EXHIBIT 10.13
AMENDMENT AGREEMENT
This Amendment Agreement (this "Agreement") is made this 28th day of
October by and between by PROGINET CORPORATION, a Delaware corporation located
at 000 Xxxxxx Xxxx Xxxxx, Xxxxxx Xxxx, XX 00000 ("Proginet"), and MICROSOFT
CORPORATION, a Washington corporation located at Xxx Xxxxxxxxx Xxx, Xxxxxxx, XX
00000, ("Microsoft"), and relates to the Asset Purchase Agreement entered into
between these same parties dated the 17th day of December, 1996 (the "Asset
Purchase Agreement"). Capitalized terms used but not defined herein have the
meanings assigned to them in the Asset Purchase Agreement.
WHEREAS, the Transition Period specified in the Asset Purchase
Agreement has expired and the parties wish to provide for a final resolution of
certain obligations the parties owe each other under the Asset Purchase
Agreement; and
WHEREAS, for the purposes of greater certainty, the parties wish to
clarify the covenants and obligations that will continue to survive under the
Asset Purchase Agreement and the related agreements contemplated by the Asset
Purchase Agreement (the "Related Agreements"), including, without limitation,
the Investment Agreement, the BackOffice license contemplated by Section 6.3 of
the Asset Purchase Agreement, the Assignment and Xxxx of Sale, the Assumption of
Obligations and the Covenant (the "Covenant") each entered into in connection
with the Asset Purchase Agreement.
NOW, THEFORE, based on the foregoing, and the mutual covenants and
agreements set forth herein, the parties agree as follows:
1 ASSET PURCHASE AGREEMENT AND RELATED AGREEMENTS
1.1 DELIVERY OF SHARES. In full and complete satisfaction of Proginet's
obligations under Sections 3.1 and 3.3 of the Asset Purchase Agreement,
simultaneous with the execution of this Agreement Proginet is issuing and
delivering to Microsoft 1,260,000 shares of Proginet Common Stock (the
"Settlement Shares"). The Settlement Shares and the 100,000 shares of Proginet
Common Stock heretofore delivered to Microsoft pursuant to the Asset Purchase
Agreement (the "Original Shares") are collectively referred to as the "Shares."
Upon issuance, the Shares shall be freely tradable on the Vancouver Stock
Exchange (the "VSE") in reliance upon the letter of XxXxxxxx Xxxxxxxx, counsel
to Microsoft, to the effect that no prospectus is required under the Securities
Act (British Columbia) (the "BC Act") in connection with the proposed sale,
transfer or other disposition of such Shares in British Columbia. A copy of such
letter is attached hereto as Annex 1. Upon issuance, the Settlement Shares shall
be free from all restrictive legends and, upon surrender of the Original Shares
to Proginet, Proginet shall reissue to Microsoft a certificate representing such
shares free from all restrictive legends. At or prior to the time of delivery of
the Settlement Shares, Proginet shall remove any stop transfer instructions with
respect to the Shares previously provided to the transfer agent for the Proginet
Common Stock.
1.1.1 RESTRICTIONS ON SALE OF SHARES IN THE UNITED STATES.
Microsoft will not offer to sell, exchange, transfer, pledge or otherwise
dispose of any of the Shares in the United States unless at such time at least
one of the following is satisfied:
(a) a registration statement under the Securities Act of
1933, as amended (the "1933 Act"), covering the Shares proposed to be sold,
transferred or otherwise disposed of, describing the manner and terms of the
proposed sale, transfer or other disposition, and containing a current
prospectus, shall have been filed with the SEC and made effective under the 1933
Act;
(b) such transaction shall be permitted pursuant to the
provisions of Rule 144 under the 1933 Act ("Rule 144");
(c) counsel to Microsoft reasonably acceptable to Proginet
shall have advised Microsoft that no registration under the 1933 Act would be
required in connection with the proposed sale, transfer or other disposition; or
(d) an authorized representative of the SEC shall have
rendered written advice to Microsoft (sought by Microsoft or counsel to
Microsoft after prior notice to Proginet) to the effect that the SEC would take
no
action, or that the staff of the SEC would not recommend that the SEC take
action, with respect to the proposed sale, transfer or other disposition if
consummated.
1.1.2 OBSERVATION OF BC AND 1933 ACTS. Microsoft will observe
and comply with the BC Act and 1933 Act, whichever is applicable, and the
General Rules and Regulations thereunder, as now in effect and as from to time
amended and including those hereafter enacted or promulgated, in connection with
any offer, sale, pledge, transfer or other disposition of the Shares or any part
thereof.
1.2 PROXY. Simultaneous with the execution of this Agreement, Microsoft
is executing and delivering to the President of Proginet Corporation a proxy to
vote the Shares at the next annual meeting of the shareholders of Proginet in
favor of the slate of nominees for Proginet's Board of Directors as recommended
by the existing Board of Directors.
1.3. TERMINATION OF COVENANTS AND AGREEMENTS. Except as specifically
provided in the next sentence, all covenants and agreements of the parties not
already satisfied and set forth in the Asset Purchase Agreement and the Related
Agreements are hereby terminated and of no further force or effect.
Notwithstanding the foregoing, the provisions of Sections 6.3. (BackOffice
License Rights which is extended until December 17th, 2003), 6.6
(Confidentiality Obligations) and 6.8 (Taxes) of the Asset Purchase Agreement
and the Covenant shall continue to survive (collectively, the "Surviving
Obligations"). Except for the Surviving Obligations, each party shall have no
further obligation to the other under the Asset Purchase Agreement or the
Related Agreements. For purposes of clarification, the extension of the
BackOffice License Rights set forth in this Agreement shall apply only to
Microsoft BackOffice v. 2.5 and shall not entitle Proginet to any upgrades or
subsequent versions thereof.
2. RELEASES.
2.1 PROGINET RELEASE OF MICROSOFT. Proginet hereby fully and finally
releases, acquits and forever discharges Microsoft from any and all actions,
debts, claims, counterclaims, demands, liabilities, damages, causes of action,
costs, expenses, and compensation of every kind and nature whatsoever, past,
present or future, in law or in equity, whether known or unknown (collectively,
"Claims"), which Proginet had, has, may have had at any time in the past or may
have in the future against Microsoft arising from, related to or in connection
with any representation, warranty, covenant or agreement of Microsoft
(collectively, the "Microsoft Obligations") set forth in or contemplated by the
Asset Purchase Agreement or the Related Agreements, including, without
limitation, any Claims relating to any Microsoft Obligation set forth in any
exhibit or annex to any such agreement. For purposes of this Section 2,
references to Proginet shall be deemed to include any subsidiary of Proginet and
any other entity controlled by Proginet or under common control with Proginet.
2.2 MICROSOFT RELEASE OF PROGINET. Microsoft hereby fully and finally
releases, acquits and forever discharges Microsoft from any and all actions,
debts, claims, counterclaims, demands, liabilities, damages, causes of action,
costs, expenses, and compensation of every kind and nature whatsoever, past,
present or future, in law or in equity, whether known or unknown (collectively,
"Claims"), which Microsoft had, has, may have had at any time in the past or may
have in the future against Proginet arising from, related to or in connection
with any representation, warranty, covenant or agreement of Proginet
(collectively, the "Proginet Obligations") set forth in or contemplated by the
Asset Purchase Agreement or the Related Agreements, including, without
limitation, any Claims relating to any Proginet Obligation set forth in any
exhibit or annex to any such agreement. For purposes of this Section 2,
references to Microsoft shall be deemed to include any subsidiary of Microsoft
and any other entity controlled by Microsoft or under common control with
Microsoft. Nothing contained in this Section 2.2 shall in any way release or
reduce Proginet's obligations to Microsoft arising under this Agreement.
3. PROGINET REPRESENTATIONS AND WARRANTIES. Proginet represents and warrants to
Microsoft on execution of this Agreement as follows:
3.1. ORGANIZATION; GOOD STANDING. Proginet is a corporation duly
organized, validly existing and subsisting under the laws of the State of
Delaware and is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction in which the nature of its business or the
ownership of its property makes such qualification necessary, except where the
failure to be so qualified will not have a material adverse effect on Proginet,
and has the corporate power and authority to own and lease its properties, to
carry on its business as presently conducted, and to execute, deliver and
perform its obligations under this Agreement.
3.2. DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement have been duly authorized by all requisite corporate action by
Proginet and will not violate or result in a breach of any provision of any law,
statute, rule or regulation, any order of any court or other agency, the
Certificate of Incorporation (the
"Charter") or Bylaws of Proginet (the "Bylaws"), or result in the creation or
imposition of any lien, charge or encumbrance of any nature whatsoever upon the
properties or assets of Proginet.
3.3. BINDING OBLIGATION; NO CONSENTS. This Agreement has been duly
executed and delivered by Proginet and constitutes a valid and legally binding
obligation of Proginet, enforceable in accordance with its terms, except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by general equitable principles. No registration or filing with, or consent
or approval of, or other action by, any U.S. or Canadian federal, state,
provincial or other governmental department, commission, board, bureau, agency
or instrumentality or any third party is necessary for the execution, delivery
and performance of this Agreement or for the issuance of the Shares contemplated
hereby other than those required under applicable U.S. or Canadian federal,
state or provincial securities laws (the "Securities Consents and Filings").
Proginet covenants and agrees to make and obtain all required Securities
Consents and Filings within the applicable statutory periods prescribed for such
consents and filings.
3.4. CAPITALIZATION. The authorized capital stock of Proginet consists
of 40,000,000 shares of Common Stock, of which 12,375,180 shares are issued and
outstanding, and 10,000,000 shares of Preferred Stock, of which no shares are
issued and outstanding. All of the issued and outstanding shares of capital
stock have been duly authorized and validly issued and are fully-paid and
non-assessable, and there are no preemptive rights with respect thereto. On the
date hereof, 2,000,000 shares of Common Stock were reserved for future issuance
under Proginet's Employee Stock Option Plan (the "Plan"). On the date hereof
there were no outstanding options, warrants, or other securities convertible
into or exchangeable for shares of Proginet's equity securities other than
options to purchase approximately 1,045,000 shares of Common Stock outstanding
under the Plan.
3.5. PUBLIC INFORMATION. Proginet has delivered to Microsoft copies of
all prospectuses and other public offering documents as filed with the Canadian
Commission, and all periodic and other reports filed by Proginet with the
Canadian Commission or the VSE since November 1, 1995 and copies of all proxy
statements, annual information forms and other materials distributed to
Proginet's shareholders during such period (collectively, the "Public
Information"). The Public Information is true, correct and complete in all
material respects as of the respective dates of the information set forth
therein, and the Public Information, as of its respective dates, does not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading in light of the circumstances under which such statements were made.
3.6 REPORTING ISSUER; LISTING. Proginet is a reporting issuer (as such
term is defined in applicable Canadian Legislation) only in British Columbia and
is a reporting issuer in good standing under the BC Act. No outstanding
securities of Proginet, including the common stock of Proginet, are listed on
any stock exchange other than the VSE.
4. MICROSOFT REPRESENTATIONS AND WARRANTIES. Proginet represents and warrants to
Microsoft on execution of this Agreement as follows:
4.1. ORGANIZATION; GOOD STANDING. Microsoft is a corporation duly
organized, validly existing and subsisting under the laws of the State of
Washington and is duly qualified to do business as a foreign corporation and is
in good standing in each jurisdiction in which the nature of its business or the
ownership of its property makes such qualification necessary, except where the
failure to be so qualified will not have a material adverse effect on Microsoft,
and has the corporate power and authority to own and lease its properties, to
carry on its business as presently conducted, and to execute, deliver and
perform its obligations under this Agreement.
4.2. DUE AUTHORIZATION. The execution, delivery and performance of this
Agreement have been duly authorized by all requisite corporate action by
Microsoft and will not violate or result in a breach of any provision of any
law, statute, rule or regulation, any order of any court or other agency, the
Articles of Incorporation (the "Charter") or Bylaws of Microsoft (the "Bylaws"),
or result in the creation or imposition of any lien, charge or encumbrance of
any nature whatsoever upon the properties or assets of Microsoft.
4.3. BINDING OBLIGATION; NO CONSENTS. This Agreement has been duly
executed and delivered by Microsoft and constitutes a valid and legally binding
obligation of Microsoft, enforceable in accordance with its terms, except as the
enforcement hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors' rights generally
or by general equitable principles. No registration or filing with, or consent
or approval of, or other action by, any U.S. or Canadian federal, state,
provincial or other governmental department, commission, board, bureau, agency
or instrumentality or any third party is necessary for the execution, delivery
and performance of this Agreement.
4.4 INVESTOR STATUS. Microsoft: (i) is an "accredited investor" as that
term is defined in Rule 501(a)(5) of Regulation D of the Securities Act of 1933
(the "1933 Act"); (ii) is acquiring the Shares for its own account; (iii) has
the knowledge and experience in financial and business matters and is capable of
evaluating the merits and risks of the prospective investment; and (iv) does not
intend to make a distribution of the Shares or otherwise act as an "underwriter"
within the meaning of Section 2(11) of the 0000 Xxx.
5.1 NOTICES. All notices, requests, demands or other communications which are
required or may be given pursuant to the terms of this Investment Agreement
shall be in writing and shall be deemed to have been duly given on the date of
delivery if delivered by hand or upon receipt if mailed by registered or
certified mail, postage prepaid, return requested, or sent by express courier,
or by facsimile upon written confirmation of receipt by the recipient of such
notice to the party at the address set forth below, or such other address as may
be hereafter be designated in writing by the party:
To Microsoft: To Proginet:
Microsoft Corporation Proginet Corporation
One Microsoft Way 000 Xxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000-0000 Xxxxxx Xxxx, XX 00000
Attention: General Counsel, Attention: Xxxxx X. Xxxxx
Finance and Administration Phone: (000) 000-0000
Phone: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
Copy to: Copy to:
Xxxxxxx Xxxxx & Xxxxx LLP Xxxxxx Xxxxxx Flattau and Klimpl, LLP
5000 Columbia Center 1211 Avenue of the Americas
000 Xxxxx Xxxxxx Xxx Xxxx, XX 00000
Xxxxxxx, XX 00000-0000 Attention: Xxxxx Xxxxxxxxx, Esq.
Attention: Xxxx X. Xxxxxx, Esq. Phone: (000) 000-0000
Phone: (000) 000-0000 Fax: (000) 000-0000
Fax: (000) 000-0000
6. COUNTERPARTS. This Agreement may be executed in two or more partially or
fully executed counterparts each of which shall be deemed an original and shall
bind the signatory, but all of which together shall constitute but one and the
same instrument.
7. SUCCESSORS AND ASSIGNS. This Agreement shall be enforceable by and shall
inure to the benefit of and be binding upon, the parties hereto and their
respective successors and assigns. As used herein, the terms "successors and
assigns" shall mean, where the context so permits, heirs, executors,
administrators, trustees and successor trustees, and personal and other
representatives.
8. SEVERABILITY. If any provision of this Agreement is held to be unenforceable
for any reason, such provision and all other related provisions shall be
modified rather than voided, if possible, in order to achieve the intent of the
parties to this Agreement to the extent possible. In any event, all other
unrelated provisions of this Agreement shall be deemed valid and enforceable to
the full extent.
9. CHOICE OF LAW/AVAILABILITY OF INJUNCTIVE RELIEF. This Agreement shall be
governed by the laws of the State of Washington. The parties acknowledge and
agree that any breach of this Agreement will result in irreparable harm to the
non-breaching party and its Related Parties, and each of them, and that any
breach shall entitle the non-breaching party and its Related Parties, and each
of them, to injunctive relief, among other remedies.
10. EFFECT OF HEADINGS. The section headings herein are for convenience only and
shall not affect the construction or interpretation of this Agreement.
11. PUBLIC DISCLOSURE. Proginet agrees that it will issue a press release (which
shall be solely a release of Proginet) which shall announce the terms of this
Agreement (the "Announcement"). Proginet shall give Microsoft the opportunity to
review and approve the Announcement prior to the release thereof, which approval
shall not be
unreasonably withheld. Microsoft and Proginet each agree that, other than as set
forth in the Announcement, they will make no other public disclosure of the
terms of this Agreement, the Asset Purchase Agreement or the relationship
between the parties without the express prior written consent of the other
party.
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IN WITNESS WHEREOF, the parties have entered into this Agreement as of
the date first written above.
MICROSOFT CORPORATION PROGINET CORPORATION
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