intellectual Property Rights necessary to operate
Hexavision's and its Subsidiary's business after the Closing in
substantially the same manner
-30-
34
as the business heretofore has been operated by Hexavision and
its Subsidiary.
(ix) INFRINGEMENT. Except as may be set forth on Schedule 3.2(u)(ix),
neither of Hexavision or its Subsidiary is, and neither of
Hexavision or its Subsidiary has been a party to any proceeding,
nor, to the knowledge of Escrow Parties, has any proceeding been
threatened, that involves or involved a claim of infringement
misappropriation or other wrongful use or exploitation, either
(i) by Hexavision or its Subsidiary against any other Person or
(ii) by any Person against Hexavision or its Subsidiary of any
Intellectual Property Asset or of the Intellectual Property
Right used or exploited by Hexavision or its Subsidiary in the
conduct of their business, nor, to the knowledge of Escrow
Parties, is there any reasonable basis therefor. Except as may
be set forth in Schedule 3.2(u)(ix), the use, practice or other
exploitation of (A) any of the Owned Marks, (B) any of the Owned
Patent Rights, (C) any of the Owned Copyrights, (D) the subject
matter of any other work of authorship fixed in a tangible
medium that is used, copied, modified, displayed or distributed
in connection with the conduct by Hexavision and its Subsidiary
of their business, including any Software and, (E) any of the
Licensed Intellectual Property, do not conflict with, infringe
upon, violate or result in a misappropriation of, any patent,
copyright, trade secret or other Intellectual Property Right or
other right of any Person, nor is any of the foregoing subject
to any outstanding order, judgement, decree, stipulation or
agreement restricting the use thereof by Hexavision and its
Subsidiary or, in the case of any Intellectual Property Asset
licensed to Hexavision and its Subsidiary, restricting the sale,
transfer, assignment or licensing thereof by Hexavision and its
Subsidiary to any Person. Except as may be set forth in Schedule
3.2(u)(ix), Hexavision and its Subsidiary have the exclusive
right to bring actions against any Person that is infringing any
Intellectual Property Assets other than Licensed Intellectual
Property and to retain for itself any damages recovered in any
such action.
(x) EMPLOYEE AGREEMENTS. Except as set forth on Schedule 3.2(u)(x),
all current and former employees and consultants of Hexavision
and its Subsidiary whose duties or responsibilities relate to
Hexavision's and/or its Subsidiary's business have entered into
confidentiality, invention assignment and proprietary
information agreements with Hexavision and/or its Subsidiary in
the form provided to Purchaser. To the knowledge of Escrow
Parties, no employee or consultant of Hexavision and/or its
Subsidiary's whose duties or responsibilities relate to
Hexavision's and/or its Subsidiary's business is obligated under
any agreement (including licenses, covenants or commitments of
any nature) or subject to any judgment, decree or order of any
court or administrative agency, or any other restriction that
would interfere with the use of its, his or her best efforts to
carry out its, his or her duties for Hexavision or
-31-
35
its Subsidiary or to promote the interests of Hexavision or its
Subsidiary or that would conflict with Hexavision's and its
Subsidiary's business. The carrying on of Hexavision's and its
Subsidiary's business by such employees and contractors of
Hexavision and its Subsidiary will not, to the knowledge of
Escrow Parties, conflict with or result in a breach of the
terms, conditions or provisions of, or constitute a default
under, any contract, covenant or instrument under which any of
such employees or consultants or Hexavision and its Subsidiary
is now obligated. Except as set forth on Schedule 3.2(u)(x), to
the knowledge of Escrow Parties, it will not be necessary to
utilize any inventions or any other intellectual property of any
employees of or consultants to Hexavision or its Subsidiary (or
Person Hexavision or its Subsidiary currently intends to hire)
acquired prior to their employment by Hexavision or its
Subsidiary in order to carry on the business as presently
conducted by Hexavision and its Subsidiary. At no time during
the conception of or reduction to practice of any Intellectual
Property Right owned by Hexavision and/or its Subsidiary was any
developer, inventor or other contributor to such Intellectual
Property Right operating under any grants from any Governmental
Entity or university or private source, performing research
sponsored by any Governmental Entity or agency or private source
or subject to any employment agreement or invention assignment
or nondisclosure agreement or other obligation with any third
party that could adversely affect Hexavision's and its
Subsidiary's rights in such Intellectual Property Rights.
Schedule 3.2(u)(x), lists each present and past employee,
independent contractor and consultant who participated in a
material way in the creation or development of any other
material Intellectual Property Asset, indicating, in the case of
any such employee, whether such employee is a present or past
employee. Without limiting the generality of the foregoing,
Schedule 3.2(u)(x), specifically identifies each inventor
involved in any Owned Patent Rights (either individually or
jointly with others), and indicates whether such inventor is a
current employee of Hexavision or its Subsidiary and, if not a
current employee of Hexavision or its Subsidiary, the
relationship of such inventor to Hexavision or its Subsidiary at
the time the respective invention was made and the present
relationship, if any, of such inventor with Hexavision or its
Subsidiary.
(xi) DISABLING CODE AND CONTAMINANTS. Each of Hexavision and its
Subsidiary has taken reasonable steps and implemented reasonable
procedures to ensure that its internal computer systems used in
connection with Hexavision's and its Subsidiary's business
(consisting of hardware, software, databases or embedded control
systems, "SYSTEMS") are free from any disabling codes or
instructions and any virus or other intentionally created,
undocumented, contaminant that may, or may be used to, access,
modify, delete, damage or disable any of the Systems or that
might result in damage thereto. Each of Hexavision and its
-32-
36
Subsidiary has taken the steps set out in Schedule 3.2(u)(xi),
to safeguard its Systems and restrict unauthorized access
thereto.
(xii) YEAR 2000.
(a) The current versions of the Software (and Software
currently in development) and all other Intellectual
Property Rights may be used after December 31, 1999, so
that such Software and Intellectual Property Assets will
operate after such time period without error caused by
date data that represents or references different
centuries or more than one century.
(b) Purchaser is not reasonably likely to incur expenses
arising from or relating to the failure of any of
Hexavision's or its Subsidiary's Systems or any of the
Software as a result of the advent of the year 2000, the
advent of the twenty-first century or the transition
from the twentieth century through the year 2000.
(v) PRODUCT AND SERVICE WARRANTIES. Schedule 3.2(v), sets forth
complete and accurate copies of the written warranties and
guaranties by Hexavision and its Subsidiary currently in effect
with respect to their products and services and a summary of any
oral warranties. There have not been any material deviations
from such warranties and guaranties, and neither Hexavision, its
Subsidiary, nor any of their salesmen, employees, distributors
and agents is authorized to undertake obligations to any
customer or to other third parties in excess of such warranties
or guaranties.
(w) BOOKS AND RECORDS. All accounting and financial Books and
Records have been fully, properly and accurately kept and
completed in all material respects. The Books and Records and
other data and information are not recorded, stored, maintained,
operated or otherwise wholly or partly dependent upon or held by
any means (including any electronic, mechanical or photographic
process, whether computerized or not) which are not available to
Hexavision and its Subsidiary in the Ordinary Course.
(x) FINANCIAL STATEMENTS. The Financial Statements and the Interim
Financial Statements have been prepared in accordance with GAAP
applied on a basis consistent with those of previous fiscal
years and each fairly, accurately and completely discloses in
all material respects (i) the assets, liabilities and
obligations (whether accrued, contingent, absolute or
otherwise), income, losses, retained earnings, reserves and
financial position of Hexavision and its Subsidiary, (ii) the
results of operations of Hexavision and its Subsidiary, and
(iii) the changes in the financial position of Hexavision and
its Subsidiary all as at the dates and for the periods therein
specified.
True, correct and complete copies of the Financial Statements
and the Interim Financial Statements are attached as Schedule
3.2(x).
-33-
37
(y) NO LIABILITIES. Except as disclosed in this Agreement and
Schedule 3.2(y) or reflected or reserved against in the balance
sheet forming part of the Interim Financial Statements, neither
of Hexavision or its Subsidiary has any liabilities or
obligations of any nature (whether absolute, accrued, contingent
or otherwise) except for current liabilities incurred in the
Ordinary Course since January 31, 2000.
(z) BANK ACCOUNTS AND POWERS OF ATTORNEY. Schedule 3.2(z) is a
correct and complete list showing the name of each bank in which
Hexavision and its Subsidiary has an account or safety deposit
box and the names of all Persons authorized to draw on the
account or to have access to the safety deposit box, and the
names of all Persons holding powers of attorney from Hexavision
and its Subsidiary. Copies of the powers of attorney have been
provided to Purchaser.
(aa) ENVIRONMENTAL MATTERS.
(i) neither of Hexavision or its Subsidiary ever
transported, removed or disposed of any waste to a
location outside of Canada;
(ii) to the knowledge of Escrow Parties, there are no
contaminants located in the ground or in groundwater
under the Leased Property caused by the operations of
Hexavision or its Subsidiary; and
(iii) neither of Hexavision or its Subsidiary has been
required by any Governmental Entity to (i) alter the
Leased Property in a material way in order to be in
compliance with Environmental Laws, or (ii) perform any
environmental closure, decommissioning, rehabilitation,
restoration or post-remedial investigations, on, about,
or in connection with any real property.
Schedule 3.2(aa) lists all reports and documents relating to the
environmental matters affecting Hexavision, its Subsidiary and
the Leased Property which are in the possession or under the
control of Hexavision or its Subsidiary and each of Hexavision
and the Escrow Parties. Copies of all such reports and documents
have been provided to Purchaser. To the knowledge of Escrow
Parties, there are no other reports or documents relating to
environmental matters affecting Hexavision, its Subsidiary or
the Leased Property which have not been made available to
Purchaser whether by reason of confidentiality restrictions or
otherwise.
(bb) EMPLOYEES. Except as set forth in Schedule 3.2(bb):
(i) there is no collective agreement in force with respect
to the employees of Hexavision or its Subsidiary, no
collective agreement is currently being negotiated by
Hexavision or its Subsidiary, no union or employee
bargaining agent holds bargaining rights with respect to
any employees of Hexavision or of its Subsidiary, and
there are no current or, to the
-34-
38
knowledge of Escrow Parties, threatened attempts to
organize or establish any trade union or employee
association with respect to Hexavision or its
Subsidiary; and
(ii) all amounts due and owing or accrued due but not yet
owing for all salary, wages, bonuses, commissions,
vacation with pay, pension benefits or other employee
benefits have been paid or if accrued are reflected in
the Books and Records.
Schedule 3.2(bb) contains a correct and complete list of each
employee and consultant of Hexavision and its Subsidiary whether
actively at work or not, their salaries, wage rates, commissions
and consulting fees, bonus arrangements, benefits, positions,
status as full-time or part-time employees and length of
service. The length of notice or severance payment required to
terminate the employment of any employee of Hexavision and its
Subsidiary is set forth in the applicable employment agreement
for that employee, a complete and accurate copy of which
Hexavision has delivered to Purchaser.
(cc) EMPLOYEE PLANS.
(i) Schedule 3.2(cc) lists and accurately and completely
describes all Employee Plans. Hexavision and its
Subsidiary have furnished to the Purchaser true, correct
and complete copies of all the Employee Plans as amended
as of the date hereof, together with all related
material documentation including, summary plan
descriptions, the most recent and all material
correspondence with all regulatory authorities or other
relevant persons.
(ii) All of the Employee Plans are and have been established,
registered, qualified, invested and administered, in all
respects, in accordance with their terms and all Laws,
including all Tax Laws where same is required for
preferential tax treatment. To the knowledge of Escrow
Parties, no fact or circumstance exists that could
adversely affect the preferential tax treatment
ordinarily accorded to any such Employee Plan.
(iii) No Employee Plan is subject to any pending
investigation, examination or other proceeding, action
or claim initiated by any regulatory authority, or by
any other party (other than routine claims for
benefits).
(iv) All contributions or premiums required to be paid by
Hexavision and its Subsidiary under the terms of each
Employee Plan or by Laws have been made in a timely
fashion in accordance with Laws and the terms of the
Employee Plans. Neither of Hexavision or its Subsidiary
has any liability (other than liabilities accruing after
the Closing Date) with respect to any of the Employee
Plans.
(v) No commitments to improve or otherwise amend any
Employee Plan have been made except as required by
applicable Laws.
-35-
39
(vi) None of the Employee Plans (other than pension plans)
provide benefits to retired employees or to the
beneficiaries or dependants of retired employees.
(vii) No Employee Plan exists that could result in (i) the
payment to any person of any money, benefits or other
property, (ii) accelerated or increased funding
requirements for any Employee Plan or (iii) the
acceleration or provision of any other increased rights
or benefits to any person, as a result of the
transactions contemplated by this Agreement.
(dd) INSURANCE. The assets of Hexavision and its Subsidiary are
insured against loss or damage by all insurable hazards or risks
on a replacement cost basis. Schedule 3.2(dd) contains a list of
insurance policies which are maintained by Hexavision and its
Subsidiary setting out, in respect of each policy, a description
of the type of policy, the name of insurer, the coverage
allowance, the expiration date, the annual premium and any
pending claims. Neither of Hexavision or its Subsidiary is in
default with respect to any of the provisions contained in the
insurance policies, the payment of any premiums under any
insurance policy nor has failed to give any notice or to present
any claim under any insurance policy in a due and timely
fashion. Copies of all insurance policies of Hexavision and its
Subsidiary have been delivered to Purchaser.
(ee) LITIGATION. There are no (i) actions, suits or proceedings, at
law or in equity, by any Person (including, without limitation,
Hexavision and its Subsidiary), (ii) arbitration or alternative
dispute resolution process, or (iii) any administrative or other
proceeding by or before (or to the knowledge of Escrow Parties
any investigation by) any Governmental Entity, pending, or, to
the knowledge of Escrow Parties, threatened against or affecting
Hexavision or its Subsidiary, the business or assets of
Hexavision and its Subsidiary. Neither of Hexavision or its
Subsidiary is subject to any judgment, order or decree entered
in any lawsuit or proceeding and neither of Hexavision or its
Subsidiary settled any claim prior to being prosecuted in
respect of it. Neither of Hexavision or its Subsidiary is the
plaintiff or complainant in any action, suit or proceeding.
(ff) CUSTOMERS AND SUPPLIERS. Schedule 3.2(ff) is a true and correct
list setting forth all of the major customers and suppliers of
Hexavision and its Subsidiary.
(gg) ACCOUNTS RECEIVABLE. All accounts receivable of Hexavision and
its Subsidiary are bona fide, result from the Ordinary Course,
have been properly recorded in the Ordinary Course, and, subject
to reserves in accordance with past practice, are good and
collectible in full when due without any discount, setoff or
counterclaim, in amounts equal to not less than the aggregate
face amounts thereof.
(hh) TAX MATTERS.
(i) DEFINITION OF TAXES. For the purposes of this Agreement,
the term "TAX" or, collectively, "TAXES" shall mean (A)
any and all federal, state,
-36-
40
provincial, municipal, local and foreign taxes,
assessments and other governmental charges, duties,
impositions and liabilities including Canada Pension
Plan and Provincial Pension Plan contributions and
unemployment insurance contributions and employment
insurance contributions and xxxxxxx'x compensation and
deductions at source, including taxes based upon or
measured by gross receipts, income, profits, sales,
capital use and occupation, goods and services, and
value added, ad valorem, transfer, franchise,
withholding, customs duties, payroll, recapture,
employment, excise and property taxes, together with all
interest, penalties, fines and additions imposed with
respect to such amounts and (B) any liability for the
payment of any amounts of the type described in clause
(A) of this Section 3.2(hh) as a result of any express
or implied obligation to indemnify any other Person or
as a result of any obligations under any agreements or
arrangements with any other Person with respect to such
amounts and including any liability for taxes of a
predecessor entity.
(ii) COMPUTATION, PREPARATION AND PAYMENT. Each of Hexavision
and its Subsidiary has correctly computed all Taxes,
prepared and duly and timely filed all federal, state,
provincial, municipal, local and foreign returns,
estimates, information statements, elections,
designations, reports and any other related filings
("TAX RETURNS"), required to be filed by it, has timely
paid all Taxes which are or may become due and payable
and has made adequate provision in the Financial
Statements for the period ended January 31, 2000. Each
of Hexavision and its Subsidiary has made adequate and
timely instalments of Taxes required to be made.
(iii) ACCRUED TAXES. Since January 31, 2000, each of
Hexavision and its Subsidiary has only incurred
liabilities for Taxes in the Ordinary Course.
(iv) STATUS OF ASSESSMENTS. All Tax returns of Hexavision and
its Subsidiary have been assessed through and including
each of the dates set forth in Schedule 3.2(hh)(iv)
annexed hereto, and there are no outstanding waivers of
any limitation periods or agreements providing for an
extension of time for the filing of any Tax Return or
the payment of any Tax by Hexavision and its Subsidiary
or any outstanding objections to any assessment or
reassessment of Taxes. Any deficiencies proposed as a
result of such assessments or reassessments of the Tax
returns through and including the dates set forth in
Schedule 3.2(hh)(iv) annexed hereto have been paid and
settled.
(v) WITHHOLDINGS. Each of Hexavision and its Subsidiary has
withheld from each payment made to any of its past and
present shareholders, directors, officers, employees and
agents the amount of all Taxes and other deductions
required to be withheld and has paid such amounts when
due, in the form required under the appropriate
legislation, or made adequate provision for the payment
of such amounts to the proper
-37-
41
receiving authorities. The amount of Tax withheld but
not remitted by Hexavision and its Subsidiary will be
retained in their respective accounts and will be
remitted by them to the appropriate authorities when
due.
(vi) COLLECTION AND REMITTANCE. Each of Hexavision and its
Subsidiary has collected from each receipt from any of
the past and present customers (or other Persons paying
amounts to Hexavision and its Subsidiary) the amount of
all Taxes (including goods and services tax and
provincial sales taxes) required to be collected and has
paid and remitted such Taxes when due, in the form
required under the appropriate legislation or made
adequate provision for the payment of such amounts to
the proper receiving authorities. The amount of Tax
collected but not remitted by Hexavision and its
Subsidiary will be retained in their respective accounts
and remitted by them to the appropriate authorities when
due.
(vii) ASSESSMENTS. Neither of Hexavision or its Subsidiary is
or, to the knowledge of Escrow Parties, will be subject
to any assessments, reassessment, levies, penalties or
interest with respect to Taxes which will result in any
liability on its part in respect of any period ending on
or prior to the Closing Date.
(VIII) JURISDICTIONS OF TAXATION. Neither of Hexavision or its
Subsidiary has been and is currently required to file
any returns, reports, elections, designations or other
filings with any taxation authority located in any
jurisdiction outside Canada or outside the province of
Quebec, except for Hexavision and the Subsidiary which
are required to file tax returns in the United States.
(ix) RELATED PARTY TRANSACTIONS. Neither of Hexavision or its
Subsidiary has ever been deemed to have for purposes of
the Income Tax Act (Canada) (the "ITA"), acquired or had
the use of property for proceeds greater than the fair
market value thereof from, or disposed of property for
proceeds less than the fair market value thereof to, or
received or performed services for other than the fair
market value from or to, or paid or received interest or
any other amount other than at a fair market value rate
to or from, any Person, firm or corporation with whom it
does not deal at arm's length within the meaning of the
ITA.
(x) FORGIVENESS OF DEBT. Neither of Hexavision or its
Subsidiary has at any time benefited from a forgiveness
of debt or entered into any transaction or arrangement
(including conversion of debt into shares of their share
capital) which could have resulted in the application of
Section 80 and following of the ITA.
(xi) RESEARCH AND DEVELOPMENT TAX CREDITS AND EXPENDITURES.
All refund of taxes or credits claimed with respect to
research and development ("R&D CREDIT OR REFUNDS") were
claimed by Hexavision and its Subsidiary in accordance
with the provisions of the ITA and the relevant
provincial
-38-
42
legislation and Hexavision and its Subsidiary have
satisfied at all relevant times the relevant criteria
and conditions entitling it to such R&D Credit or
Refunds.
(xii) TAX RETURNS. Hexavision and its Subsidiary have made
available to Purchaser or its legal counsel, copies of
all foreign, federal, state, provincial, municipal and
local income and all state and local sales and use Tax
Returns for Hexavision and its Subsidiary filed for all
periods terminating after January 31, 1996.
(xiii) CCPC. Since its date of incorporation, each of
Hexavision has been a "Canadian controlled private
corporation" within the meaning of the ITA.
(xiv) ASSOCIATED HEXAVISION. Neither of Hexavision or its
Subsidiary is, and neither of them has been at any time,
associated (within the meaning of the ITA) with any
other corporation.
(xv) TAX BASIS. Hexavision's and its Subsidiary's tax basis
in their assets (and the undepreciated capital cost of
such assets) for purposes of determining their future
amortization, depreciation and other Federal or
Provincial income Tax deductions is accurately reflected
on Hexavision's and its Subsidiary's Tax Returns and
records.
(xvi) PAID-UP CAPITAL. The paid-up capital for Tax purposes of
each of the Hexavision Shares is no less than its stated
capital for corporate purposes.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF HOLDCO VENDORS
4.1 INDIVIDUAL REPRESENTATIONS AND WARRANTIES OF HOLDCO VENDORS
Subject to Article 7, each Holdco Vendor individually represents and
warrants as to himself or itself, as the case may be, as follows to Purchaser
and acknowledges and confirms that Purchaser is relying upon such
representations and warranties in connection with the purchase by Purchaser of
the Holdco Shares:
(a) INCORPORATION AND QUALIFICATION. To the extent a Holdco Vendor
is a corporation, it is a corporation incorporated, organized,
existing under its jurisdiction of incorporation and has the
corporate power to own and operate its property, carry on its
business and enter into and perform its obligations under this
Agreement.
(b) VALIDITY OF AGREEMENT. The execution, delivery and performance
by him, her or it, as the case may be, of this Agreement and the
Escrow Agreement:
(i) to the extent that a Holdco Vendor is a corporation,
have been duly authorized by all necessary corporate
action on its part;
-39-
43
(ii) do not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with, or allow any other Person to exercise any
rights under, any of the terms or provisions of any
contracts or instruments to which he or it is a party
or, to the extent a Holdco Vendor is a corporation, its
constating documents or by-laws;
(iii) will not result in a breach of, or cause the termination
or revocation of, any Authorization held by him or it,
as the case may be, necessary to the ownership or the
operation of the business of Hexavision or its
Subsidiary; and
(iv) will not result in the violation of any Law, except
where such violation would not have a material adverse
effect on the transactions contemplated by this
Agreement or the business, operations and assets of
Hexavision or its Subsidiary.
(c) EXECUTION AND BINDING OBLIGATION. This Agreement has been duly
executed and delivered by, and constitutes a legal, valid and
binding obligation of, enforceable against, him or it, as the
case may be, in accordance with its terms subject only to any
limitation under applicable Laws relating to (i) bankruptcy,
winding-up, insolvency, arrangement and other similar Laws of
general application affecting the enforcement of creditors'
rights, and (ii) the discretion that a court may exercise in the
granting of equitable remedies such as specific performance and
injunction.
(d) TITLE TO HOLDCO SHARES. He or it, as the case may be, is the
registered and beneficial owner of the number and class of
shares set out beside his or its respective name in Schedule
4.1(d), with a good title thereto, free and clear of all Liens.
Such shares collectively constitute the Holdco Shares. Upon
Closing, Purchaser will have good and valid title to such Holdco
Shares, free and clear of all Liens.
(e) RESIDENCE OF HOLDCO VENDORS. He or it, as the case may be, is
not a non-resident of Canada within the meaning of the ITA.
(f) NO OTHER AGREEMENTS TO PURCHASE. Except for Purchaser's right
under this Agreement and the pre-emptive rights granted under
the Shareholders Agreement, the shareholders agreement by and
between the Holdco Vendors, Holdco and Xxxxxxxx Xxxxxxxx dated
January 30, 1997 and the subscription rights granted to the
Investors under the Subscription Agreement between the Investors
and Hexavision dated February 3, 2000 which rights have been
waived by the holders thereof on the date hereof, no Person
(including, without limitation the employees and shareholders of
Hexavision, its Subsidiary and Holdco) has any written or oral
agreement, option or warrant or any right or privilege (whether
by Law, pre-emptive or contractual) capable of becoming such for
(i) the purchase or acquisition from he or it, as the case may
be, of any of
-40-
44
his or its Holdco Shares, or (ii) the purchase, subscription,
allotment or issuance of any of the unissued shares or other
securities of Holdco.
(g) NOT A U.S .PERSON. He or it, as the case may be, is not a U.S.
Person and is not acquiring the securities for the account or
benefit of any U.S. Person.
4.2 SOLIDARY REPRESENTATIONS AND WARRANTIES OF HOLDCO VENDORS
Subject to Article 7, the Holdco Vendors solidarily (jointly and
severally) represent and warrant to Purchaser that, except for what is reflected
in Section 2.12, Holdco does not have and never had any liabilities or
obligations of any nature (whether absolute, accrued, contingent or otherwise)
and does not own and never owned any assets other than the shares it owns in the
share capital of Hexavision. The Holdco Vendors acknowledge and confirm that
Purchaser is relying on this representation and warranty in connection with the
purchase by Purchaser of the Holdco Shares.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF PURCHASER
5.1 REPRESENTATIONS AND WARRANTIES OF PURCHASER AND ADEPT
Each of Purchaser and Adept individually represent and warrant as
follows to Escrow Parties and Minority Shareholders and acknowledges and
confirms that Escrow Parties and Minority Shareholders are relying on such
representations and warranties in connection with the sale by Vendors of the
Hexavision Shares and the sale by Holdco Vendors of the Holdco Shares:
(a) INCORPORATION AND CORPORATE POWER. Each of the Purchaser and
Adept is a corporation incorporated, in good standing and
existing under the Laws of its jurisdiction of incorporation and
has the corporate power and authority to enter into and perform
its obligations under this Agreement.
(b) VALIDITY OF AGREEMENT. Other than the consents which have been
obtained, the execution, delivery and performance by Purchaser
and Adept of this Agreement and, in the case of Purchaser only,
the Indemnification Escrow Agreement:
(i) have been duly authorized by all necessary corporate
action on the part of Purchaser and Adept;
(ii) do not (or would not with the giving of notice, the
lapse of time or the happening of any other event or
condition) result in a breach or a violation of, or
conflict with, any of the terms or provisions of its
constating documents or by-laws or any contracts or
instruments to which it is a party or pursuant to which
any of its assets or property may be affected; and
(iii) will not result in the violation of any Law.
-41-
45
(c) EXECUTION AND BINDING OBLIGATION. This Agreement and, in the
case of Purchaser only, the Indemnification Escrow Agreement
have been duly executed and delivered by Purchaser and Adept and
constitute a legal, valid and binding obligation of Purchaser
and Adept, enforceable against it in accordance with their
respective terms subject only to any limitation under applicable
Laws relating to (i) bankruptcy, winding-up, insolvency,
arrangement and other similar Laws of general application
affecting the enforcement of creditors' rights, and (ii) the
discretion that a court may exercise in the granting of
equitable remedies such as specific performance and injunction.
(d) REQUIRED AUTHORIZATIONS. There is no requirement to make any
filing with, give any notice to, or obtain any Authorization of,
any Governmental Entity or Person as a condition to the lawful
completion of the transactions contemplated by this Agreement
other than those filings, notices and authorizations
contemplated in Section 2.8 and those which have been obtained.
ARTICLE 6
CLOSING
6.1 DATE, TIME AND PLACe OF CLOSING
The completion of the transaction of purchase and sale contemplated by
this Agreement shall take place at the offices of Xxxxxx Blaike, 000
Xxxx-Xxxxxxxx Xxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxx X0X 0X0, at 10:00 a.m.
(Quebec time) on the Closing Date or at such other place, on such other date and
at such other time as may be agreed upon in writing between Hexavision and
Purchaser.
ARTICLE 7
INDEMNIFICATION
7.1 ESCROW PARTIES INDEMNIFICATION IN FAVOUR OF PURCHASER
Subject to Sections 7.5 and 7.6, Escrow Parties shall indemnify and save
Purchaser, Adept, Hexavision and its Subsidiary harmless of and from:
(a) any Damages suffered by, imposed upon or asserted against
Purchaser, Adept, Hexavision and its Subsidiary as a result of,
in respect of, connected with, or arising out of, under, or
pursuant to any breach or inaccuracy of or any failure of Escrow
Parties to perform or fulfil any of their Individual
Representations and Covenants under this Agreement;
(b) 96% of any Damages suffered by, imposed upon or asserted against
Purchaser, Adept, Hexavision and its Subsidiary as a result of,
in respect of, connected with, or arising out of, under, or
pursuant to any breach or inaccuracy of or any failure to
perform or fulfil any of the Solidary Representations and
Covenants given or made by Escrow Parties under in this
Agreement;
-42-
46
(c) any Damages suffered by, imposed upon or asserted against
Purchaser, Adept. Hexavision and its Subsidiary as a result of,
in respect of, connected with, or arising out of, under, or
pursuant to any liabilities or obligations of Hexavision or its
Subsidiary for Taxes due in connection with any period ending on
or prior to the Closing Date; and
(d) notwithstanding any disclosure contained in the Schedules
attached hereto, 50% of any legal costs incurred and amounts
paid to Cognex Corporation ("COGNEX") by Adept, Purchaser,
Hexavision or its Subsidiary as a result of, in respect of, in
any way connected with, or arising out of, under or pursuant to
any claim made by Cognex or any of its Affiliates (collectively
a "COGNEX CLAIM"): (i) that the Intellectual Property Assets (or
any part thereof) as such assets exist on the Closing Date (but
including the changes described in Schedule 7.1) infringes upon
any of the patents of Cognex or its Affiliates as disclosed on
the public file as at the Closing Date or (ii) challenging
Hexavision's or its Subsidiaries complete and exclusive
ownership or enforceability of the Intellectual Property Assets
(or any part thereof) as such assets exist on the Closing Date
(but including the changes described in Schedule 7.1) on the
basis of the patents of Cognex or its Affiliates disclosed on
the public file as at the Closing Date. Notwithstanding anything
herein to the contrary, no party to this Agreement shall be
liable to indemnify and save harmless Adept, Purchaser,
Hexavision and its Subsidiary of and from any Damages suffered
by, imposed upon or asserted against Adept, Purchaser,
Hexavision or its Subsidiary as a result of, in respect of,
connected with or arising out of, under, or pursuant to any
Cognex's Claim, or any breach or inaccuracy of any
representation or warranty given by any party or any failure to
perform or fulfil any covenants given or made by any party under
this Agreement insofar as they relate to, are connected with or
arise from any Cognex's Claim, other than as set forth in this
Section 7.1(d).
7.2 MINORITY SHAREHOLDER INDEMNIFICATION IN FAVOR OF PURCHASER
Subject to Sections 7.5 and 7.6, Minority Shareholders shall indemnify
and save Purchaser, Hexavision and its Subsidiary harmless of and from any
Damages suffered by, imposed upon or asserted against Purchaser, Hexavision and
its Subsidiary as a result of, in respect of, connected with, or arising out of,
under or pursuant to:
(a) any failure of Minority Shareholders to perform or fulfil any of
their covenants under this Agreement; and
(b) any breach or inaccuracy of any representation or warranty given
by Minority Shareholders contained in this Agreement.
-43-
47
7.3 HOLDCO VENDORS INDEMNIFICATION IN FAVOR OF PURCHASER
Subject to Sections 7.5 and 7.6, Holdco Vendors shall indemnify and save
Purchaser, Holdco, Hexavision and its Subsidiary harmless of and from any
Damages suffered by, imposed upon or asserted against Purchaser, Holdco,
Hexavision and its Subsidiary as a result of, in respect of, connected with, or
arising out of, under or pursuant to:
(a) any failure of Holdco Vendors to perform or fulfil any of their
covenants under this Agreement;
(b) any breach or inaccuracy of any representation or warranty given
by Holdco Vendors contained in Article 4 of this Agreement; and
(c) any liabilities or obligations of Holdco of any nature
whatsoever arising after the Closing Date in respect of any
fact, condition or circumstance existing or occurring on or
prior to the Closing Date, including, without limitation, any
liabilities of Holdco for Taxes due in connection with any
period ending on or prior to the Closing Date.
7.4 PURCHASER AND ADEPT INDEMNIFICATION IN FAVOUR OF ESCROW PARTIES AND
MINORITY SHAREHOLDERS
Subject to Section 7.5, Purchaser and Adept shall indemnify and save
Escrow Parties and Minority Shareholders harmless of and from any Damages
suffered by, imposed upon or asserted against Escrow Parties and Minority
Shareholders as a result of, in respect of, connected with, or arising out of,
under or pursuant to:
(a) any failure of Purchaser and Adept to perform or fulfil any
covenant of Purchaser under this Agreement; and
(b) any breach or inaccuracy of any representation or warranty given
by Purchaser and Adept contained in this Agreement.
7.5 TIME LIMITATIONS
(1) The representations and warranties of Escrow Parties, Minority
Shareholders and Holdco Vendors contained in this Agreement shall
survive the Closing and, notwithstanding the Closing and any
investigation made by or on behalf of Purchaser and Adept, shall
continue for a period of two years after the Closing, except that:
(a) the representations and warranties set out in Sections 3.1,
3.2(a), 3.2(b), 3.2(d), 3.2(f), 3.2(g), 3.2(i) and Article 4
shall survive the Closing and continue in full force and effect
without limitation of time;
(b) the representations and warranties set out in Section 3.2(hh)
shall survive and continue in full force and effect until 90
days after the expiration of the period, if any, during which an
assessment, reassessment or other form of recognized document
assessing liability for tax, interest or penalties under
applicable tax
-44-
48
legislation in respect of any taxation year to which such
representations and warranties extend could be issued under such
tax legislation to Hexavision and its Subsidiary; and
(c) subject to Section 7.6(5), a claim for any breach of any of the
representations and warranties of Escrow Parties and Minority
Shareholders contained in this Agreement involving fraud or
fraudulent misrepresentation shall survive and continue in full
force and effect without limitation of time.
(2) The representations and warranties of Purchaser and Adept set out in
Article 5 shall continue in full force and effect without limitation of
time except for the representations and warranties of Adept set out in
Sections 2.8(f) and 5.1(d) which shall survive for a period of two years
after the Closing.
(3) The obligation of indemnification set out in Sections 7.1, 7.2, 7.3 and
7.4 shall survive the Closing, except for the obligation of
indemnification arising from (i) any incorrectness in, or breach of, any
representation or warranty made by Escrow Parties pursuant to Section
3.2 of this Agreement which shall be subject to the limitations
regarding survival of representations and warranties set forth in
Section 7.5(1); (ii) Section 7.1(d) which shall survive for a period of
two years after the Closing and (iii) any incorrectness in, or breach
of, any representation or warranty made by Adept pursuant to Sections
2.8(f) and 5.1(d) which shall survive two years after the Closing.
7.6 LIMITATION ON DAMAGES
(1) The covenants and representations of each Party (other than Purchaser
and Adept) in Article 2 and the representations and warranties of each
Party (other than Purchaser and Adept) in Section 3.1 and Section 4.1
are individual representations, warranties and covenants of each such
Party (collectively, the "INDIVIDUAL REPRESENTATIONS AND COVENANTS").
This means that the particular Party making the Individual
Representations and Covenants will be solely liable for such Individual
Representations and Covenants as they pertain to himself or itself, but
not as they pertain to the other Party. The representations and
warranties of Holdco Vendors in Section 4.2 are made solidarily (jointly
and severally) as between themselves but not as between themselves and
any other Vendor. The representations and warranties of Purchaser and
Adept set out in Section 5.1 are individual representations and
warranties of each of them which means that Purchaser and Adept, as the
case may be, will be solely liable for such representations and
warranties as they pertain to itself but not as they pertain to the
other. The remainder of the representations, warranties and covenants in
this Agreement are made solidarily (jointly and severally) by Escrow
Parties (collectively, the "SOLIDARY REPRESENTATIONS AND COVENANTS").
This means that Escrow Parties will be solidarily (jointly and
severally) liable to Purchaser and Hexavision and its Subsidiary for any
breach of any Solidary Representation and Covenant to the extent
provided in Article 7.
(2) Other than Damages suffered by Purchaser, Adept, Hexavision and its
Subsidiary (i) as a result of a breach or inaccuracy of the Individual
Representations and Covenants; (ii) as a result of a breach or
inaccuracy of the representations and warranties contained in
-45-
49
Section 4.2; all of which shall not be subject to the limitations in
this Section 7.6(2), the liability of Escrow Parties, Minority
Shareholders and Holdco Vendors for indemnification pursuant to Section
7.1, 7.2 and 7.3, respectively shall be limited as follows
(collectively, the "CAPS"):
(a) Escrow Parties shall not be liable to indemnify Purchaser,
Adept, Hexavision or its Subsidiary until the aggregate of all
claims for Damages exceed $12,500 and then only for the portion
in excess thereof;
(b) no Investor shall be liable to indemnify Purchaser, Adept,
Hexavision or Subsidiary for Damages in respect of claims made
against the Investors by Purchaser, Adept, Hexavision or
Subsidiary if such Damages exceed in the aggregate such
Investor's respective portion of the Indemnity Fund; and
(c) the Escrow Parties (other than Investors) shall not be liable to
indemnify Purchaser, Adept, Hexavision or Subsidiary for Damages
in respect of claims made against them by Purchaser, Adept,
Hexavision or Subsidiary if the aggregate of all claims for
Damages made against them exceed the sum of: (y) the total
Purchase Price (including the value represented by the
Indemnifying Vendor Shares) due to Escrow Parties (other than
Investors) and; (z) the Bonus Payments (including the value
represented by the Indemnifying Employee Shares). The liability
of each Escrow Party (other than Investors) for any claims for
Damages made against them by Purchaser in excess of their
respective portion of the Indemnity Fund shall be on a joint and
divisible basis. To the extent any claims for Damages are made
by Purchaser against any Escrow Party (other than Investors) as
a result of any breach or inaccuracy of the representations and
warranties contained in Section 3.2(u) and the individual
liability of an Escrow Party (other than Investors) for all
claims made for such Damages exceeds in the aggregate his or its
total portion of the Indemnity Fund, that Escrow Party will not
be liable to Purchaser, Adept, Hexavision or Subsidiary, unless
it is proven that the concerned Escrow Party had knowledge that
the representations and warranties contained in Section 3.2(u)
were inaccurate or breached. In no event shall the individual
liability of each Escrow Party (other than the Investors) exceed
the portion of the amounts referred to in (y) and (z) above
payable to that Escrow Party.
The limitations contained in Section 7.6(2)(a) shall not apply in the
case of Damages suffered by Purchaser, Adept, Hexavision of its
Subsidiary involving fraud or fraudulent misrepresentation. The
limitations contained in Sections 7.6(2)(b) and 7.6(2)(c) shall not
apply to the Party who has committed a fraud or made a fraudulent
misrepresentation that caused Damages to Purchaser, Adept, Hexavision or
its Subsidiary, but only with respect to such Damages.
(3) Other than Damages suffered by Purchaser and Adept or its Subsidiary (i)
as a result of a breach or inaccuracy of the representations and
warranties contained in Article 4; or (ii) involving fraud or fraudulent
misrepresentation, all of which shall not be subject to the limitations
set out in this Section 7.6(3), each Party (other than Purchaser and
Adept) shall not be liable to indemnify Purchaser , Adept, Hexavision or
its Subsidiary for a
-46-
50
breach or inaccuracy of the Individual Representations and Covenants to
the extent that such Party's individual liability therefor exceeds the
Purchase Price and/or Bonus Payments payable to him or it pursuant to
Sections 2.4 and 2.5 (the "INDIVIDUAL CAP"). For greater certainty, to
the extent that a particular Party is entitled to receive cash and
Shares in consideration of Purchase Price and/or Bonus Payments, such
cash and the value represented by such Shares shall be aggregated for
the purposes of calculating the Individual Cap for such Party.
(4) Any amounts taken into account in calculating the Caps shall be taken
into account in calculating the Individual Caps and vice versa.
(5) Notwithstanding anything herein to the contrary, any claim for Damages
made by Purchaser, Adept, Hexavision or its Subsidiary against Escrow
Parties after two years from the Closing Date for a breach of a
representation and warranty contained in Section 3.2 (other than the
representations and warranties referred to in Sections 7.5(1)(a) and
7.5(1)(b)) based on fraud or fraudulent misrepresentation shall only be
made against the particular Escrow Party or Escrow Parties who has or
have committed such fraud or made such fraudulent misrepresentation.
(6) Notwithstanding anything herein to the contrary, any claim for Damages
made by Purchaser, Adept, Hexavision or its Subsidiary against Escrow
Parties pursuant to Section 7.1(d) shall only be made against the
Indemnity Fund and when the Indemnity Fund or any part hereof has been
distributed (or issued in case of the Adept Shares) to the Escrowed
Parties, Purchaser, Adept, Hexavision or its Subsidiary shall no longer
have any recourse for such claims against such distributed (or issued,
in the case of the Adept Shares) portion of the Indemnity Fund.
7.7 LIABILITY OF ESCROW PARTIES AMONG THEMSELVES
As between each Escrow Party, contribution to the payment of the Damages
in respect of a breach of a Solidary Representation and Covenant pursuant to
Article 7 shall be made in accordance to each of such Escrow Party's aggregate
proportionate share of the Purchase Price and/or Bonus Payments payable to him
or it. For greater certainty, nothing in this Section 7.7 shall in any way limit
or restrict the ability of Purchaser to claim from any one Escrow Party the
totality of any Damages suffered by Purchaser in respect of a Solidary
Representation and Covenant to the extent provided by the other Sections
contained in this Article 7. This Section has been included strictly for the
benefit of the Escrow Parties and is intended to govern the allocation of their
respective liability among themselves and not among themselves and Purchaser.
7.8 OBLIGATION TO REIMBURSE
The amount of any Damages suffered or incurred by a party being
indemnified hereunder (the "INDEMNIFIED PARTY ") shall accrue interest at a rate
per annum equal to the prime rate + 1% as announced by Royal Bank of Canada from
the date it is determined that the Indemnified Party incurs any such Damages
until payment in full by the Party providing for indemnification hereunder (the
"INDEMNIFYING PARTY").
-47-
51
7.9 NOTIFICATION
Promptly upon obtaining knowledge thereof, the Indemnified Party shall
notify the Indemnifying Party of any cause which the Indemnified Party has
determined has given or could give rise to indemnification under this Article 7
(a "NOTICE"), provided that in the case of an indemnification matter referred to
in Section 7.1(d) a Notice may only be given by Purchaser to Escrow Parties if
Purchaser has received a written notice from Cognex or one of its Affiliates
which would give rise to indemnification pursuant to such Section. The omission
so to notify the Indemnifying Party shall not relieve the Indemnifying Party
from any duty to indemnify and hold harmless which otherwise might exist with
respect to such cause unless the notification occurs after the expiration of the
applicable time limit as set out in Section 7.5 (and only to that extent), or
the omission to notify materially prejudices the ability of the Indemnifying
Party to exercise its right to defend provided in this Article 7.
7.10 DEFENSE OF THIRD PARTY CLAIM
(1) If any legal proceeding shall be instituted or any claim or demand shall
be asserted by a third party, including a Cognex Claim (in which case
this Section 7.10 shall apply mutatis mutandis to such Cognex Claim),
against Purchaser, Adept, Hexavision or its Subsidiary (each a "THIRD
PARTY CLAIM"), then Escrow Parties shall have the right, after receipt
of the notice provided by Purchaser under Section 7.9 and upon giving
notice to Purchaser within not more than 25 calendar days of such
receipt: (i) in the case of a Cognex Claim or any other Third Party
Claim for which the amount of indemnification being sought is equal to
or greater than 50% of the balance of the Indemnity Fund (less any
Claimed Amount) at the time such claim is made (collectively, a
"PURCHASER CONTROLLED CLAIM"), to participate in the defense of the
Purchaser Controlled Claim at its own cost and expense with counsel of
its own selection; and (ii) in the case of a Third Party Claim which is
not a Cognex Claim and for which the amount of indemnification being
sought is less than 50% of the balance of the Indemnity Fund (less any
Claimed Amount) at the time such claim is made (an "ESCROW PARTY
CONTROLLED CLAIM"), to control the defense of the Escrow Party
Controlled Claim at its own cost and expense with counsel of its own
selection, in each case provided that:
(a) Purchaser shall at all times have the right to control the
defense of a Purchaser Controlled Claim provided that Purchaser
shall consult with and in good faith use commercially reasonable
efforts to obtain the agreement of Escrow Parties with respect
to any settlement of a Purchaser Controlled Claim;
(b) Escrow Parties shall have the right at all times to control the
defense of an Escrow Party Controlled Claim provided that Escrow
Parties shall consult with and use commercially reasonable
efforts to obtain the agreement of Purchaser with respect to the
settlement of an Escrow Party Controlled Claim;
(c) the Third Party Claim seeks only monetary damages and does not
seek any injunctive or other relief against Purchaser, Adept,
Hexavision or its Subsidiary;
-48-
52
(d) legal counsel chosen by Escrow Parties is satisfactory to
Purchaser, acting reasonably; and
(e) amounts payable by Escrow Parties pursuant to a Third Party
Claim shall be paid in accordance with the terms of the
settlement or, final non-appealable judgment.
(2) Escrow Parties shall not be permitted to compromise and settle or to
cause a compromise and settlement of any Third Party Claim, without the
prior written consent of Purchaser, unless:
(a) the terms of the compromise and settlement require only the
payment of money and do not require Purchaser, Adept, Hexavision
or its Subsidiary, to admit any wrongdoing or take or refrain
from taking any action; and
(b) Purchaser, Adept, Hexavision or its Subsidiary receives, as part
of the compromise and settlement, a legally binding and
enforceable unconditional satisfaction or release, which is in
form and substance satisfactory to Purchaser, acting reasonably,
from any and all obligations or liabilities it may have with
respect to the Third Party Claim.
(3) If Escrow Parties fail within not more than 25 calendar days from
receipt of the notice of a Third Party Claim to give notice of their
intention to participate in the Third Party Claim in accordance with
Section 7.10(1), then each Escrow Party shall be deemed to have waived
its right to participate in the Third Party Claim and Purchaser shall
have the right (but not the obligation) to undertake or to cause
Hexavision to undertake the defense of the Third Party Claim and
compromise and settle the Third Party Claim on behalf, for the account
and at the risk and expense of Escrow Parties.
(4) Where Escrow Parties participates or controls the defense of a Third
Party Claim, Purchaser will use its reasonable efforts to make available
to Escrow Parties those employees whose assistance, testimony or
presence is necessary to assist the Escrow Parties in evaluating and
participating in the defense of any such claims.
(5) With respect to any Third Party Claim, at the request of Escrow Parties,
Purchaser shall make available to Escrow Parties or its representatives
on a timely basis all documents, records and other materials in the
possession of Purchaser, at the expense of Escrow Parties, reasonably
required by Escrow Parties for its use in defending any such claim and
shall otherwise cooperate on a timely basis with Escrow Parties in the
defense of such claim.
(6) With respect to any Third Party Claim in respect of income, corporate,
sales, excise, or other tax or other liability enforceable by Lien
against the property of Purchaser, Adept, Hexavision or its Subsidiary,
Escrow Party's right to so defend the proceeding shall only apply after
payment of the re-assessment.
-49-
53
ARTICLE 8
POST-CLOSING COVENANTS
8.1 FURTHER ASSURANCES
From time to time after the Closing Date, each Party shall, at the
request of any other Party, execute and deliver such additional conveyances,
transfers and other assurances as may be reasonably required to effectively
transfer the Hexavision Shares and the Holdco Shares to Purchaser and carry out
the intent of this Agreement.
ARTICLE 9
MISCELLANEOUS
9.1 NOTICES
All notices and other communications pursuant to this Agreement shall be
in writing and shall be deemed given if delivered personally, telecopied, sent
by nationally-recognized overnight courier or mailed by registered or certified
mail (return receipt requested), postage prepaid, to the Parties at the
addresses set forth below or to such other address as the Party to whom notice
is to be given may have furnished to the other Parties hereto in writing in
accordance herewith. Any such notice or communication shall be deemed to have
been delivered and received (A) in the case of personal delivery, on the date of
such delivery, (B) in the case of telecopier, on the date sent if confirmation
of receipt is received and such notice is also promptly mailed by registered or
certified mail (return receipt requested), (C) in the case of a
national-recognized overnight courier in circumstances under which such courier
guarantees next Business Day delivery, on the next Business Day after the date
when sent and (D) in the case of mailing, on the third Business Day following
that on which the piece of mail containing such communication is posted:
If to Purchaser or Adept at:
Adept Technology, Inc.
000 Xxxx Xxxxxxx Xxx
Xxx Xxxx, XX 00000
Attention: Chief Financial Officer
Facsimile: (000) 000-0000
-50-
54
With a copy to Xxxxxx, Xxxx & Xxxxxxxx LLP at:
Xxx Xxxxxxxxxx Xxxxxx
Xxxxxxx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and a copy to Stikeman Elliott at:
0000 Xxxx-Xxxxxxxx Xxxx Xxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxx X. Xxxxxxx and Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Escrow Parties or Minority Shareholders to them at their
respective coordinates set forth on Schedule 9.1.
9.2 TIME OF THE ESSENCE
Time shall be of the essence of this Agreement.
9.3 BROKERS
Escrow Parties shall indemnify and save harmless Purchaser, Adept,
Hexavision or its Subsidiary from and against any and all claims, losses and
costs whatsoever for any commission or other remuneration payable or alleged to
be payable to any broker, agent or other intermediary who purports to act or
have acted for Escrow Parties or Hexavision. Purchaser shall indemnify and save
harmless Escrow Parties from and against any and all claims, losses and costs
whatsoever for any commission or other remuneration payable or alleged to be
payable to any broker, agent or other intermediary who purports to act or have
acted for Purchaser. These indemnities shall not be subject to any of the
limitations set out in Article 7 of this Agreement.
-51-
55
9.4 ANNOUNCEMENTS
No Party shall issue any press release or public statement or
announcement (a "PUBLIC STATEMENT") with respect to the transaction contemplated
in this Agreement without the prior written consent of the other parties, such
consent not to be unreasonably withheld, unless such Public Statement is
required by Law or by any stock exchange, in which case the Party required to
make the Public Statement shall be free to make such Public Statement.
9.5 THIRD PARTY BENEFICIARIES
The Parties intend that this Agreement shall not benefit or create any
right or cause of action in, or on behalf of, any Person other than the Parties
to this Agreement and no Person, other than the Parties to this Agreement shall
be entitled to rely on the provisions of this Agreement in any action, suit,
proceeding, hearing or other forum.
9.6 EXPENSES
Except as otherwise expressly provided in this Agreement including
Article 7, all costs and expenses (including the fees and disbursements of legal
counsel, investment advisers and accountants) incurred in connection with this
Agreement and the transactions contemplated herein and therein shall be paid by
the Party incurring such expenses.
9.7 AMENDMENTS
This Agreement may only be amended, supplemented or otherwise modified
by written agreement signed by the Parties hereto.
9.8 WAIVER
(1) No waiver of any of the provisions of this Agreement shall be deemed to
constitute a waiver of any other provision (whether or not similar), nor
shall such waiver be binding unless executed in writing by the Party to
be bound by the waiver.
(2) No failure on the part of the Parties to exercise, and no delay in
exercising any right under this Agreement shall operate as a waiver of
such right; nor shall any single or partial exercise of any such right
preclude any other or further exercise of such right or the exercise of
any other right.
9.9 NON-MERGER
Except as otherwise expressly provided in this Agreement, the covenants,
representations and warranties shall not merge on and shall survive the Closing
and, notwithstanding such Closing and any investigation made by or on behalf of
any Party, shall continue in full force and effect. Closing shall not prejudice
any right of one Party against any other Party in respect of anything done or
omitted under this Agreement or in respect of any right to damages or other
remedies.
-52-
56
9.10 ENTIRE AGREEMENT
This Agreement together with the agreements referred to herein
constitute the entire agreement between the Parties with respect to the
transactions contemplated in this Agreement and supersedes all prior agreements,
understandings, negotiations and discussions, whether oral or written, of the
Parties. There are no representations, warranties, covenants, conditions or
other agreements, express or implied, collateral, statutory or otherwise,
between the Parties in connection with the subject matter of this Agreement
except as specifically set forth herein and neither of the Parties has relied or
is relying on any other information, discussion or understanding in entering
into and completing the transactions contemplated in this Agreement.
9.11 SUCCESSORS AND ASSIGNS
This Agreement shall become effective when executed by the Parties
hereto and after that time shall be binding upon and enure to the benefit of the
Parties hereto and their respective successors and permitted assigns. Neither
this Agreement nor any of the rights or obligations under this Agreement shall
be assignable or transferable by Escrow Parties and Minority Shareholders
without the prior written consent of the Purchaser. Purchaser and Adept may
assign and transfer this Agreement and any of its rights and obligations under
this Agreement to an Affiliate without the prior written consent of Escrow
Parties and Minority Shareholders, provided that Purchaser and Adept shall not
by reason of any such assignment and transfer be released from their obligations
hereunder.
9.12 SEVERABILITY
If any provision of this Agreement shall be determined by an arbitrator
or any court of competent jurisdiction to be illegal, invalid or unenforceable,
that provision shall be severed from this Agreement and the remaining provisions
shall continue in full force and effect.
9.13 GOVERNING LAW
This Agreement shall be governed by and interpreted in accordance with
the laws of the Province of Quebec and the laws of Canada applicable therein.
9.14 FURTHER ASSURANCES
The Parties agree to do, sign and execute all acts, deeds, documents,
instruments and corporate proceedings as may be necessary or desirable to give
full force and effect to this Agreement.
9.15 SUCCESSORS IN INTEREST
This Agreement shall enure to the benefit of and be binding upon the
Parties hereto and their respective successors, assigns and legal
representatives.
-53-
57
9.16 LANGUAGE
The Parties hereto confirm that it is their wish that this Agreement as
well as other documents relating hereto have been and shall be drawn up in
English only. Les parties aux presentes confirment leur volonte que cette
convention de meme que tous les documents s'y rattachant soient rediges en
anglais seulement.
9.17 COUNTERPARTS
This Agreement may be executed in any number of counterparts (including
counterparts by facsimile) and all such counterparts taken together shall be
deemed to constitute one and the same instrument.
[INTENTIONALLY LEFT BLANK]
-54-
58
IN WITNESS WHEREOF the Parties have executed this Share Purchase
Agreement as of the date first written above.
[MINORITY SHAREHOLDERS]
/s/ Xxxx-Xxx Xxxxxxxxx /s/ Xxxxxxx Xxxxxxxx
--------------------------------- -----------------------------------
Xxxx-Xxx Xxxxxxxxx Xxxxxxx Xxxxxxxx
/s/ Real Xxxxxxxx /s/ Xxxx Xxxxxxxx
--------------------------------- -----------------------------------
Real Xxxxxxxx Xxxx Xxxxxxxx
/s/ Xxxxxx Xxxxxxxxx /s/ Xxxxxxxx Xxxxx
--------------------------------- -----------------------------------
Xxxxxx Xxxxxxxxx Xxxxxxxx Xxxxx
/s/ Xxxxxx Xxxxxx /s/ Xxxxxx Xxxxx
--------------------------------- -----------------------------------
Xxxxxx Xxxxxx Xxxxxx Xxxxx
/s/ Xxxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxxx
--------------------------------- -----------------------------------
Xxxxxxxx Xxxxxx Xxxxxxx Xxxxxxx
/s/ Xxxxx Xxxxxxxxx /s/ Xxxxxx-Xxxx Xxxxxx
--------------------------------- -----------------------------------
Xxxxx Xxxxxxxxx Xxxxxx-Xxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx /s/ Xxxxxxx Xxxxxx
--------------------------------- -----------------------------------
Xxxxxxx Xxxxxx Xxxxxxx Xxxxxx
59
[INVESTORS]
SOCIETE INNOVATECH QUEBEC ET SOFINOV, SOCIETE FINANCIERE
CHAUDIERE-APPALACHES D'INNOVATION INC.
By: /s/ illegible By: /s/ illegible
------------------------------ --------------------------------
By: /s/ illegible By: /s/ illegible
------------------------------ --------------------------------
BUSINESS DEVELOPMENT BANK OF CANADA
By: /s/ Xxxx X. Xxxxx
------------------------------
[HOLDCO VENDORS]
/s/ Xxxx Xxxxxxxx /s/ Xxxx St-Pierre
--------------------------------- -----------------------------------
Xxxx Xxxxxxxx Xxxx St-Pierre
/s/ Xxxxx Xxxxxx /s/ Xxxxxx Xxxxxx
--------------------------------- -----------------------------------
Xxxxx Xxxxxx Xxxxxx Xxxxxx
60
By: /s/ Xxxx X. Xxxxxxxx
-----------------------------
/s/ Xxxxxxxxx Xxxxx /s/ Xxxxxxx Xxxxxx
--------------------------------- -----------------------------------
Xxxxxxxxx Xxxxx Xxxxxxx Xxxxxx
[PURCHASER] [ADEPT]
ADEPT TECHNOLOGY CANADA HOLDING CO. ADEPT TECHNOLOGY, INC.
By: /s/ Xxxxxxx Xxxxxx By: /s/ Xxxxxxx Xxxxxx
----------------------------- -------------------------------
