EXHIBIT 1
THIS PURCHASE AGREEMENT MADE WITH EFFECT AS OF THE 29TH DAY OF JULY,
1999.
A M O N G S T:
NICOLLET PROCESS ENGINEERING, INC.
a corporation incorporated under the
laws of the state of Minnesota
(hereinafter called the "Corporation")
OF THE FIRST PART;
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TECHINSPIRATIONS INC. (CAYMAN),
a Cayman Island corporation
(hereinafter referred to as the "Investor")
OF THE SECOND PART.
RECITALS:
1. The Corporation and TECHinspiration Inc., a Nevada corporation ("TECH")
that is associated with the Investor, entered into a certain letter
agreement with effect as of the 30th day of November 1998 (the "Letter
of Intent") whereby TECH agreed to furnish the Investor to purchase
certain securities of the Corporation (the "Original Securities")
consisting of, inter alia:
(a) 1,500,000 shares of preferred stock of the
Corporation at a price of $1,500,000 convertible into
common stock of $0.01 par value (the "Common Stock")
of the Corporation on a 1: 6 2/3 ratio;
(b) a warrant (the Preferred Stock Warrant") permitting
the Investor to purchase for $1,500,000 an additional
1,500,000 shares of the aforesaid preferred stock of
the Corporation similarly convertible to Common
Stock;
(c) a warrant (the "Common Stock Warrant") permitting the
Investor to purchase up to 4,750,000 shares of Common
Stock of the Corporation at an exercise price of
$0.15 per share, the exercise of such right being
dependent upon achievement of certain thresholds in
the trading price of the Corporation's Common Stock;
and
(d) certain secured debt (the "Secured Debt")of the
Corporation through which the Investor would provide
loans of up to $1,500,000 under a revolving operating
line of credit (the "Credit Facility");
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2. Pursuant to the provisions of the Letter of Intent, the Corporation
agreed to pay certain fees to TECH at the rate of $25,000/month which
fees have either been paid or accrued payable by the Corporation to the
30th day of June, 1999;
3. The proxy statement circulated to the Shareholders of the Corporation
in conjunction with the Corporation's annual and special meeting of
shareholders held on or around April 2nd 1999, disclosed the
transactions with the Investor on the basis set out in the Letter of
Intent including, without limitation, the issue and sale of the
Securities to the Investor and at that meeting the Shareholders
approved amendments to the share capital of the Corporation sufficient
to accommodate that transaction;
4. As of the date of this Agreement, the Investor has advanced in excess
of $3 million plus accrued interest thereon (the "Debt") to the
Corporation by way of loan under the secured Credit Facility as
purchased from Norwest Business Credit, Inc;
5. The Investor has agreed to bypass its purchase of Preferred Stock and
its right to receive the Preferred Stock Warrant and, in lieu thereof,
has agreed to purchase directly the underlying securities (in each case
being shares of the Common Stock of the Corporation) at the conversion
price of $0.15 per share as agreed in the Letter of Intent and as
intended to be stipulated in the terms and conditions of the Preferred
Stock and Preferred Stock Warrant;
6. Accordingly, this Agreement sets out the terms and conditions whereby
the Investor will purchase from the Corporation the following
securities: (x) 20 million shares of the Common Stock of the
Corporation, for a purchase price of $0.15 per share, or $3 million in
the aggregate; (y) the Common Stock Warrant for $100.00 (including the
right to purchase shares of Common Stock underlying the Common Stock
Warrant); and (z) the Secured Debt. Upon completion of the transactions
contemplated hereby, the Parties will be deemed to have waived any
entitlements to receive, or obligation to issue, the Preferred Stock
and Preferred Stock Warrant contemplated by the Letter of Intent.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the
premises and the mutual covenants hereinafter contained, the parties hereto
agree as follows:
ARTICLE 1 - INTERPRETATION
1.1 DEFINED TERMS
Capitalized terms denoting defined terms used in this Agreement that
are not defined in the recitals or body to this Agreement shall bear
the meanings attributable to them in Schedule 1.1 to this Agreement.
1.2 CURRENCY
All dollar amounts referred to in this Agreement are in the lawful
currency of the United States of America ($US).
1.3 TIME
Time shall be of the essence of this Agreement and of every part
hereof.
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1.4 HEADINGS
The division of this Agreement into sections, clauses and subclauses
and the insertion of headings are for convenience of reference only and
shall not affect the construction or interpretation hereof.
1.5 SCHEDULES
The following are the Schedules attached to and incorporated in this
Agreement by reference and deemed to be part hereof:
SCHEDULE DESCRIPTION
1.1 Definitions
1.1(j) Closing Agenda
2.1(b) Common Stock Warrant
3.3 Exceptions, if any, to Representations and Warrantie
3.3(q) NPE System Description
3.3(x) Clients
1.6 JURISDICTIONS
This Agreement shall be construed in accordance with, and the rights of
the parties hereto shall be governed by, the laws of the state of
Minnesota. Each of the parties hereto hereby irrevocably attorns to the
jurisdiction of the courts of the state of Minnesota.
1.7 CONSTRUCTION
In this Agreement:
(a) words denoting the singular include the plural and vice versa
and words denoting any gender include all genders;
(b) the word "including" shall mean "including without limitation";
(c) any reference to a statute shall mean the statute in force as
at the date hereof and any regulation in force thereunder,
unless otherwise expressly provided;
(d) the use of headings is for convenience of reference only and
shall not affect the construction of this Agreement;
(e) when calculating the period of time within which or following
which any act is to be done or step taken, the date which is
the reference day in calculating such period shall be
excluded. If the last day of such period is not a Business
Day, the period shall end on the next Business Day;
(f) any tender of documents under this Agreement may be made upon
the parties or their respective counsel; and
(g) words or abbreviations which have well known or trade meanings
are used herein in accordance with their recognized meanings.
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1.8 ACKNOWLEDGEMENT
Each of the Parties hereto acknowledges and agrees that the recitals to
this Agreement are true in substance and in fact and are incorporated
into this Agreement.
1.9 LETTER OF INTENT
The Transaction Documents herein are being executed and delivered on
the date hereof in furtherance of the implementation of transactions
contemplated in the Letter of Intent. The parties to this Agreement,
and the remaining party to the Letter of Intent (being TECH) by it's
consent endorsed at the end of this Agreement, acknowledge and agree
that the Letter of Intent is superseded and replaced by the Transaction
Documents herein and that, subject to Section 2.3 hereof, the Letter of
Intent is hereby terminated without further benefit to or liability of
the parties thereto.
ARTICLE 2- PURCHASE OF SHARES, FUNDAMENTAL AGREEMENTS
2.1 SUBSCRIPTION
Subject to the terms and conditions hereof, the Investor hereby subscribes
irrevocably for and agrees to purchase from the Corporation, and the Corporation
agrees to issue to the Investor:
(a) 20 million shares of the Common Stock of the Corporation
"Purchased Common Shares"). The subscription price (the "Share Purchase
Price") for the Purchased Common Shares shall be $0.15 per share, or $3
million in the aggregate; and
(b) the Common Stock Warrant, in or substantially in the former thereof
annexed as Schedule 2.1 (b) hereto for a purchase price (the "Warrant
Purchase Price", and together with the Share Purchase Price sometimes
collectively referred to as the "Purchase Price") of $100.
2.2 PAYMENT
Payment of the Purchase Price shall be made at the Time of Closing on the
Closing Date and shall be made by the Investor tabling its irrevocable direction
to convert $3,000,100 of the Debt owed by the Corporation to the Investor in
full satisfaction of the Purchase Price pursuant to the Conversion Agreement,
dated the date hereof, between the Corporation and the Investor.
2.3 FURTHER SUPPORT
Notwithstanding the provisions of Section 1.9, it is acknowledged that the
Transaction Documents include, and coincidentally with the execution and
delivery of this Agreement there has been executed and delivered, a consulting
agreement between the Corporation and TECH providing for the consulting services
of the TECH to be rendered to the Corporation. It is further acknowledged that,
to the extent there remains any portion of the fee payable by the Corporation to
TECH under section C.1(a) of the Letter of Intent that is unpaid, the same shall
remain a continuing and effective obligation of the Corporation to TECH and the
same shall be paid by the Corporation to TECH forthwith after the date hereof,
notwithstanding the provisions of section 1.9 above.
2.4 CREDIT FACILITY
The parties acknowledge and agree that coincidentally with the Closing of the
transactions contemplated by this Agreement, the parties have executed and
delivered the security and other
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agreements set out in Section B of the Closing Agenda, being the `Secured
Debt' referred to in the definition herein of `Securities'. It is
acknowledged that the Investor has fulfilled its obligation to provide an
operating line of credit to the Corporation in the manner contemplated under
the Letter of Intent. It is further acknowledged that the Investor may in its
sole discretion, but need not, supply additional operating credit to the
Corporation and that, if it does so, such additional credit shall be secured
by the Securities delivered pursuant to section B of the Closing Agenda.
2.5 REGISTRATION RIGHTS
If the Corporation shall receive from the Investor at any time after the Closing
Date, a written request that the Corporation effect any registration under the
Securities Act of 1933, as amended (the "Securities Act") with respect to the
Purchased Common Shares or the Common Stock underlying the Common Stock Warrant
(provided that the Investor, if it is not already done so, exercises the Common
Stock Warrant in respect of such underlying Common Stock for which registration
is requested) then, with respect to such Purchased Common Stock and underlying
Common Stock (collectively, the Registrable Securities") the Corporation shall,
as soon as a practical , use its commercially reasonable efforts to effect such
registration in accordance with this Agreement (including, without limitation,
the execution of an undertaking to file post -- effective amendments,
appropriate qualifications under applicable blue sky or other state securities
laws, and appropriate compliance with applicable regulations issued under the
Securities Act as may be so requested and as would permit or facilitate the sale
and distribution of all such Registrable Securities as are specified in such
request). Notwithstanding the foregoing, the Corporation shall not be obligated
to effect, or take any action to effect, any such registration pursuant to this
Section: if, upon receipt of a registration request pursuant to this Section,
the Corporation is advised in writing (with a copy to the Investor) by a
recognized regional or national independent investment banking firm selected by
the Corporation that, in such firms opinion, a registration at the time and on
the terms requested would adversely affect any public offering of securities of
the Corporation by the Corporation with respect to which the Corporation has
commenced preparation of a registration prior to the receipt of a registration
request for the Investor pursuant to this Section, then the Corporation shall
not be required to effect a registration pursuant to this Section until the
earlier of (x) 30 days after the completion of the Corporation's offering, (y)
promptly after abandoned meant of the Corporation's offering, or (z) 60 days
after the date of receipt of a registration request by the Investor pursuant to
this Section.
The Investor may request registration from time to time hereunder in respect of
any Purchased Common Shares or the Common Stock underlying the Common Stock
Warrant that have not previously been subject to a registration request, or that
have been so subject to a registration request and for any reason were withdrawn
from registration or were not distributed during the effectiveness of the
relevant registration statement; provided however, that the Investor may not
request registration pursuant to this Agreement more frequently than once every
twelve (12) months. All registration expenses incurred in connection with any
registration, qualification or compliance pursuant to this Agreement shall be
borne by the Corporation.
2.6 UNDERWRITING
If any registration request hereunder is to be conducted by an underwriter, the
Investor and the Corporation shall enter into underwriting and related
agreements in customary form with the representatives of the underwriter or
underwriters selected for the underwriting of such distribution by the Investor
and reasonably acceptable to the Corporation. Such underwriting agreement will
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contain such representations and warranties by the Corporation and such other
terms and provisions as are customarily contained in underwriting agreements
with respect to secondary distributions, including without limitation,
indemnities and contribution and the provision of opinions of counsel and
accountants letters in accordance with customary practice. The said
representations and warranties by, and the other agreements on the part of, the
Corporation and such opinions and accountants letter to and for the benefit of
such underwriters shall also be made to and for the benefit of the Investor. The
Corporation shall cooperate fully with the Investor and the underwriters in
connection with any underwritten offering. Notwithstanding any other provisions
of this Agreement, if the representative of the underwriter advises the Investor
in writing that market factors require a limitation on the number of the shares
to be underwritten, the number of shares included in the registration by the
Investor shall be reduced by such minimum number of shares as is necessary to
comply with such request; and no Registrable Securities or any other securities
excluded from the underwriting by reason of the underwriters marketing
limitation shall be included in such registration.
2.7 REGISTRATION PROCEDURES
The Corporation shall execute such further and other documents, instruments and
agreements and shall do or cause to be done such further acts or things as made
be necessary to give effect to the full nature and intent of section 2.5 and 2.6
hereof, and as may be necessary to keep the Investor and the underwriter fully
informed (with copies of all relevant documents and drafts thereof) of the
Corporation's progress on such registration request.
In addition, and without limiting the foregoing, the Corporation will:
(a) Keep such registration effective for a period of three months, or until
the Investor has completed the distribution described in the
registration statement relating thereto, whichever occurs first;
(b) Provide the underwriters and the Investor no less than five business
days to review and comment upon any registration statement, prospectus,
or supplemental documents prior to the filing thereof and accommodate
any reasonable comments thereon;
(c) Make available at all reasonable times for inspection and review by the
Investor, any underwriter, and any attorney or accountant retained by
the Investor or any underwriter, all financial and other records,
pertinent corporate documents and properties of the Corporation and any
document relevant to the registration and cause the officers, directors
and employees of the Corporation to supply all information reasonably
requested by the Investor, any such underwriter, attorney or accountant
in connection with such registration and whether before or after the
filing of the applicable registration statement or the effectiveness of
the applicable registration statement;
(d) Use its commercially reasonable efforts to register or qualify all
Registrable Securities covered by such registration under such other
securities or blue sky laws of such states of the United States of
America where an exemption is not available and as the sellers of
Registrable Securities covered by such registration shall reasonably
request and to keep such registration or qualification in effect for so
long as the applicable registration statement remains in effect;
(e) use its commercially reasonable efforts to obtain the withdrawal of any
order suspending the
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effectiveness of any such registration, or the lifting of any
suspension of the qualification (or exemption from qualification) of
any of the Registrable Securities for sale in any jurisdiction;
(f) Use its commercially reasonable efforts to cause all Registrable
Securities included in any registration pursuant hereto to be listed on
each securities exchange on which securities of the same class are then
listed, or, if not then listed on any securities exchange, to be
eligible for trading in any over-the-counter market or trading system
in which the Corporation's securities of the same class are then
traded.
2.8 OTHER MATTERS
In the event of any registration of shares of Common Stock pursuant to Section
2.5, the Corporation shall indemnify the Investor, its officers and directors
and each person, if any, who controls such holder within the meaning of Section
15 of the Securities Act against all losses, claims, damages and liabilities
caused by any untrue statement or alleged untrue statement of a material fact
contained in any registration statement or prospectus (and as amended or
supplemented) relating to such registration, or caused by any omission or
alleged omission 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 they are made unless such statement or omission was
made in reliance upon and in conformity with information furnished in writing to
the Corporation by such holder expressly for use therein. The obligations of the
Corporation to register any of its securities in accordance with the foregoing
shall be subject to the condition that each holder shall agree in writing to
indemnify the Corporation, its officers and directors, and each person, if any,
who controls the Corporation within the meaning of Section 15 of the Securities
Act, and each underwriter of the Registrable Securities so registered, and each
person, if any, who controls such underwriter within the meaning of Section 15
of the Securities Act, with respect to losses, claims, damages and liabilities
caused by any untrue statement or omission made in reliance upon and in
conformity with information furnished in writing by such holder to the
Corporation expressly for use in such registration statement or prospectus. The
costs and expenses, if any, incurred by the Corporation in connection with any
registration made pursuant to Section 2.5, including but not limited to legal
fees, special audit fees, printing expenses, filing fees, fees and expenses
relating to qualifications under state securities or blue sky laws and the
premiums for insurance shall be borne entirely by the Corporation; provided,
however, that the Investor shall bear its own underwriting discounts and
commissions and the fees and expenses of its own counsel or accountants in
connection with any such registration. The Investor, with respect to the
distribution of Registrable Securities to be included in any registration, shall
furnish to the Corporation such information regarding the Investor and the
distribution proposed by such Investor as the Corporation may reasonably request
in writing and as shall be reasonably required in connection with any
registration, qualification or compliance referred to in this Agreement.
Notwithstanding any other provision contained in the sections 2.5, 2.6, 2.7, or
2.8, if the board of directors of the Corporation determines in good faith that
it is in the best interests of the Corporation not to disclose the existence of
facts surrounding any proposed or pending acquisition, disposition, strategic
alliance or financing transaction involving the Corporation, the Corporation may
by notice to the Investor in writing postpone any registration request for such
period of time that the Board of Directors may reasonably determined, but in no
event for a period exceeding 60 days.
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ARTICLE 3- REPRESENTATIONS, WARRANTIES AND INDEMNITIES
3.1 THE INVESTOR'S REPRESENTATIONS AND WARRANTIES
The Investor hereby represents and warrants to the Corporation that the
following representations are true and correct at the Time of Closing.
The Investor acknowledges and confirms that the Corporation is relying
upon such representations and warranties in connection with the
issuance of the Securities to the Investor and the completion of the
transactions contemplated under the Agreement.
GOOD STANDING
(a) The Investor is a Cayman Island corporation duly constituted
and validly subsisting under the laws of the Cayman Islands;
INVESTOR AUTHORITY
(b) The Investor has power and authority to enter into and perform
its obligations under this Agreement and all other Transaction
Documents executed and delivered by the Investor in
furtherance of the Closing of the transactions contemplated
under this Agreement including, without limitation, to
subscribe for the Securities in accordance with the terms of
this Agreement;
AGREEMENT BINDING
(c) Each of the Transaction Documents delivered by the Investor on
or before the Closing Date are, valid and legally binding
obligations of the Investor enforceable in accordance with
their respective terms except that: (i) the enforcement
thereof may be limited by bankruptcy, insolvency and other
laws effecting the enforcement of credits' rights generally,
(ii) rights of indemnity, contribution and waiver of
contribution thereunder may be limited under applicable law
and (iii) equitable remedies, including, without limitation,
specific performance and injunctive relief, may be granted
only in the discretion of a court of competent jurisdiction.
Neither the execution of this Agreement, or such other
Transaction Documents by the Investor, nor the performance by
the Investor of the various terms and provisions hereof and
thereof, will violate the trust instruments constituting the
Investor. The Investor is not a party to, subject to or bound
by any judgment, injunction or decree of any court or
government body that prevents the performance of this
Agreement, or any document referred to herein;
COMMISSIONS
(d) No commissions or brokerage or finders fees are payable by the
Corporation, through or on account of any acts of the Investor
or its representatives in connection with this Agreement or
the Closing Documents;
SECURITIES MATTERS
(e) The Investor:
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(i) is subscribing for the Securities to be issued to be
held for its own account not for the purpose of
distributing the same in specie to any beneficiary;
(ii) has not been created, established, or formed solely
to acquire the Securities without a prospectus in
reliance on an exemption from the prospectus
requirements of applicable securities legislation;
and
(iii) is resident in the Cayman Islands.
(f) The Securities are being acquired for investment for the
Investor's own account and not with the view to, or for resale
in connection with, any distribution or public offering
thereof. The Investor understands that the Securities have not
been registered under the Securities Act, or any state
securities laws by reason of their contemplated issuance in
transactions exempt from the registration requirements of the
Securities Act and applicable state securities laws and that
the reliance of the Corporation and others upon these
exemptions is predicated in part upon this representation by
each Investor. The Investor further understands that the
Securities may not be transferred or resold without
registration under the Securities Act and any applicable state
securities laws, or an exemption from the requirements of the
Securities Act and applicable state securities laws.
(g) The Investor qualifies as an "accredited investor," as defined
in Rule 501 of Regulation D under the Securities Act. The
Investor acknowledges that the Corporation has made available
to each such Investor at a reasonable time prior to the
execution of this Agreement the opportunity to ask questions
and receive answers concerning the business, operations and
financial condition of the Corporation and the terms and
conditions of the sale of securities contemplated by this
Agreement and to obtain any additional information (which the
Corporation possesses or can acquire without unreasonable
effort or expense) as may be necessary to verify the accuracy
of information furnished to such Investor. The Investor is
able to bear the loss of its entire investment in the
Securities without any material adverse affect on its
business, operations or prospects, and has such knowledge and
experience of financial and business matters that it is
capable of evaluating the merits and risks of the investment
to be made by it pursuant to this Agreement.
3.2 SURVIVAL
All statements contained in any Transaction Document, certificate or
other instrument delivered by or on behalf of the Investor pursuant to
or in connection with the transaction contemplated by this Agreement
shall be deemed to be made by the Investor hereunder. The
representations, warranties and covenants of the Investor contained or
deemed to be contained in this Agreement, or in the other Transaction
Documents shall survive the Closing of the subscription for, and issue
of, and sale of the Securities, and notwithstanding such Closing, and
regardless of any investigation by or on behalf of the Corporation with
respect thereto, shall continue in full force and effect for the
benefit of the Corporation for the Corporation's Period as defined
hereafter. For these purposes, "Corporation's Period" means that period
of time that obligations are explicitly expressed to survive in each
particular Transaction Document, or failing any such explicit
expression of survival, for the period of time starting from and
including the Closing Date and thereafter forever in the case of the
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covenants herein or in the case of fraud and, otherwise with respect to
representations and warranties to and excluding the third (3rd)
anniversary of the Closing Date. After the expiration of the
Corporation's Period, the Investor shall be released from all
obligations and liabilities hereunder in respect of such
representations, warranties and covenants except with respect to any
claims made by the Corporation in writing prior to the expiration of
the particular Corporation's Period (in which event, liability shall
survive until the final determination or settlement of such claims).
3.3 CORPORATION'S REPRESENTATIONS AND WARRANTIES
Subject to the provisions of Section 7.2, the Corporation hereby
jointly and severally represents, warrants and covenants to the
Investor that, save and except as set out in Schedule 3.3 hereto, the
following representations are true and correct at the Time of Closing.
The Corporation acknowledges and confirms that the Investor is relying
upon such representations, warranties and covenants, in connection with
the subscription by the Investor for the Securities and the completion
of the transactions contemplated under the Agreement.
GOOD STANDING
(a) The Corporation is a corporation:
(i) duly incorporated and organized, validly subsisting
and in good standing under the laws of the state of
Minnesota;
(ii) duly authorized, qualified and licensed to own its
properties, and to carry on business as presently
owned and carried on by it; and
(iii) having the power and authority and the right to enter
into and perform its obligations, if applicable,
under this Agreement and all other Transaction
Documents executed and delivered by such Company in
furtherance of the Closing of the transactions
contemplated under this Agreement including, without
limitation, to issue the Securities in accordance
with the terms of this Agreement.
CORPORATE AUTHORITY
(b) The execution and delivery of the Transaction Documents
including, without limitation, this Agreement and the
performance by the Corporation, of the transactions
contemplated by the Transaction Documents have been duly
authorized by all necessary corporate action of the
Corporation and by all other necessary corporate proceedings;
GUARANTEES AND UNDISCLOSED LIABILITIES
(c) The Corporation is not a party to nor bound by any agreement
of guarantee, indemnification, assumption or endorsement (or
any other like commitment) of the obligations, liabilities,
contingent or otherwise, or indebtedness of any other person,
firm or corporation, nor is the Corporation subject to any
liabilities save and except
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those disclosed in the SEC Reports, except if incurred since
June 30th, 1999 to the date hereof in the ordinary course of
business consistent with past experience;
AGREEMENT BINDING
(d) Each of the Transaction Documents delivered by the
Corporation, are valid and legally binding obligations of the
Corporation, enforceable in accordance with their respective
terms except that: (i) the enforcement thereof may be limited
by bankruptcy, insolvency and other laws effecting the
enforcement of credits' rights generally, (ii) rights of
indemnity, contribution and waiver of contribution thereunder
may be limited under applicable law and (iii) equitable
remedies, including, without limitation, specific performance
and injunctive relief, may be granted only in the discretion
of a court of competent jurisdiction. Neither the execution of
this Agreement, or such other Transaction Documents by the
Corporation nor the performance by the Corporation of the
various terms and provisions hereof and thereof, will violate
the articles of incorporation or other charter documents of
the Corporation. The Corporation is not a party to, subject to
or bound by any judgment, injunction or decree of any court or
governmental body that prevents the performance of this
Agreement, or any document referred to herein;
CONSENTS
(e) All Regulatory Approvals and all necessary consents or
approvals of any person or entity under any material contract
pertaining to each the Corporation or its assets or under any
regulatory authority having jurisdiction for the transactions
contemplated by the Transaction Documents have been obtained
by the Closing Date;
ADVERSE INFORMATION/EVENTS AND SEC REPORTS
(f) The Corporation has no information nor knowledge of any facts
specific to it's business or the Securities and not of general
knowledge that have not been disclosed to the Investor which,
if known to the Investor, might reasonably be expected to
deter an investor from completing the transaction herein. None
of the information or documents furnished by the Corporation
or the employees or agents of the Corporation, prior to the
date hereof to the Agent or the Investor in furtherance of the
Transaction Documents or in conjunction with this Agreement is
false, misleading or inaccurate in any material respect or
omits to state a material fact necessary in order to make any
of the statements therein not misleading. The Corporation has
previously furnished or made available to the Investor true
and complete copies of (i) its Annual Report on Form 10-KSB
for the fiscal year ended August 31, 1998, (ii) its quarterly
reports on Form 10-QSB filed since the fiscal year end for its
most recently filed Annual Report on Form 10-KSB was filed,
and (iii) its Proxy Statement relating to its most recent
Annual Meeting of Stockholders (collectively, the "SEC
Reports"). As of their respective dates, the SEC Reports (x)
complied as to form in all material respects with the
applicable requirements of the Securities Act and the rules
and regulations thereunder and the Securities Exchange Act of
1934, as amended, and the rules and regulations thereunder, as
the case may be, and (y) did not contain any untrue statement
of a material fact or omit to state a material fact required
to be
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stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made,
not misleading;
TRANSACTION COMPLIANCE
(g) The entering into of the Transaction Documents by the
Corporation, and the completion of the transactions
contemplated thereby do not result in the violation of any of
the terms and provisions of any indenture or other agreement,
written or oral, to which the Corporation may be a party, or,
of any applicable federal or state law or regulation;
LITIGATION
(h) Except as set forth in Schedule 3.3 or in the SEC Reports,
there are no actions, suits, arbitrations, or proceedings
pending or to the Corporation's knowledge threatened against,
by, or affecting the Securities, the business of the
Corporation, or the Corporation at law or in equity, or before
or by any federal, provincial, municipal or other governmental
department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which action, suit or
proceeding involves the possibility of any judgment against or
liability of the Corporation or the Investor, which would have
a material adverse effect on the Corporation. The Corporation
is not aware of any existing ground on which any such action,
claim, or proceeding may be commenced with any reasonable
likelihood of success which would produce a material adverse
effect;
RESIDENCY
(i) The Corporation is domiciled in the United States of America
for purposes of the Internal Revenue Code of 1986, as amended
("IRS Code");
CAPITAL
(j) The authorized capital of the Corporation consists of those
numbers and classes of shares set out in the SEC Reports which
schedule also sets out the names of all persons who are
registered owners of issued and outstanding shares or rights
to shares in the capital stock of the Corporation holding 10%
or more of the shares and rights to shares of that class
together with the number of such shares or rights to shares
held by that person and, on a fully diluted basis, the number
of shares and rights to shares of each class of stock that are
currently issued and outstanding.
LICENSES
(k) The Corporation possess all material certificates, authority,
permits or licenses issued by the appropriate state,
provincial, municipal or federal regulatory agencies or bodies
necessary to conduct the business now operated by it and the
Corporation has not received any notice of proceedings
relating to the revocation or modification of any such
certificate, authority, permit or license which, if the
subject of an unfavourable decision, ruling or finding would
materially and adversely affect the conduct of the business,
operations, financial condition or income of the Corporation;
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OPTIONS
(l) The Corporation is not a party to nor has granted any
agreement, warrant or right or privilege capable of becoming
an agreement, for the purchase, subscription or issuance of
any of the common shares or any other class of shares in the
capital stock of the Corporation, or securities convertible
into or exchangeable for such shares, other than as
described in the SEC Reports;
FINANCIAL STATEMENTS/TITLE TO ASSETS
(m) The financial statements of the Corporation included in the
SEC Reports present fairly, in all material respects, the
financial position of the Corporation as of the periods set
out therein in accordance with generally accepted United
States accounting principles applied on a consistent basis.
The Corporation owns all of its assets recorded as assets on
the said financial statements with a full and complete legal
and beneficial title thereto free and clear of all liens,
claims, or encumbrances save and except as more particularly
referred to in the aforesaid financial statements or
otherwise disclosed in the SEC Reports or as may have
subsequently been disposed of for fair value in the ordinary
course of business;
COMMISSIONS
(n) No commissions, brokerage, or finders fees are payable by
the Corporation or the Investor through or on account of any
acts of the Corporation, it's shareholders, or it's
representatives in connection with this Agreement or the
Closing Documents;
CEASE TRADING
(o) No order ceasing or suspending trading in securities of the
Corporation or prohibiting the sale of securities by the
Corporation has been issued and no proceedings for this
purpose have been instituted, are pending, contemplated or
threatened;
DIVIDENDS
(p) Since June 30th, 1999, the Corporation has not, directly or
indirectly, declared or paid any dividend or declared or
made any other distribution on any of its shares or
securities of any class, or, directly or indirectly,
redeemed, purchased or otherwise acquired any of its shares
or securities or agreed to do any of the foregoing;
SOFTWARE AND INTELLECTUAL PROPERTY
(q) Schedule 3.3(q) annexed hereto contains a description of the
hardware and software components that constitutes the
corporation principle product and services lines (the "NPE
System"). Except as disclosed in Schedules 3.3(m) or 3.3(q),
the Corporation has the ultimate right to use, free and
clear of any liens, all trade secrets, copyrights,
intellectual property, source and object code,
documentation, and all other intellectual property that
constitutes the NPE System or is furnished by the
Corporation to its clients as ancillary to the use of the
NPE System. To the best of its knowledge, the Corporation is
not using or in any way making use of any
-14-
confidential information or trade secrets, copyrights, trade
marks, or other intellectual property of any third party
that is material to the NPE System or the business of the
Corporation which is not under a subsisting right or license
in good standing granted by such third party to the
Corporation, and no claim has been asserted by any person to
the contrary effect. The NPE System to date has been
developed, coded, structured, and documented in accordance
with the standard of care of professional software
developers and in accordance with current technical
standards. The NPE System that has been supplied to
customers of the Corporation up to the date hereof has
operated, and hereafter will continue to operate, in
accordance with the descriptions, documentation, and
specifications pertaining thereto supplied to such customers
without any abnormal abends or aborts or invalid or
incorrect results or degradation of performance; save and
except as experienced within customer expectations and
within acceptable industry experience for well developed
software and, with respect to future experience with such
installed NPE System, at frequency and severity levels no
greater than experienced by the Corporation with respect to
the NPE System to the date hereof.
(r) To the best of the knowledge of the Corporation, the
computer systems, including hardware and software used
internally in the business of the Corporation, and the NPE
Systems furnished by the Corporation to third parties, are
free from significant viruses and disabling devices, and the
Corporation has taken, and shall continue to take, all steps
and implement all procedures necessary to ensure, so far as
reasonably possible, that such systems are free from viruses
and disabling devices and will remain so. All such systems
including, without limitation, the NPE Systems are "year
2000 compliant". For these purposes, "year 2000 compliant"
means that the relevant computer hardware and software are
fully capable of sorting, interpreting, manipulating,
calculating, processing and reporting dates based upon the
full four digits for each year such that all arithmetic
operations, comparisons, sorts and reporting involving dates
yield correct results for the year 2000 and all years before
and after the year 2000 and that such computer systems are
capable of processing all dates (including leap years)
before January 1, 2000 and after December 31, 1999 without
experiencing any abnormal abends or aborts or invalid or
incorrect results or degradation of performance.
SECURITIES
(s) Upon receipt of the Purchase Price for the Securities, the
Securities shall be at the Time of Closing duly and validly
issued, as fully paid and non-assessable securities of the
Corporation.
(t) The issue and delivery of the Securities to the Investor on
the Closing Date shall be made in compliance with all
applicable securities laws pertaining to the Corporation or
the issue of the Securities and such issue shall be exempt
from any requirement respecting the filing of a prospectus
or registration statement and no rulings, orders, consents
or approvals required to permit the sale of the Securities
to the Investor under such securities legislation are
required.
(u) One year after the date of issuance, the Purchased Common
Shares may be resold pursuant to Rule 144 under the
Securities Act, as currently in effect, provided that (x)
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the Corporation's Common Stock continues to be registered
pursuant to Section 12 of the Securities and Exchange Act of
1934, as amended (the "Exchange Act") and (y) the
Corporation has filed all reports required to be filed under
Section 13 or 15(d) of the Exchange Act during the one-year
period prior to any resale of Purchased Common Shares.
CONTRACTS AND CLIENT RELATIONS
(v) A true and complete list of all material contracts (the
"Contracts") in effect to which the Corporation is a party
have been filed as Exhibits to the SEC Reports and the
Corporation has prior to the date hereof provided the
Investor with true and complete copies of all such
Contracts. All Contracts have been duly authorized and
delivered by the Corporation, are in full force and effect
against the Corporation and constitute the valid and binding
obligations of the Corporation and, to the best of the
Corporation's knowledge, the other parties thereto,
enforceable in accordance with their respective terms. As to
the Contracts, (i) there are no existing breaches or
defaults by the Corporation thereunder or, to the knowledge
of the Corporation by the other parties to such Contracts,
(ii) no event, act or omission has occurred or, as the
result of the consummation of the transactions contemplated
hereby will occur which (with or without notice, lapse of
time or the happening or occurrence of any other event)
would result in a default by the Corporation or give cause
for termination thereof, provided that insofar as the
foregoing representation involves the actions or omissions
of parties other than the Corporation it shall be limited to
the expressed terms of the Contracts together with the
knowledge of the Corporation and (iii) none of the parties
to such Contracts have expressed an indication to the
Corporation of their intention to cancel, renegotiate or
exercise or not exercise any right under such Contracts.
(w) Schedule 3.3(w) hereof sets forth those clients of the
Corporation for the previous two fiscal years of the
Corporation and for the current fiscal year to June 30th,
1999 making a 5% or greater contribution to the revenue of
the Corporation for such fiscal period and set opposite each
such client's name in such period are the fees and revenues
paid or payable by that client for such periods. No such
client of the Corporation has advised the Corporation in
writing that it (i) is terminating or considering
terminating the services being supplied by the Corporation
(including its license of the NPE System) as a whole or in
respect of any particular project, product or service, or
(ii) is planning to reduce its future maintenance contract
spending with the Corporation in any material manner. To the
best knowledge, information and belief of the Corporation
(without making any inquiry of any clients), no client has
orally advised the Corporation of any of the foregoing
events or plans to implement any of the foregoing events.
RELATED TRANSACTIONS
(x) Except as disclosed in the SEC Reports no current or former
shareholder, director or officer or employee of the
Corporation or any Associate of any such person is
presently, directly or indirectly, through his or its
affiliation with any other person or entity, party to any
transaction with the Corporation providing for the
furnishing of services (other than employment of such
individuals by the Corporation), or products
-16-
by or to, or rental of real or personal property from or to,
or otherwise requiring cash payments to or by, any such
persons that would be required to be disclosed in the SEC
Reports).
SUBSIDIARIES AND INDIRECT INVESTMENTS
(y) The Corporation has no subsidiaries, or other indirect
investments, except for Fullmetrics, Inc.
3.4 SURVIVAL OF CORPORATION'S REPRESENTATIONS
All statements contained in any Transaction Document, certificate or
other instrument delivered by or on behalf of the Corporation
pursuant to or in connection with the transaction contemplated by
this Agreement shall be deemed to be made by the Corporation
hereunder. The representations, warranties and covenants of the
Corporation contained or deemed to be contained in this Agreement or
in the other Transaction Documents, shall survive the Closing of the
subscription for, and issue of, the Securities, and notwithstanding
such Closing, and regardless of any investigation by or on behalf of
the Investor with respect thereto, shall continue in full force and
effect for the benefit of the Investor for the Investor's Period as
defined hereafter. For these purposes, "Investor's Period" means
that period of time that obligations are explicitly expressed to
survive in each particular Transaction Document, or failing any such
explicit expression of survival, for the period of time starting
from and including the Closing Date and thereafter forever in the
case of the covenants herein or in the case of fraud or in respect
of matters pertaining to the shares set out in subsection 3.3(s)
hereof, and otherwise with respect to representations and
warranties, to and including the date of expiration of potential
liability under the IRS Code in respect of liability thereunder, and
in all other cases, to and excluding the third (3rd) anniversary of
the Closing Date. After the expiration of the Investor's Period, the
Corporation shall be released from all obligations and liabilities
hereunder in respect of such representations, warranties and
covenants except with respect to any claims made by the Investor in
writing prior to the expiration of the particular Investor's Period
(in which event, liability shall survive until the final
determination or settlement of such claims).
ARTICLE 4 - CLOSING ARRANGEMENTS
4.1 PLACE OF CLOSING
The parties will use all reasonable best efforts to avoid a formal
closing requiring personal attendance in one place at the same time.
Instead, the parties will use all reasonable efforts to effect
closing procedures through escrow of documents at Brien X. XxXxxxx,
Barrister & Solicitor, Toronto, and through Oppenhimer, Xxxxx &
Xxxxxxxx LLP, Minnesota, in accordance with procedures agreed
between those two law firms. In the event that a formal closing is
required with the attendance of parties, such closing will take
place at the Time of Closing at the offices of:
Oppenhimer, Xxxxx & Xxxxxxxx LLP
Attorneys Plaza VII
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
-00-
Xxxxxxxxxxx XX
00000-0000
The time and place for any such closing may be amended by agreement
between the parties hereto.
4.2 TENDER
Any tender of documents or money under this Agreement may be made
upon the parties or their respective counsel and money may be
tendered by official bank draft drawn upon a USA chartered bank or
by negotiable cheque payable in USA funds and certified by a
Canadian chartered bank or trust company.
4.3 CLOSING PROCEDURES FOR SECURITIES
(a) Without limiting the other matters to be deduced at the Time
of Closing, at the Time of Closing, the Corporation shall
deliver to the Investor:
(i) a certificate representing the Securities
subscribed for herein duly registered in the name
of the Investor; and
(ii) the requisite legal opinion and certificates and
other conditions of closing as contemplated in the
agenda tabled at Closing;
(b) Without limiting the other matters to de deduced at the Time
of Closing, at the Time of Closing, the Investor shall
deliver to the Corporation:
(i) an irrevocable direction to convert to equity a
portion of the Debt owed by the Corporation to the
Investor that is equal to the Purchase Price;
(ii) the requisite certificates and other conditions of
closing as contemplated in the agenda delivered at
Closing.
ARTICLE 5 - COVENANTS OF THE PARTIES RE CLOSING
5.1 APPROVALS AND CONSENTS
Prior to the Closing Date, each of the Corporation and Investor have
obtained all necessary consents of all other third parties, and
shall after the Closing Date comply with any conditions thereof,
which are required in connection with the completion of any of the
transactions contemplated by this Agreement, the execution of this
Agreement or the Closing, or the performance of any of the terms and
conditions hereof, provided that the Investor shall not be obliged
to comply with any such conditions unless the same have been
disclosed to and accepted by the Investor prior to Closing. To the
extent that a necessary consent to this transaction is to be
obtained by the Investor, the Corporation shall not be obliged to
comply with any conditions of such consent unless, prior to Closing,
such conditions have been disclosed to and accepted by the person(s)
from whom compliance is required.
-18-
5.2 NATURE OF COVENANTS
The covenants of the Corporation and the Investor, as the case may
be, set forth in this Agreement shall survive the Closing and,
notwithstanding the Closing, shall continue in full force and effect
for the benefit of the Investor and the Corporation, as the case may
be.
5.3 COVENANTS OF THE CORPORATION
The Corporation hereby covenants to and with the Investor that it will:
(a) fulfil all legal requirements to permit the issuance and
offering of the Securities as contemplated in this Agreement
including, without limitation, compliance with all
applicable securities laws and regulations to enable the
same to be offered for subscription and issued without the
necessity of filing a prospectus or registration statement;
(b) obtain the necessary regulatory consents to the issue of the
Securities, if any; and
(c) within the time periods prescribed by law, after the Closing
Date (as herein defined), file such documents as may be
required under the applicable securities laws relating to
the private placement of the Securities, if applicable.
ARTICLE 6 - SIMULTANEOUS CLOSING
6.1 SIGN AND CLOSE
This Agreement has been executed and delivered coincidentally with
the closing of the transactions contemplated hereunder.
ARTICLE 7- INDEMNIFICATIONS
7.1 INDEMNIFICATION BY INVESTOR
The Investor hereby agrees to indemnify and save harmless the
Corporation from and against all manner of debts, losses, demands,
claims, actions, causes of action, damage, liabilities, costs,
expenses or penalties whatsoever and howsoever arising
(collectively, the "Corporation's Damages") incurred by the
Corporation at any time hereafter, whether directly, or indirectly,
that are existing, arising, accruing, incurred or outstanding as at
the Time of Closing on the Closing Date, or that arise thereafter in
respect of transactions to and including the Time of Closing of the
Closing Date and that are:
(a) Attributable to the breach or incorrectness of any and each
representations, warranties or covenants given in this
Agreement or that are given in any of the Transaction
Documents in favour of the Corporation;
(b) All reasonable costs and expenses of the Corporation in
pursuing its remedies under this Agreement, including
reasonable legal fees and expenses on a solicitor and client
basis; and
(c) Interest on all of the amounts aforesaid at the pre-judgment
and post-judgment interest rates allowed by courts of
competent jurisdiction in the state of Minnesota;
-19-
provided however, that notice of such claim for indemnity is given
by the Corporation to the Investor during the Corporation's Period.
The indemnities given in this Section 7.1 are separate and distinct
from any indemnities given by, or any obligations of, the Investor
in any other Transaction Document and shall not merge with, or be in
substitution for, any such indemnities or obligations, all of which
are hereby expressed to be separately enforceable covenants. The
foregoing liability of the Investor shall not arise or be effective,
except in the case of fraud, until the aggregate amount of all
liability claims hereunder exceeds $25,000.00 at which time the
Investor shall be liable for all such liability claims including the
first $25,000.00 thereof.
7.2 INDEMNIFICATION BY CORPORATION
The Corporation hereby agrees to indemnify and save harmless the
Investor from and against all manner of debts, losses, demands,
claims, actions, causes of action, damage, liabilities, costs,
expenses, or penalties, whatsoever and howsoever arising
(collectively, the "Investor's Damages"), incurred by the Investor
at any time hereafter, whether directly, or indirectly, or through
the diminished value of the Securities, that are existing, arising,
accruing, incurred or outstanding as of the Time of Closing on the
Closing Date, or that arise thereafter in respect of transactions to
and including the Time of Closing on the Closing Date and that are:
(a) Attributable to the breach or incorrectness of any and each
of the representations, warranties or covenants in this
Agreement or that are given in any of the Transaction
Documents in favour of the Investor;
(b) All reasonable costs and expenses of the Investor in
pursuing its remedies under this Agreement, including
reasonable legal fees and expenses on a solicitor and client
basis; and
(c) Interest on all of the amounts aforesaid at the pre-judgment
and post-judgment interest rates allowed by courts of
competent jurisdiction in the state of Minnesota;
provided, however, that notice of such claim for indemnity is given
by the Investor to the Corporation during the Investor's Period. The
indemnities given in this Section 7.2 are separate and distinct from
any indemnities given by, or any obligations of, the Corporation in
any other Transaction Document and shall not merge with, or be in
substitution for, any such indemnities or obligations, all of which
are hereby expressed to be separately enforceable covenants. The
foregoing liability of the Corporation shall not arise or be
effective, except in the case of fraud, until the aggregate amount
of all liability claims hereunder exceeds $25,000.00 at which time
the Corporation shall be liable for all such liability claims
including the first $25,000.00 thereof.
7.3 PROCEDURE FOR INDEMNIFICATION
(a) CLAIMS OTHER THAN THIRD PARTY CLAIMS. Following receipt from
the Corporation or the Investor, as the case may be (the
"Indemnified Party"), of a written notice of a claim for
indemnification which has not arisen in respect of a Third
Party Claim (as defined in Section 7.3(b) below), the party
who is in receipt of such notice (the "Indemnifying Party")
shall have 30 days to make such investigation of the claim as
the Indemnifying Party considers necessary or desirable. For
the purpose of such investigation, the Indemnified Party shall
make available to the Indemnifying Party
-20-
the information relied upon by the Indemnified Party to
substantiate the claim. If the Indemnified Party and the
Indemnifying Party agree at or prior to the expiration of
such 30 day period (or any mutually agreed upon extension
thereof) to the validity and amount of the claim, the
Indemnifying Party shall immediately pay to the Indemnified
Party the full agreed upon amount of the claim. If the
Indemnified Party and the Indemnifying Party do not agree
within such period (or any mutually agreed upon extension
thereof), such dispute shall be resolved by an action in a
court of law.
(b) THIRD PARTY CLAIMS. The Indemnified Party shall notify the
Indemnifying Party in writing as soon as is reasonably
practicable after being informed in writing that facts exist
which may result in a claim originating from a Person other
than the Indemnified Party (a "Third Party Claim") and in
respect of which a right of indemnification given pursuant
to Section 7.1 or 7.2 may apply. The Indemnifying Party
shall have the right to elect, by written notice delivered
to the Indemnified Party within 10 days of receipt by the
Indemnifying Party of the notice from the Indemnified Party
in respect of the Third Party Claim, at the sole expense of
the Indemnifying Party, to participate in or assume control
of the negotiation, settlement or defence of the Third Party
Claim, provided that:
(i) such will be done at all times in a diligent and
bona fide matter;
(ii) the Indemnifying Party acknowledges in writing its
obligation to defend the Indemnified Party in
accordance with the terms contained in this
Agreement in respect of that Third Party Claim; and
(iii) the Indemnifying Party shall pay all reasonable
out-of-pocket expenses incurred by, the
Indemnified Party as a result of such
participation or assumption.
If the Indemnifying Party elects to assume such control, the
Indemnified Party shall cooperate with the Indemnifying
Party and its counsel and shall have the right to
participate in the negotiation, settlement or defence of
such Third Party Claim at its own expense. If the
Indemnifying Party does not so elect or, having elected to
assume such control, thereafter fails to proceed with the
settlement or defence of any such Third Party Claim, the
Indemnified Party shall be entitled to assume such control.
In such case, the Indemnifying Party shall cooperate where
necessary with the Indemnified Party and its counsel in
connection with such Third Party Claim and the Indemnifying
Party shall be bound by the results obtained by the
Indemnified Party with respect to such Third Party Claim.
7.4 ADDITIONAL RULES AND PROCEDURES
The obligation of the parties to indemnify each other pursuant to
this Article 7 shall also be subject to the following:
(a) an Indemnified Party shall only be entitled to make a claim
for indemnification pursuant to Section 7.1 or 7.2, as the
case be, if written notice containing reasonable particulars
of such claim is delivered to the Indemnifying Party within
the time periods provided for in Section 3.2 or 3.4, as the
case may be;
-21-
(b) if any Third Party Claim is of a nature such that the
Indemnified Party is required by applicable law to make a
payment to any Person (a "Third Party") with respect to such
Third Party Claim before the completion of settlement
negotiations or related legal proceedings, the Indemnified
Party may make such payment and the Indemnifying Party
shall, forthwith after demand by the Indemnified Party,
reimburse the Indemnified Party for any such payment. If the
amount of any liability under the Third Party Claim in
respect of which such a payment was made, as finally
determined, is less than the amount which was paid by the
Indemnifying Party to the Indemnified Party, the Indemnified
Party shall, forthwith after receipt of the difference from
the Third Party, pay such difference to the Indemnifying
Party;
(c) except in the circumstances contemplated by subsection
7.4(b) above, and whether or not the Indemnifying Party
assumes control of the negotiation, settlement or defence of
any Third Party Claim, the Indemnified Party shall not
settle or compromise any Third Party Claim except with the
prior written consent of the Indemnifying Party;
(d) the Indemnifying Party and the Indemnified Party shall
provide each other on an ongoing basis with all information
which may be relevant to the other's liability relating to a
Third Party Claim hereunder and shall supply copies of all
relevant documentation promptly as they become available; and
(e) notwithstanding subsection 7.4(c), the Indemnifying Party
shall not settle any Third Party Claim or conduct any
related legal or administrative proceeding in a manner which
would, in the opinion of the Indemnified Party, acting
reasonably, have a material adverse impact on the
Indemnified Party.
7.5 RIGHTS CUMULATIVE
The rights of indemnification contained in this Article 7 are
cumulative and are in addition to every other right or remedy of the
parties contained in this Agreement or otherwise.
ARTICLE 8 - GENERAL
8.1 NON-MERGER
Each party hereby agrees that all provisions of this Agreement shall
not merge on the Closing of the transactions contemplated in this
Agreement and shall, thereafter, survive for the periods of time
expressly set out in this Agreement and if such survival is not
limited in time shall, subject to applicable limitation periods
otherwise imposed by law, forever survive the execution and delivery
of this Agreement until fully fulfilled or performed.
8.2 EXPENSES
Except as set out hereafter, each of the parties hereto shall bear
all expenses incurred by it in connection with this Agreement
including, without limitation, the charges of their respective,
accountants and financial advisors. Notwithstanding the foregoing
however, the Corporation shall bear the reasonable legal and
accounting fees incurred by the Investor in connection with its due
diligence and the drafting and legal review of the transactions,
agreements and documents contemplated by and directly relating to
the transactions contemplated herein.
-22-
Such amounts payable by the Corporation accruing to, or known by,
the Time of Closing shall be paid by the Corporation at the Time of
Closing.
8.3 FURTHER ASSURANCES
The parties shall do all such things and provide all such reasonable
assurances as may be required to consummate the transactions
contemplated hereby, and each party shall provide such further
documents or instruments required by any other party as may be
reasonably necessary or desirable to effect the purpose of this
Agreement and carry out its provisions, whether before or after the
closing.
8.4 BENEFIT OF THE AGREEMENT
This Agreement shall enure to the benefit of and be binding upon the
respective heirs, executors, administrators, successors and
permitted assigns of the parties.
8.5 ENTIRE AGREEMENT
With respect to the subject matter of the Transaction Documents, the
Transaction Documents (a) set forth the entire agreement between the
parties and any persons who have in the past or who are now
representing any of the parties, (b) supersedes all prior
understandings and communications between the parties or any of
them, oral or written, express or implied including the Letter of
Intent, and (c) constitutes the entire agreement between the
parties. Each party acknowledges that it shall have no right to rely
upon any amendment, promise, modification, statement or
representation made or occurring subsequent to the execution of this
Agreement unless the same is in writing and executed by the parties
hereto.
8.6 WAIVER
The failure of any party to enforce at any time any of the
provisions of this Agreement or any of its rights in respect thereto
or to insist upon strict adherence to any term of this Agreement
shall not be considered to be a waiver of such provision, right or
term or in any way to affect the validity of this Agreement or
deprive the applicable party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
The exercise by any party of any of its rights provided by this
Agreement shall not preclude or prejudice such party from exercising
any other right it may have under this Agreement, irrespective of
any previous action or proceeding taken by it hereunder. Any waiver
by any party of the performance of any of the provisions of this
Agreement shall be effective only if in writing and signed by a duly
authorized representative of such party.
8.7 NOTICES
All communications which may be or are required to be given by any
party to any other party, shall be in writing and (i) delivered
personally, (ii) sent by prepaid courier service or mail, or (iii)
sent by prepaid telecopier or other similar means of electronic
communication to the parties at their following respective address.
-23-
TO THE CORPORATION:
Nicollet Process Engineering, Inc
000 Xxxxx Xxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX 00000
Attention: President
Telecopier: (000) 000-0000
with a copy to:
Oppenhimer, Xxxxx & Xxxxxxxx LLP
Attorneys Plaza VII
00 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxxxxx, XX
00000-0000
Attention: Xx. Xxxxxx X. Xxxxxxxx
Telecopier: (000) 000-0000
TO THE INVESTOR:
TECHinspirations Inc. (Cayman)
c/o CIBC Bank and Trust Company (Cayman) Limited
X.X. Xxx 000
CIBC Building, Xxxxxx Street
Georgetown, Grand Cayman
B.W.I.
Attention: Mr. Xxx Xxxxxxxx
Telecopier: (000) 000-0000
with a copy to TECHinspirations (Canada) Inc.
2275 No. 0 Xxxx Xxxx
X.X. #0
Xxxxxx, Xxxxxxx X0X 0X0
Attention: Xx. Xxxxx xxx Xxxxxxxxxxxx
Telecopier: (000) 000-0000
and with a copy to the Investor's counsel at:
Brien X. XxXxxxx
00 Xxxxxxx Xxxx, 0xx Xxxxx
Xxxxxxx, XX X0X 0X0
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Attention: Xx. Xxxxx X. XxXxxxx
Telecopier: (000) 000-0000
8.8 ASSIGNMENT
Neither this Agreement nor any rights or obligations hereunder shall
be assignable by any party without the prior written consent of each
of the other parties.
8.9 SEVERABILITY
If any provision of this Agreement is invalid or unenforceable, such
provision shall be severed and the remainder of this Agreement shall
be unaffected thereby, but shall continue to be valid and
enforceable to the fullest extent permitted by law.
8.10 COUNTERPARTS
This Agreement may be executed by the parties in separate
counterparts (by original or facsimile signature) each of which when
so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF the parties have hereunder duly executed this
Agreement on the date first above written.
[remainder of page intentionally left blank]
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NICOLLET PROCESS ENGINEERING, INC.
Per:
------------------------------------
Name:
Title:
TECHinspirations INC. (CAYMAN)
Per:
------------------------------------
Name:
Title:
-26-
FOR VALUE RECEIVED the undersigned Advisor confirms the
provisions of Section 1.9 of this Agreement, acknowledges that it
entered into the Letter of Intent for the Investor and without
personal benefit, and confirms that the Investor is the entity with
which the Corporation should complete the Transaction Documents and
the matters contemplated under the Letter of Intent applicable to
the `Investor to be identified', other than the consulting agreement
referred to in the Closing Agenda which is to be completed with the
Advisor.
TECHinspirations INC.
Per:
-------------------------------
Name: Xxxxxx Xxxxxx
Title: President
SCHEDULE 1.1
DEFINITIONS
This is Schedule 1.1 of the Agreement between Nicollet Process Engineering,
Inc and TECHinspirations Inc. (Cayman) made as of the 15th day of July, 1999.
Where used herein or in any amendment hereto, the following terms have the
following meanings, respectively:
(a) "Advisor" means TECHinspirations, Inc. a Nevada corporation.
(b) "Agreement" means this Agreement and includes all Schedules
annexed to this Agreement and referenced in Section 1.5 of
this Agreement;
(c) "Agreement Date" means the date first above written in this
Agreement;
(d) "Authority" means any governmental or regulatory authority,
body, agency or department, whether federal, provincial or
municipal;
(e) "Business Day" means a day other than a Saturday, Sunday or
any other day on which the principal commercial banks
located at the City of Minneapolis, Minnesota are not open
for business during normal banking hours;
(f) "Closing" means the completion of the issuance by the
Corporation, and subscription by the Investor, of the
Security as provided hereunder;
(g) Closing Date" or "Date of Closing" means the Agreement Date;
(h) "Closing Documents" means all documents of conveyance,
instruments and agreements delivered at the Closing of the
transactions contemplated hereunder as described on the
closing agenda of documents annexed hereto as Schedule
1.1(j);
(i) "Common Shares" or "common shares" bears the meaning
attributable to it in subsection 3.3(j) of the Agreement;
(j) "Corporation's Liabilities" bears the meaning attributable
to it in Section 7.1 of the Agreement;
(k) "Corporation's Period" bears the meaning attributable to it
in Section 3.2 of the Agreement;
(l) "Indemnified Party" bears the meaning attributable to it in
subsection 7.3(a) of the Agreement;
(m) "Indemnifying Party" bears the meaning attributable to it in
subsection 7.3(a) of the Agreement;
(n) "Investor's Damages" bears the meaning attributable to that
term in Section 7.2 of this Agreement;
-2-
(o) "Investor's Period" bears the meaning attributable to that
term in Section 3.4 of this Agreement;
(p) "Person" includes an individual, corporation, partnership,
trustee, trust, unincorporated association, organization,
syndicate, executor, administrator or other legal or
personal representative and pronouns have a similarly
extended meaning;
(q) "Regulatory Approvals" means all necessary approvals,
permits, sanctions, rulings, orders or consents from any
government, governmental body, regulatory authority or
self-regulatory organization within the United States with
respect to the transactions contemplated by this Agreement;
(r) "SEC Reports" bears the meaning attributable to that term in
paragraph 3.3(f) hereof;
(s) "Securities" means the Purchased Common Shares, the Common
Stock Warrant, the shares of Common Stock underlying the
Common Stock Warrant, and the Secured Debt.
(t) "Shares" bears the meaning attributable to that term in
Section 2.1 of this Agreement;
(u) "Third Party Claim" bears the meaning attributable to it in
Section 7.3(b) of the Agreement;
(v) "Time of Closing" means 10:00 a.m. (Minnesota time) on the
Closing Date or such other time as the Investor and the
Corporation may agree upon; and
(w) "Transaction Documents" collectively means Closing and this
Agreement.
