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ASSET PURCHASE AGREEMENT
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AMONG
INFORM ONLINE INC.
AND
XXXXXXXXXX.XXX INC.
AND
XXXXXX XXXXXXXXXX
TABLE OF CONTENTS
1. Purchase and Sale of Assets............................................2
1.1 Description of Assets............................................2
1.2 Exclusions.......................................................3
2. Purchase Price and Allocation..........................................3
3. Payment of the Purchase Price..........................................3
4. Non-assumption of Indebtedness.........................................3
5. Representations and Warranties of the Vendor...........................3
5.1 Capacity to Sell.................................................4
5.2 Authority to Sell................................................4
5.3 Sale Will Not Cause Default......................................4
5.4 Assets...........................................................4
5.5 Books and Records................................................4
5.6 Financial Statements.............................................5
5.7 Material Change..................................................5
5.8 Litigation.......................................................5
5.9 Conformity With Laws.............................................5
5.10 Forward Commitments..............................................6
5.11 Terms of Employment..............................................6
5.12 Material Contracts...............................................6
5.13 No Defaults......................................................7
5.14 Accuracy of Representations......................................7
5.15 Canadian Resident................................................7
5.16 Compliance with Laws.............................................7
6. Covenants of the Vendor................................................7
6.1 Determination of Net Book Values.................................7
6.2 Conduct of Business..............................................7
6.3 Change of Name...................................................8
6.4 Access by Purchaser..............................................8
6.5 Insurance........................................................8
6.6 Procure Consents.................................................8
6.7 Covenant of Indemnity............................................8
6.8 Termination of Employees.........................................9
7. Representations and Warranties of the Purchaser........................9
7.1 Status of Purchaser..............................................9
7.2 Authority to Purchase............................................9
8. Covenants of the Purchaser.............................................9
8.1 Creation of Separate Division....................................9
8.2 Financing........................................................9
8.3 Offer Employment................................................10
8.4 Social Services Tax, Goods and Services Tax and the
Income Tax Act .................................................10
8.5 Application of the Investment Canada Act........................10
8.6 Consents........................................................10
9. Survival of Representations, Warranties and Covenants.................10
9.1 Vendor's Representations, Warranties and Covenants..............10
9.2 Limitation on Vendor's Indemnity................................11
9.3 Purchaser's Representations, Warranties and Covenants...........11
10. Conditions Precedent to the Obligations of the Purchaser..............11
10.1 Vendor's Representations and Warranties.........................11
10.2 Vendor's Covenants..............................................11
10.3 Vendor's Certificate............................................11
10.4 Consents........................................................11
11. Conditions Precedent to the Obligations of the Vendor.................12
11.1 Purchaser's Representations and Warranties......................12
11.2 Purchaser's Covenants...........................................12
11.3 Consents of Third Parties.......................................12
12. Closing...............................................................12
12.1 Time of Closing.................................................12
12.2 Place of Closing................................................12
12.3 Documents to be Delivered by the Vendor.........................12
12.4 Documents to be Delivered by the Purchaser......................13
13. Post Closing Covenants................................................14
13.1 Unwinding Transaction...........................................14
13.2 Bonus...........................................................14
14. Risk Of Loss..........................................................15
15. Further Assurances....................................................15
16. Set-Off...............................................................15
17. Notice................................................................15
18. Entire Agreement......................................................15
19. Time of the Essence...................................................15
20. Applicable Law........................................................15
21. Successors and Assigns................................................16
22. Headings..............................................................16
THIS AGREEMENT is made the 26th day of November, 2001
BETWEEN:
Inform Online Inc., a company incorporated pursuant
to the laws of British Columbia and having its
business address at 000-000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
(the "Vendor")
AND:
Xxxxxxxxxx.xxx Inc., a company incorporated pursuant
to the laws of the State of Nevada and having its
address for business at Suite 100, 2980 South Rainbow
Boulevard, Las Vegas, Nevada, XXX, 00000
(the "Purchaser")
AND:
Xxxxxx Xxxxxxxxxx, of 000-000 Xxxxxxx Xxxxxx,
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
(the "Covenantor")
BACKGROUND
A. The Vendor carries on the business of supplying online media content for
advertising and other purposes (the "Vendor's Business").
B. The Vendor has agreed to sell, and the Purchaser has agreed to purchase,
all the property, assets and undertaking of the Vendor's Business, as a going
concern, on the terms and subject to the conditions provided in this Agreement.
C. The Covenantor is the sole shareholder of the Vendor, and has become a
party to this Agreement for the purpose of covenanting with the Vendor to
indemnify the Purchaser in the manner provided in this Agreement.
TERMS OF AGREEMENT
In consideration of the premises and the covenants, agreements, representations,
warranties and payments contained in this Agreement, the parties agree with the
others as follows:
1. Purchase and Sale of Assets
1.1 Description of Assets
Upon the terms and subject to the conditions of this Agreement, the Vendor
agrees to sell, assign and transfer to the Purchaser, and the Purchaser agrees
to purchase from the Vendor, as a going concern at closing, the undertaking and
all the property and assets of the Vendor's Business of every kind and
description wherever situate (except as provided in section 1.2), including,
without limiting the foregoing:
(a) the leases, leasehold property, interests in the leasehold property
and the improvements, appurtenances and fixtures on the leasehold
property (the "Leasehold Property") described in the Schedule of
Leasehold Property;
(b) the machinery and equipment, (the "Machinery and Equipment")
described in the Schedule of Machinery and Equipment;
(c) all inventories (the "Inventories");
(d) the accounts receivable and other debts owing to the Vendor in
connection with the Vendor's Business, and the full benefit of all
securities for cash accounts, notes or debts (the "Receivables");
(e) the benefit of all unfilled orders received by the Vendor in
connection with the Vendor's Business, and all other contracts,
engagements or commitments, whether written or oral, to which the
Vendor is entitled in connection with the Vendor's Business, and in
particular all right, title and interest of the Vendor in, to and
under the material agreements and contracts (the "Material
Contracts") described in the Schedule of Material Contracts;
(f) all right and interest of the Vendor to all registered and
unregistered trademarks, trade or brand names, copyrights, designs,
restrictive covenants and other industrial or intellectual property
used in connection with the Vendor's Business (the "Intangible
Property"), including, without limitation, the intangible property
described in the Schedule of Intangible Property;
(g) the prepaid expenses (the "Prepaids"); and
(h) the goodwill of the Vendor's Business and the right of the Purchaser
to represent itself as carrying on the Vendor's Business in
continuation of and in succession to the Vendor and the right to use
the name "Inform Online Inc." or any variation thereof as part of or
in connection with the Vendor's Business (the "Goodwill");
all of which are collectively called the "Assets".
1.2 Exclusions
There are no exclusions and cash on hand or on deposit shall be specifically
included in the Assets.
2. Purchase Price and Allocation
The purchase price payable by the Purchaser to the Vendor for the Assets (the
"Purchase Price") will be the issuance of 1,000,000 common shares from the
treasury of the Purchaser (the "Shares") and will be allocated to the Intangible
Property, the Material Contracts, to the Goodwill and any other of the Assets
purchased under this Agreement, in an amount determined by the Vendor.
3. Payment of the Purchase Price
The purchase price shall be paid and satisfied by the issuance of the Shares
from the treasury of the Purchaser at closing. Certificates for the Shares shall
be registered in the name of the Vendor or his nominee and delivered at closing.
The certificates for the Shares are being issued pursuant to Regulation S of the
United States Securities Act of 1933 and will therefore bear a restrictive
legend and be subject to restrictions on resale. The restrictive legend shall be
in substantially the form as follows "THE SECURITIES EVIDENCED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, OR ANY APPLICABLE STATE SECURITIES LAW. NO INTEREST THEREIN
MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED OR
DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND
APPLICABLE UNITED STATES STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION OR
(B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION STATING THAT SUCH
TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE CORPORATION OTHERWISE
SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION. NEITHER THE
OFFERING OF SUCH SECURITIES NOR ANY RELATED MATERIALS HAVE BEEN REVIEWED OR
APPROVED BY ANY U.S. FEDERAL OR STATE REGULATORY AUTHORITY. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE."
4. Non-assumption of Indebtedness
After closing the Purchaser shall not be liable to pay any liabilities or
indebtedness of the Vendor, which liabilities shall expressly be the obligation
of the Vendor.
5. Representations and Warranties of the Vendor
The Vendor represents and warrants to the Purchaser as follows, with the intent
that the Purchaser will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated by
this Agreement.
5.1 Capacity to Sell
The Vendor is a corporation duly incorporated, validly existing and in good
standing under the British Columbia Company Act with respect to the filing of
annual reports, and has the power and capacity to own and dispose of the Assets
and to carry on the Vendor's Business as now being conducted by it, and to enter
into this Agreement and carry out its terms to the full extent.
5.2 Authority to Sell
The execution and delivery of this Agreement and the completion of the
transaction contemplated by this Agreement have been duly and validly authorized
by all necessary corporate action on the part of the Vendor, including a special
resolution of the sole shareholder of the Vendor consenting to the sale of all
or substantially all of the assets of the Vendor, and this Agreement constitutes
a legal, valid and binding obligation of the Vendor enforceable against the
Vendor in accordance with its terms. 5.3 Sale Will Not Cause Default
Neither the execution and delivery of this Agreement nor the completion of
the purchase and sale contemplated by this Agreement will:
(a) violate any of the terms and provisions of the memorandum or articles
of the Vendor, or any order, decree, statute, by-law, regulation,
covenant or restriction applicable to the Vendor or any of the Assets;
(b) give any person the right to terminate, cancel or remove any of the
Assets, except to the extent that the consents of other parties are
required for the transfer of any leases described in the Leasehold
Property or the Material Contracts; or
(c) result in any fees, duties, taxes, assessments or other amounts
relating to any of the Assets becoming due or payable other than
British Columbia Social Service Tax and Excise Tax payable by the
Purchaser in connection with the purchase and sale.
5.4 Assets
The Vendor owns and possesses and has a good marketable title to the Assets free
and clear of all mortgages, liens, charges, pledges, security interest,
encumbrances and other claims, and the assets are in good working order as of
the date hereof.
5.5 Books and Records
The books and records of the Vendor fairly and correctly set out and disclose in
all material respects, in accordance with generally accepted accounting
principles in Canada, the financial position of the Vendor and all material
financial transactions of the Vendor relating to the Business have been
accurately recorded in those books and records.
5.6 Financial Statements
The Activity History of the Vendor appended hereto, is a true and accurate
representation of the activity of the Vendor since 1998. Any financial
statements prepared by the Vendor (the "Statements") have been prepared in
accordance with generally accepted accounting principles in Canada applied on a
basis consistent with those of previous fiscal years and present fairly and
correctly the assets, liabilities (whether accrued, absolute, contingent or
otherwise) and the financial condition of the Vendor as of the date of the
balance sheet included in the Statements, and the sales and earnings of the
operations of the Vendor during the period covered by the Statements. 5.7
Material Change
Since the date of any balance sheet included in the Statements there has not
been:
(a) any change in the financial condition of the Vendor's Business, its
liabilities or the Assets other than changes in the ordinary
course of business, none of which has been materially adverse;
(b) any damage, destruction, loss or other event (whether or not covered
by insurance) materially and adversely affecting the Assets or the
Vendor's Business;
(c) any material increase in the compensation payable or to become
payable by the Vendor to any of its officers, employees or agents or
any bonus, payment or arrangement made to or with any of them,
except increases agreed to in writing by the Purchaser.
5.8 Litigation
There is no litigation or administrative or governmental proceeding or inquiry
pending, or to the knowledge of the Vendor, threatened against or relating to
the Vendor, the Vendor's Business or any of the Assets, nor does the Vendor know
of any reasonable basis for any such action, proceeding or inquiry.
5.9 Conformity With Laws
All governmental licences and permits required for the conduct in the ordinary
course of the operations of the Vendor's Business and the uses to which the
Assets have been put, have been obtained and are in good standing and such
conduct and uses are not in breach of any order, decree, statute, by-law,
regulation, covenant, restriction, plan or permit, including those regulating
the discharge of materials into the environment and the storage, treatment and
disposal of waste or otherwise relating to the protection of the environment and
the health and safety of persons. For greater certainty, the Assets have not
been used in a manner which does or will give rise to any obligation of
restoration or removal or any liability for the costs of restoration or removal
or for the payment of damages to any third party. The Vendor does not own any
land, and any premises occupied by the Vendor do not contain any underground
storage tanks, toxic chemicals, hazardous materials, waste or noxious or
dangerous substances which are designated toxic or hazardous substances in
applicable federal, provincial or municipal laws, by-laws and regulations
relating to environmental matters, including asbestos, polychlorinated biphenyls
(PCBs) urea formaldehyde, radon gas or radioactive decay products of radon,
whether or not they are so designated.
5.10 Forward Commitments
All outstanding forward commitments by or on behalf of the Vendor for the
purchase or sale of the Inventories have been made in accordance with
established price lists of the Vendor or its suppliers, or if otherwise, then in
accordance with the Vendor's normal business custom in varying those established
price lists.
5.11 Terms of Employment
The Vendor is not a party to any collective agreement relating to the Vendor's
Business with any labour union or other association of employees, and no part of
the Vendor's Business has been certified as a unit appropriate for collective
bargaining. The Vendor's Business has employees and group employee termination
legislation would not apply to a termination of all employees at one time.
Additionally, every employee may be dismissed on one year's notice or less,
without further liability.
5.12 Material Contracts
The Schedule of Material Contracts contains a true and correct listing of each
written or oral contract of the following types to be acquired or assumed by the
Purchaser:
(a) contracts or commitments out of the ordinary course of business;
(b) contracts or commitments involving an obligation to pay in the
aggregate $1,000 or more or of a duration greater than one year;
(c) contracts or commitments affecting ownership of, or title to, or any
interest in real estate or in personal property;
(d) contracts or commitments in respect of the Intangible Property;
(e) except as required by statute or regulation, contracts or commitments
in respect of bonuses, incentive compensation, pensions, group
insurance or employee welfare plans, all of which are fully funded
as determined by an independent and reputable firm of actuaries
employed by the Vendor;
(f) employment contracts or commitments other than unwritten employment
contracts of indefinite duration entered into in the ordinary course
of the Vendor's Business.
5.13 No Defaults
Except as otherwise expressly disclosed in this Agreement or in any Schedule to
this Agreement there has not been any default in any obligation to be performed
under any Material Contract, each of which is in good standing and in full force
and effect, unamended, except as set forth in the Schedule of Material
Contracts.
5.14 Accuracy of Representations
No certificate furnished by or on behalf of the Vendor to the Purchaser at
closing in respect of the representations, warranties or covenants of the Vendor
will contain any untrue statement of a material fact or omit to state a material
fact necessary to make the statements contained in the certificate not
misleading.
5.15 Canadian Resident
The Vendor is not a non-resident of Canada within the meaning of the Income Tax
Act.
5.16 Compliance with Laws
The Vendor agrees that he will not offer, sell or otherwise transfer, pledge or
hypothecate any of the Shares or any shares issued in accordance with section
13.2 other than pursuant to an effective Registration Statement under the
Securities Act of 1933 (United States), as amended, directly or indirectly
unless: (a) the sale is to the Purchaser; or, (b) the sale is made pursuant to
the exemption from registration under the Securities Act of 1933 (United States)
provided by Rule 144 thereunder; or the Shares are sold in a transaction that
does not require registration under the Securities Act of 1933 (United States)
or any applicable United States state laws and regulations governing the offer
and sale of securities, and the Vendor has furnished to the Purchaser an opinion
of counsel to that effect or such other written documentation as may be
reasonably required by the Purchaser.
6. Covenants of the Vendor
6.1 Determination of Net Book Values
The Vendor shall determine as of the day immediately preceding closing, the net
book value of the Receivables, Inventories and Prepaids in accordance with the
accounting principles set forth in the Schedule of Accounting Principles, and
furnish to each of the Vendor and Purchaser a certificate of such determination
in the form described in that Schedule.
6.2 Conduct of Business
Until closing, the Vendor shall conduct the Vendor's Business diligently and
only in the ordinary course and will use its best efforts to preserve the Assets
intact and in good working order, to keep available to the Purchaser its present
employees and to preserve for the Purchaser its relationship with its suppliers,
customers and others having business relations with it.
6.3 Change of Name
The Vendor shall, within 10 days after closing, change its name to a name that
does not include any of the words "Inform Online".
6.4 Access by Purchaser
The Vendor shall give to the Purchaser and Purchaser's counsel, accountants and
other representatives full access, during normal business hours throughout the
period prior to closing, to all of the properties, books, contracts, commitments
and records of the Vendor relating to the Vendor's Business and the Assets, and
shall furnish to the Purchaser during that period all such information as the
Purchaser may reasonably request.
6.5 Insurance
From the date of this Agreement until closing, the Vendor shall maintain in full
force and effect the policies of insurance more particularly described in the
Schedule of Insurance in respect of the Assets and shall forthwith cause the
Purchaser to be added as a named insured under all such policies and to remain
as a named insured until closing.
6.6 Procure Consents
The Vendor shall diligently take all reasonable steps required to obtain, before
closing, all consents to the assignments of the Leasehold Properties, the
Material Contracts and any other of the Assets for which a consent is required.
6.7 Covenant of Indemnity
The Vendor and the Covenantor shall jointly and severally indemnify and hold
harmless the Purchaser from and against:
(a) any and all liabilities, whether accrued, absolute, contingent or
otherwise, existing at closing and which are not agreed to be
assumed by the Purchaser under this Agreement;
(b) any and all damage or deficiencies resulting from any
misrepresentation, breach of warranty or non-fulfilment of any
covenant on the part of the Vendor under this Agreement or from any
misrepresentation in or omission from any certificate or other
instrument furnished or to be furnished to the Purchaser under this
Agreement; and
(c) any and all claims, actions, suits, demands, costs and legal and
other expenses incident to any of the foregoing.
6.8 Termination of Employees
At closing the Vendor shall terminate the employment of all employees to whom
the Purchaser has made an offer of employment under section 8.3, and the Vendor
shall indemnify and save harmless the Purchaser from and against all claims by
any employee of the Vendor for wages, salaries, bonuses, pension or other
benefits, severance pay, notice or pay in lieu of notice and holiday pay in
respect of any period before closing.
7. Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Vendor as follows, with the intent
that the Vendor will rely on these representations and warranties in entering
into this Agreement, and in concluding the purchase and sale contemplated by
this Agreement.
7.1 Status of Purchaser
The Purchaser is a corporation duly incorporated, validly existing and in good
standing under the Corporations Act of the State of Nevada, United States of
America, with respect to the filing of annual returns, and has the power and
capacity to enter into this Agreement and carry out its terms.
7.2 Authority to Purchase
The execution and delivery of this Agreement and the completion of the
transaction contemplated by this Agreement have been duly and validly authorized
by all necessary corporate action on the part of the Purchaser, and this
Agreement constitutes a legal, valid and binding obligation of the Purchaser
enforceable against the Purchaser in accordance with its terms except as limited
by laws of general application affecting the rights of creditors.
8. Covenants of the Purchaser
8.1 Creation of Separate Division
After closing of the transaction, the Purchaser shall create a separate division
or entity ("NewInform") and shall place the Assets, employees and management of
the Vendor in NewInform. Notwithstanding that the financial statements of New
Inform shall be consolidated with the financial statements of the Purchaser, the
accounting and financial books and records of NewInform shall be kept separate
from those of the Purchaser and a separate set of financial statements shall be
prepared for NewInform.
8.2 Financing
The purchaser will use best efforts to provide initial financing of $500,000
Cdn, by February 28, 2002, to allow NewInform the ability to persue an agreement
with a major client such as an elevator company to supply dynamic realtime media
content and source out other components to the agreement such as the hardware
requirements for the major client such as elevator company's `in -cab"
television screens, in China and North America. The purchaser will also provide
best efforts financing of $500,000 Cdn within year one. 8.3 Offer Employment
The Purchaser covenants with the Vendor to offer employment at closing on terms
and conditions then in effect to such employees of the Vendor then employed in
connection with the Vendor's Business, as agreed in writing at closing between
the Vendor and Purchaser.
8.4 Social Services Tax, Goods and Services Tax and the Income Tax Act
The Purchaser will be liable for and shall pay all provincial sales taxes and
registration charges and transfer fees properly payable upon and in connection
with the sale and transfer of the Assets by the Vendor to the Purchaser. At
closing, each of the Purchaser and the Vendor shall make the elections provided
for by s. 167 of the Excise Tax Act and s. 22 of the Income Tax Act,
respectively, in the forms attached as the Schedule of GST Election and the
Schedule of Accounts Receivable Election.
8.5 Application of the Investment Canada Act
The Purchaser shall forthwith prepare and file with the Director of Investments
under the Investment Canada Act all necessary notices (if any) and applications
to obtain approval for the purchase of the Assets.
8.6 Consents
The Purchaser shall at the request of the Vendor execute and deliver such
applications for consent and such assumption agreements, and provide such
information as may be necessary to obtain the consents referred to in section
6.6 and will assist and co-operate with the Vendor in obtaining the consents.
9. Survival of Representations, Warranties and Covenants
9.1 Vendor's Representations, Warranties and Covenants
All statements contained in any certificate or other instrument delivered by or
on behalf of the Vendor under this Agreement or in connection with the
transaction contemplated by this Agreement shall be deemed to be representations
and warranties by the Vendor. All representations, warranties, covenants and
agreements made by the Vendor in this Agreement or under this Agreement shall,
unless otherwise expressly stated, survive closing and any investigation at any
time made by or on behalf of the Purchaser, subject to section 9.2, and shall
continue in full force and effect for the benefit of the Purchaser.
9.2 Limitation on Vendor's Indemnity
No claim by the Purchaser under the covenant of indemnity contained in section
6.7 or for damages or other relief in respect of misrepresentation or breach of
warranty, covenant or agreement by the Vendor under this Agreement will be valid
unless:
(a) written notice of the claim is given by the Purchaser to the Vendor
before the expiration of 30 months after closing; and
(b) the aggregate amount of all such claims exceeds $5,000.
9.3 Purchaser's Representations, Warranties and Covenants
All representations, warranties, covenants and agreements made by the Purchaser
in this Agreement or under this Agreement shall, unless otherwise expressly
stated, survive closing and any investigation at any time made by or on behalf
of the Vendor, and shall continue in full force and effect for the benefit of
the Vendor.
10. Conditions Precedent to the Obligations of the Purchaser
All obligations of the Purchaser under this Agreement are subject to the
fulfilment at or before closing of the following conditions:
10.1 Vendor's Representations and Warranties
The Vendor's representations and warranties contained in this Agreement and in
any certificate or document delivered under this Agreement or in connection with
the transactions contemplated by this Agreement will be true at and as of
closing as if such representations and warranties were made at and as of such
time.
10.2 Vendor's Covenants
The Vendor will have performed and complied with all agreements, covenants and
conditions required by this Agreement to be performed or complied with by it
before or at closing.
10.3 Vendor's Certificate
The Vendor will have delivered to the Purchaser a certificate of the President
and Secretary of the Vendor, dated the time of closing, certifying in such
detail as the Purchaser may specify to the fulfilment of the conditions set
forth in sections 10.1 and 10.2.
10.4 Consents
The Purchaser will have received duly executed copies of the consents or
approvals referred to in section 6.6.
The foregoing conditions are for the exclusive benefit of the Purchaser and any
such condition may be waived in whole or in part by the Purchaser at or before
closing by delivering to the Vendor a written waiver to that effect signed by
the Purchaser.
11. Conditions Precedent to the Obligations of the Vendor
All objections of the Vendor under this Agreement are subject to the
fulfilment, before or at closing, of the following conditions:
11.1 Purchaser's Representations and Warranties
The Purchaser's representations and warranties contained in this Agreement will
be true at and as of closing as though such representations and warranties were
made as of such time.
11.2 Purchaser's Covenants
The Purchaser will have performed and complied with all covenants, agreements
and conditions required by this Agreement to be performed or complied with by it
at or before closing.
11.3 Consents of Third Parties
All consents or approvals required to be obtained by the Vendor for the purpose
of selling, assigning or transferring the Assets will have been obtained,
provided that this condition may only be relied upon by the Vendor if the Vendor
has diligently exercised its best efforts to procure all such consents or
approvals and the Purchaser has not waived the need for all such consents or
approvals.
Each of the foregoing conditions is for the exclusive benefit of the Vendor and
any such condition may be waived in whole or part by the Vendor at or before
closing by delivering to the Purchaser a written waiver to that effect signed by
the Vendor.
12. Closing
12.1 Time of Closing
Subject to the terms and conditions of this Agreement, the purchase and sale of
the Assets will be completed at a closing to be held at 11:00 a.m., local time
in Vancouver, on November 30, 2001 or at such other time and date agreed upon in
writing between the parties (the "Time Of Closing").
12.2 Place of Closing
The closing will take place at the offices of the Purchaser at the address
noted above.
12.3 Documents to be Delivered by the Vendor
At the closing the Vendor will deliver or cause to be delivered to the
Purchaser:
(a) all deeds of conveyance, bills of sale, transfer and assignments, in
form and content satisfactory to the Purchaser's counsel, appropriate
to effectively vest a good and marketable title to the Assets in the
Purchaser to the extent contemplated by this Agreement, and
immediately registrable in all places where registration of such
instruments is required;
(b) all consents or approvals obtained by the Vendor for the purpose of
validly assigning the Leasehold Property and the Material Contracts;
(c) possession of the Assets;
(d) the certificate of the President and Secretary of the Vendor to be
given under section 10.3;
(e) the elections under s. 167 of the Excise Tax Act and s. 22 of the
Income Tax Act in the forms attached as the Schedule of GST Election
and the Schedule of Accounts Receivable Election, respectively;
(f) duly executed releases of, or evidence to the reasonable satisfaction
of the Purchaser as to the discharge of any and all liabilities which
the Purchaser has not agreed to assume and which may be enforceable
against any of the Assets being purchased under this Agreement;
(g) certified copies of those resolutions of the shareholders and
directors of the Vendor required to be passed to authorize the
execution, delivery and implementation of this Agreement and of all
documents to be delivered by the Vendor under this Agreement;
(h) the certificate of the Vendor prepared under section 6.1; and
(i) a restrictive covenant agreement in the form attached as Schedule of
Restrictive Covenant Agreement.
12.4 Documents to be Delivered by the Purchaser
At the closing the Purchaser will deliver or cause to be delivered:
(a) a covenant of the Purchaser in favour of the Vendor agreeing to assume
and pay or perform and indemnify the Vendor against the Assumed
Indebtedness and other obligations agreed to be assumed by the
Purchaser under this Agreement in the manner and to the extent
provided in this Agreement;
(b) the elections under s. 167 of the Excise Tax Act and s. 22 of the
Income Tax Act in the forms attached as the Schedule of GST Election
and the Schedule of Accounts Receivable Election, respectively;
(c) a certificate or certificates representing the Shares;
13. Post Closing Covenants
13.1 Unwinding Transaction
If on or before June 30, 2002, the new division or entity is unable to reach
agreement with a major client such as an elevator company to supply online media
content the Purchaser may in its sole discretion elect by notice in writing to
the Vendor to return the Assets to the Vendor. Upon such notice in writing being
given, the Vendor will deliver a promissory note for all amounts advanced by the
Purchaser to the new division or entity up to the date of notice, the
certificates for the Shares will be returned to the Purchaser, and the Assets
will be returned to the Vendor.
13.2 Bonus
If NewInform's Earnings Before Income Taxes, Depreciation and Amortization
(EBITDA) are at least $1,800,000 (U.S.$) for the twelve months ending December
31, 2002, the Purchaser will issue to the Vendor such additional shares of
Purchaser's common stock as may be determined by the following formula:
EBITDA x 2
----------
A
Where A = the average closing prices of the Purchaser's common stock
on the OTC Bulletin Board for the ten trading days ending on
January 15, 2003.
If NewInform's EBITDA is not $1,800,000 (U.S.$) for the twelve months ending
December 31, 2002, but is at least $4,600,000 for the twelve months ending
December 31, 2003, the Purchaser will issue to the Vendor such additional shares
of Purchaser's common stock as may be determined by the following formula:
Where A = the average closing prices of the Purchaser's common stock
on the OTC Bulletin Board for the ten trading days ending on
January 15, 2004.
Except as provided in this section 13.2, neither Vendor or the Covenantor will
be entitled, pursuant to the terms of the Asset Purchase Agreement, to receive
any additional shares of the capital stock of the Purchaser or NewInform.
14.
Risk Of Loss
From the date of this Agreement to closing, the Assets will be and remain at the
risk of the Vendor. If any of the Assets are lost, damaged or destroyed before
closing, the Purchaser may, in lieu of terminating this Agreement under Article
10, elect by notice in writing to the Vendor to complete the purchase to the
extent possible without reduction of the purchase price, in which event all
proceeds of any insurance or compensation in respect of such loss, damage or
destruction will be payable to the Purchaser and all right and claim of the
Vendor to any such amounts not paid by closing will be assigned to the
Purchaser.
15. Further Assurances
The parties will execute such further and other documents and do such further
and other things as may be necessary to carry out and give effect to the intent
of this Agreement.
16. Set-Off
If, under this Agreement or any document delivered under this Agreement, the
Vendor becomes obligated to pay any sum of money to the Purchaser, then such sum
may at the election of the Purchaser, and without limiting or waiving any right
or remedy for the Purchaser under this Agreement, be set off against and will
apply to any sum of money or security owed by the Purchaser to the Vendor until
such amount has been completely set off.
17. Notice
All notices required or permitted to be given under this Agreement will be in
writing and personally delivered to the address of the intended recipient set
forth on the first page of this Agreement or at such other address as may from
time to time be notified by any of the parties in the manner provided in this
Agreement.
18. Entire Agreement
This Agreement constitutes the entire agreement between the parties and there
are no representations or warranties, express or implied, statutory or otherwise
and no collateral agreements other than as expressly set forth or referred to in
this Agreement.
19. Time of the Essence
Time will be the essence of this Agreement.
20. Applicable Law
This Agreement will be governed by and interpreted in accordance with the laws
of British Columbia.
21. Successors and Assigns
This Agreement will enure to the benefit of and be binding upon the parties and
their respective successors and assigns.
22. Headings
The headings appearing in this Agreement are inserted for convenience of
reference only and will not affect the interpretation of this Agreement.
AS EVIDENCE OF THEIR AGREEMENT the parties have executed this Agreement as of
the day and year first above written.
XXXXXXXXXX.XXX INC.
Per: /s/ Xxxxxxx Xxxx
-------------------------------
Authorized Signatory
INFORM ONLINE INC.
Per: /s/ Xxxxxx Xxxxxxxxxx
-------------------------------
Authorized Signatory
/s/ Xxxxxx Xxxxxxxxxx
--------------------------
XXXXXX XXXXXXXXXX
T. Gameweaver Asset Purch Agree Inform 2-27-02
