Exhibit 10.2
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SUBSCRIPTION AGREEMENT MADE AND ENTERED INTO IN XXX XXXX XXX XXXXXXXX XX
XXXXXXXX, XX THE 2ND DAY OF OCTOBER, 1996
BY AND AMONG: SOCIETE INNOVATECH DU GRAND MONTREAL, a body politic duly
constituted according to An Act respecting Societe
Innovatech du Grand Montreal, R.S.Q., ch. S-17.2, having
its head office and principal place of business in the
City of Montreal, Province of Quebec,
(hereinafter referred to as "Innovatech")
PARTY OF THE FIRST PART
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AND: 3294340 CANADA INC., a body politic and corporate, duly
incorporated according to the Canadian Business
Corporations Act, having its head office and principal
place of business in the City of Montreal, Province of Quebec,
(hereinafter referred to as the "Corporation")
PARTY OF THE SECOND PART
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SECTION 1 - PREAMBLE
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1.1 WHEREAS Innovatech wishes to subscribe for shares from the treasury
of the Corporation at the price set forth hereinafter, the whole on the
terms and conditions hereinafter set out in this Agreement.
1.2 WHEREAS concurrently with the execution of this Agreement, Widecom
entered into a Subscription Agreement with the Corporation (the "Widecom
Subscription Agreement") providing for the subscription by Widecom for
shares from the treasury of the Corporation.
1.3 WHEREAS concurrently with the execution of this Agreement, Finger
Print entered into a Rollover Agreement with the Corporation pursuant to
which Finger Print sold its technology to the Corporation in consideration
of the issuance by the Corporation to Finger Print of 50 Class A Shares in
the capital stock of the Corporation (the "Finger Print Rollover
Agreement").
1.4 WHEREAS concurrently with the execution of this Agreement, Flat Panel
entered into a Rollover Agreement with the Corporation pursuant to which
Flat Panel sold its technology to the Corporation in consideration of the
issuance by the Corporation to Flat Panel of 50 Class A Shares in the
capital stock of the Corporation (the "Flat Panel Rollover Agreement").
NOW, THEREFORE, THIS AGREEMENT WITNESSETH:
SECTION 2. - INTERPRETATION
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2.1 Definitions. In this Agreement:
2.1.1 "Agreement" shall mean this Subscription Agreement and all
instruments supplemental hereto or in amendment or confirmation
hereof; "herein", "hereof", "hereto", "hereunder" and similar
expressions mean and refer to this Agreement and not to any particular
Section, subsection or other subdivision; "Section", "subsection" or
other subdivision of this Agreement means and refers to the specified
Section, subsection or other subdivision of this Agreement;
2.1.2 "Business Day" shall mean any day, other than a Saturday or
Sunday or a day on which the principal commercial banks in the
Province of Quebec are not open for business during normal banking
hours;
2.1.3 "Class A Shares" shall have the meaning ascribed thereto in
the Articles of Incorporation of the Corporation;
2.1.4 "Dollar", "Dollars" and the sign "$" shall, unless otherwise
indicated, each mean lawful money of Canada;
2.1.5 "Finger Print" shall mean 3294412 Canada Inc.;
2.1.6 "Finger Print Rollover Agreement" shall have the meaning
ascribed thereto in subsection 1.3;
2.1.7 "Flat Panel" shall mean 3294421 Canada Inc.;
2.1.8 "Flat Panel Rollover Agreement" shall have the meaning
ascribed thereto in subsection 1.4;
2.1.9 "Governmental Body" shall mean (i) any domestic or foreign
national, federal, provincial, state, municipal or other government or
body, (ii) any multinational, multilateral or international body,
(iii) any subdivision, agent, commission, board, instrumentality or
authority of any of the foregoing governments or bodies, (iv) any
quasi-governmental or private body exercising any regulatory,
expropriation or taxing authority under or for the account of any of
the foregoing governments or bodies, or (v) any domestic, foreign,
international, multilateral or multinational judicial, quasi-judicial,
arbitration or administrative court, tribunal, commission, board or
panel;
2.1.10 "Innovatech Shares" shall have the meaning ascribed thereto
in subsection 3.1;
2.1.11 "Person" shall mean an individual, corporation, company,
cooperative, partnership, trust, unincorporated association, entity
with judicial personality, Governmental Body; and pronouns when they
refer to a Person have a similarly extended meaning;
2.1.12 "Shareholders Agreement" shall mean the Memorandum of
Agreement of even date among the parties hereto and Widecom, Finger
Print and Flat Panel setting forth the terms and conditions which will
govern the relationship of the shareholders of the Corporation;
2.1.13 "Widecom License Agreement" shall mean the license agreement
entered into between Widecom and the Corporation on the date hereof by
which Widecom licenses to the Corporation all its technology, which
the Corporation shall be entitled to use for scientific research and
experimental development;
2.1.14 "Widecom" shall mean The Widecom Group Inc.;
2.1.15 "Widecom Subscription Agreement" shall have the meaning
ascribed thereto in subsection 1.2.
2.2 Gender. Any reference in this Agreement to any gender shall include
both genders and the neutral, and words used herein importing the singular
number only shall include the plural and vice versa.
2.3 Headings. The division of this Agreement into Sections, subsections
and other subdivisions, and the insertion of headings are for convenience of
reference only and shall not affect or be utilized in the construction or
interpretation of this Agreement.
2.4 Severability. Any Section, subsection or other subdivision of this
Agreement or any other provision of this Agreement which is, or becomes,
illegal, invalid or unenforceable shall be severed therefrom and shall be
ineffective to the extent of such illegality, invalidity or unenforceability
and shall not affect or impair the remaining provisions hereof, which
provisions shall be severed from an illegal or unenforceable Section,
subsection or other subdivision of this Agreement or any other provisions of
this Agreement.
2.5 Entire Agreement. This Agreement together with any other instruments
to be delivered pursuant hereto, constitute the entire agreement among the
parties pertaining to the subject matter hereof and supersede all prior
agreements, understandings, negotiations, and discussions, whether oral or
written, among any or all of the parties.
2.6 Amendments. No amendment of this Agreement shall be binding unless
otherwise expressly provided in an instrument duly executed by each of the
parties hereto.
2.7 Waiver. Except as otherwise provided in this Agreement, no waiver of
any of the provisions of this Agreement shall be deemed to constitute a
waiver of any other provisions (whether or not similar), nor shall such
waiver constitute a continuing waiver unless otherwise expressly provided in
an instrument duly executed by the parties.
2.8 Delays. When calculating the period of time within which or
following which any act is to be done or step taken pursuant to this
Agreement, the day which is the reference day in calculating such period
shall be excluded. If the day on which such delay expires is not a Business
Day, then the delay shall be extended to the next succeeding Business Day.
2.9 Preamble. The preamble hereof shall form an integral part of this
Agreement.
2.10 Governing Law. This Agreement shall be governed by and interpreted
and enforced in accordance with the laws of the Province of Quebec and the
laws of Canada applicable therein.
SECTION 3. - SUBSCRIPTION
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3.1 Innovatech Subscription. Subject to the terms and conditions
contained herein, Innovatech hereby subscribes for four hundred and fifty
(450) Class A Shares (collectively the "Innovatech Shares") of the
Corporation's share capital at the aggregate subscription price of two
million and five hundred thousand dollars ($ 2,500,000.00). The Corporation
hereby accepts the subscription of Innovatech for the Innovatech Shares
subject to the terms and conditions contained herein.
3.2 Payment and Issue of Innovatech Shares. Innovatech hereby agrees to
remit to the Corporation on the date hereof the aggregate subscription price
set forth in subsection 3.1, and the Corporation shall, upon receipt of a
cheque for the aggregate subscription price set forth in subsection 3.1,
issue the Innovatech Shares to Innovatech and deliver share certificates
representing same.
SECTION 4. - REPRESENTATIONS AND WARRANTIES
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4.1 Representations and Warranties of Innovatech. Innovatech hereby
represents and warrants to the Corporation, and acknowledges and confirms
that the Corporation is relying upon such representations and warranties in
connection herewith and would not have entered into this Agreement without
such representations and warranties:
4.1.1 it is duly constituted or formed, validly existing and in
good standing under the laws pursuant to which it was constituted or
formed;
4.1.2 it has the necessary corporate power and authority to execute
this Agreement and to perform its obligations hereunder. The execution
of this Agreement by it and the performance by it of its obligations
hereunder have been duly authorized by all necessary action on its
part. The execution of this Agreement by it and performance by it of
its obligations hereunder do not require any action or consent of, any
registration with, or notification to any Person, or any action or
consent under any laws to which it is subject, other than the consent
of the board of directors of Innovatech, which has been obtained;
4.1.3 the execution of this Agreement, the consummation of the
transactions contemplated herein, the performance by it of its
obligations hereunder and the compliance by it with this Agreement do
not:
4.1.3.1 violate, contravene or breach, or constitute a
default under, its constating laws or by-laws; or
4.1.3.2 violate, contravene or breach any laws to which it is
subject;
4.1.4 neither it nor any of its directors, officers, employees or
agents has employed or incurred any liability to any broker, finder or
agent for any brokerage fees, finder's fees, commissions or other
amounts with respect to this Agreement or any of the transactions
contemplated hereby.
4.2 Representations and Warranties of the Corporation. The Corporation
hereby represents and warrants as follows to Innovatech and acknowledges and
confirms that Innovatech is relying upon such representations and warranties
in connection herewith and would not have entered into this Agreement
without such representations and warranties:
4.2.1 the Corporation:
4.2.1.1 is duly incorporated, validly existing and in good
standing under the laws of its jurisdiction of incorporation;
and
4.2.1.2 has not carried on any business since its
incorporation;
4.2.2 the Corporation has the necessary corporate power and
authority to execute this Agreement and to perform its obligations
hereunder. The execution of this Agreement by the Corporation and the
performance by the Corporation of its obligations hereunder have been
duly authorized by all necessary action on its part. The execution of
this Agreement by the Corporation and performance by the Corporation
of its obligations hereunder do not require any actions or consent of,
any registration with, or notification to, any Person, or any action
or consent under any laws to which the Corporation is subject;
4.2.3 the execution of this Agreement, the consummation of the
transactions contemplated herein, the performance by the Corporation
of its obligations hereunder and the compliance by it with this
Agreement do not:
4.2.3.1 violate, contravene or breach, or constitute a
default under, the constating documents or by-laws of the
Corporation;
4.2.3.2 violate, contravene or breach, or constitute a
default under any contract, agreement, indenture, instruments,
or commitment to which the Corporation may be a party, or its
properties may be subject, or by which it is bound or affected;
or
4.2.3.3 violate, contravene or breach any applicable laws to
which the Corporation is subject;
4.2.4 the authorized capital of the Corporation consists of an
unlimited number of Class A Shares, an unlimited number of Class B
Shares, an unlimited number of Class C Shares, an unlimited number of
Class D Shares, an unlimited number of Class E Shares and an unlimited
number of Class F Shares. After giving effect to this Agreement, the
Finger Print Rollover Agreement, the Flat Panel Rollover Agreement and
the Widecom Subscription Agreement, the only shares of the Corporation
which are issued and outstanding are the Innovatech Shares, the fifty
(50) Class A shares issued to Finger Print pursuant to the Finger
Print Rollover Agreement, the fifty (50) Class A shares issued to Flat
Panel pursuant to the Flat Panel Rollover Agreement and the four
hundred and fifty (450) Class A shares issued to Widecom pursuant to
the Widecom Subscription Agreement, which shares are fully paid and
non-assessable;
4.2.5 no Person has any agreement, option, right or privilege
(whether pre-emptive or contractual) capable of becoming an agreement
for the purchase from the Corporation of any securities of the
Corporation other than as provided in the Shareholders Agreement;
4.2.6 neither the Corporation nor any of its respective directors,
officers, employees or agents has employed or incurred any liability
to any broker, finder or agent for any brokerage fees, finder's fees,
commissions or other amounts with respect to this Agreement or any of
the transactions contemplated hereby;
4.2.7 the Corporation is not a non-resident of Canada within the
meaning of the Income Tax Act (Canada).
4.3 Reliance on Representations and Warranties. Notwithstanding any
investigation conducted prior or subsequent to the date hereof, the parties
shall be entitled to rely upon the representations and warranties set forth
herein and the obligations of the parties with respect thereto shall survive
the execution of this Agreement for a period of three (3) years except for
the representations and warranties set forth in subsections 4.2.4 and 4.2.5
which shall survive indefinitely.
4.4 Representations and Warranties of Widecom. Widecom hereby agrees and
confirms that the representations and warranties made by it pursuant to
subsection 4.1 of the Widecom Subscription Agreement shall apply mutatis
mutandis in favour of Innovatech as if made in this Agreement and hereby
acknowledges and confirms that Innovatech is relying upon such
representations and warranties in connection herewith and would not have
entered into this Agreement without such representations and warranties.
Widecom hereby also agrees and confirms that the representations and
warranties made by it pursuant to Section 9 of the Widecom License Agreement
shall apply mutatis mutandis in favour of Innovatech as if made in this
Agreement and hereby also acknowledges and confirms that Innovatech is
relying upon such representations and warranties in connection herewith and
would not have entered into this Agreement without such representations and
warranties.
4.5 Representations and Warranties of Flat Panel. Flat Panel hereby
agrees and confirms that the representations and warranties made by it
pursuant to subsection 3.1 of the Flat Panel Rollover Agreement shall apply
mutatis mutandis in favour of Innovatech as if made in this Agreement and
hereby acknowledges and confirms that Innovatech is relying upon such
representations and warranties in connection herewith and would not have
entered into this Agreement without such representations and warranties.
4.6 Representations and Warranties of Finger Print. Finger Print hereby
agrees and confirms that the representations and warranties made by it
pursuant to subsection 3.1 of the Finger Print Rollover Agreement shall
apply mutatis mutandis in favour of Innovatech as if made in this Agreement
and hereby acknowledges and confirms that Innovatech is relying upon such
representations and warranties in connection herewith and would not have
entered into this Agreement without such representations and warranties.
SECTION 5. - INDEMNIFICATION
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5.1 The Corporation hereby covenants to indemnify and save harmless
Innovatech from and against any claims, demands, actions, causes of actions,
judgments, damages, losses (which shall include any diminution in value),
liabilities, costs or expenses (including, without limitation, interest,
penalties and reasonable attorneys' and experts' fees and disbursements)
which may be made against Innovatech or which it may suffer or incur solely
as a result of, arising out of or relating to any incorrectness in, or
breach of, any representation or warranty made by the Corporation in this
Agreement.
5.2 Widecom hereby covenants to indemnify and save harmless Innovatech
from and against any claims, demands, actions, causes of actions, judgments,
damages, losses (which shall include any diminution in value), liabilities,
costs or expenses (including, without limitation, interest, penalties and
reasonable attorneys' and experts' fees and disbursements) which may be made
against Innovatech or which it may suffer or incur solely as a result of,
arising out of or relating to any incorrectness in, or breach of, any
representation or warranty made by Widecom in this Agreement.
5.3 Flat Panel hereby covenants to indemnify and save harmless Innovatech
from and against any claims, demands, actions, causes of actions, judgments,
damages, losses (which shall include any diminution in value), liabilities,
costs or expenses (including, without limitation, interest, penalties and
reasonable attorneys' and experts' fees and disbursements) which may be made
against Innovatech or which it may suffer or incur solely as a result of,
arising out of or relating to any incorrectness in, or breach of, any
representation or warranty made by Flat Panel in this Agreement.
5.4 Finger Print hereby covenants to indemnify and save harmless
Innovatech from and against any claims, demands, actions, causes of actions,
judgments, damages, losses (which shall include any diminution in value),
liabilities, costs or expenses (including, without limitation, interest,
penalties and reasonable attorneys' and experts' fees and disbursements)
which may be made against Innovatech or which it may suffer or incur solely
as a result of, arising out of or relating to any incorrectness in, or
breach of, any representation or warranty made by Finger Print in this
Agreement.
SECTION 6. - GENERAL PROVISIONS
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6.1 Further Assurances. Each party upon the request of the others, shall
do, execute, acknowledge and deliver or cause to be done, executed,
acknowledged or delivered all such further acts, deeds, documents,
assignments, transfers, conveyances, powers of attorney and assurances as
may be reasonably necessary or desirable to effect complete consummation of
the transactions contemplated by this Agreement.
6.2 Successors in Interest. This Agreement and the provisions hereof
shall enure to the benefit of and be binding upon the parties and their
respective successors and permitted assigns.
6.3 Arbitration. Any dispute or controversy between the Corporation and
Innovatech relating to any matter arising out of or connected with the
rights and obligations of the parties hereto under this Agreement shall be
settled in accordance with the provisions of subsection 6.11 and Section 17
of the Shareholders Agreement.
6.4 Notices. All offers, acceptances, rejections, notices, requests,
authorizations, permissions directions, demands and other communications
hereunder shall be given in writing and shall be given by telecopier, or
delivered by hand, to the other party at the following addresses:
if to Innovatech: SOCIETE INNOVATECH DU GRAND MONTREAL
0000 Xxxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxx Xxxxxxxx
Telecopier: (000) 000-0000
if to the Corporation: 3294340 CANADA INC.
00 Xxxx Xxxxxx Xx.
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxx
X0X 0X0
Attention: President
Telecopier: (000) 000-0000
with a copy in all cases to: XXXXXXXX XXXXXXXXXX
0000 Xxxx-Xxxxxxxx Blvd. West
Suite 1400
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxxx Xxxxx
Telecopier: (000) 000-0000
with a copy in all cases to: XXXXXX O'NEIL
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxxx, Xxxxxx
X0X 0X0
Attention: Xxxx X'Xxxx
Telecopier: (000) 000-0000
or at such other address as the parties may have previously indicated to the
other parties in writing in conformity with the foregoing. Any such notice,
request, demand or other communication shall be deemed to have been received
on the date of delivery if delivered by hand, or the next Business Day
immediately following the date of transmission if sent by telecopier. The
original copy of any notice sent by telecopier shall be forwarded to the
other party by registered mail, receipt return requested.
6.5 Time of the essence. Time shall be of the essence in this Agreement.
6.6 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all of
which together shall constitute one and the same document.
6.7 Legal Fees. The Corporation hereby confirms that it shall pay for
all legal fees incurred by Innovatech in connection with the preparation
and/or review of this Agreement, as well as all other agreements executed on
this day among Innovatech, Widecom, Finger Print, Flat Panel and the
Corporation.
6.8 Use of Subscription Price. The Corporation hereby confirms that the
aggregate subscription price paid by Innovatech for the Innovatech Shares
shall be used by it substantially for the purposes and in the manner set out
in the business plan prepared by Widecom dated March 14, 1996, as amended on
July 31, 1996.
6.9 Language. The parties hereto agree that this Agreement as well as
all documentation contemplated hereby or pertaining hereto or to be executed
in connection herewith be drawn up in the English language; les parties
consentent a l'effet que cette convention de meme que tous documents
envisages par les presentes ou y ayant trait ou qui seront signes
relativement aux presentes soient rediges en anglais.
IN WITNESS WHEREOF, the parties have signed at the place and on the
date first hereinabove mentioned.
SOCIETE INNOVATECH DU GRAND MONTREAL
Per:
Xxxxxxx Xxxxxx
3294340 CANADA INC.
Per:
Raja X. Xxxx
INTERVENTION
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AND TO THESE PRESENTS DOES INTERVENE the undersigned, who hereby takes
cognizance of this Agreement and agrees to be bound by the provisions of
subsections 4.4 and 5.2 of this Agreement which are applicable to it.
Montreal, this 2nd day of October, 1996.
THE WIDECOM GROUP INC.
Per:
INTERVENTION
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AND TO THESE PRESENTS DOES INTERVENE the undersigned, who hereby takes
cognizance of this Agreement and agrees to be bound by the provisions of
subsections 4.5 and 5.3 of this Agreement which are applicable to it.
Montreal, this 2nd day of October, 1996.
3294421 CANADA INC.
Per:
INTERVENTION
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AND TO THESE PRESENTS DOES INTERVENE the undersigned, who hereby takes
cognizance of this Agreement and agrees to be bound by the provisions of
subsections 4.6 and 5.4 of this Agreement which are applicable to it.
Montreal, this 2nd day of October, 1996.
3294412 CANADA INC.
Per:
SOLIDARY UNDERTAKING
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The undersigned hereby takes cognizance of this Agreement and agrees
to be solidarily bound with 3299421 Canada Inc. in respect of the
representations, warranties and indemnifications made by 3294421 Canada Inc.
pursuant to subsections 4.5 and 5.3 of this Agreement and to be solidarily
bound with 3294412 Canada Inc. in respect of the representations, warranties
and indemnifications made by 3294412 Canada Inc. pursuant to subsections 4.6
and 5.4 of this Agreement.
Montreal, this 2nd day of October, 1996.
RAJA X. XXXX
