ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made and entered
into as of May 2, 1997, by and between PowerTrader, Inc., a Delaware corporation
(the "PURCHASER") and West Coast Title Search Ltd., a British Columbia
corporation (the "SELLER").
W I T N E S S E T H:
WHEREAS, SELLER owns all of the rights, title and interest, throughout
the world, in and to the software, hardware and source code known as Omen III
("Omen III"), and certain assets related to Omen III (together with Omen III,
the "Purchased Assets"); and
WHEREAS, PURCHASER has conducted its due diligence with respect to its
interest in purchasing the Purchased Assets from the SELLER; and
WHEREAS, PURCHASER wishes to purchase the Purchased Assets from the
SELLER on the terms and conditions contained herein;
NOW THEREFORE, in consideration of the premises and of the agreements
and provisions set forth herein, and subject to the conditions herein contained,
it is mutually agreed as follows:
SECTION I - PURCHASE AND SALE OF PURCHASED ASSETS
1.1 Agreement to Purchase. Upon the terms and subject to the conditions
set forth in this Agreement, and in reliance upon the representations,
warranties and covenants made in this Agreement, PURCHASER agrees to purchase at
the Closing (as defined below in Section 1.4), and SELLER agrees to sell,
transfer, grant, convey and assign to PURCHASER at the Closing, the Purchased
Assets, which include the following assets and properties:
(a) Omen III;
(b) all NeXT Computer equipment and supplies, including the
operating system, any peripherals, all software, hardware and
development tools set forth in the Disclosure Schedule attached hereto
as Exhibit A ("NeXT Computer");
(c) the technical specifications of Omen III, including all
studies, analysis and reports, generally known as the High Level
Technical Design and as set forth on the Disclosure Schedule ("HLTD");
(d) that certain High Level Technical Design License
Agreement dated August 4 between SELLER and Grandmaster
Technologies, Inc. (the "Grandmaster Agreement");
(e) all records, correspondence, technical, accounting,
manufacturing and procedural manuals, advertising and promotional
materials, customer lists, cost sheets, vendor information, employment
records, reports relating to the Purchased Assets or the general
condition of the Purchased Assets and any confidential information
relating to the Purchased Assets which has been reduced to writing
(including all originals and reproducible copies of each of the
foregoing and magnetic tapes and machine readable codes or other media
reasonably necessary to generate the foregoing) in SELLER'S possession
or control;
(f) all claims, prepayments, refunds, causes of action, choses
in action, rights of recovery, rights of set-off, rights of recoupment
relating to the Purchased Assets and rights to xxx for any past
infringement; and
(g) all of SELLER's right, title and interest in and to all
intangible property rights relating to the Purchased Assets, including
but not limited to, the copyright and any renewal and extension
thereof, the right to patent the Purchased Assets or any part thereof,
the right to claim priority thereof, the trademark and logo.
1.2 Purchase Price. In consideration of the transfer by SELLER to
PURCHASER of the Purchased Assets, PURCHASER shall pay to SELLER Two Hundred
Eighty-Five Thousand Canadian Dollars (CDN$285,000), and issue to SELLER One
Hundred Twenty-Five Thousand (125,000) shares of PURCHASER'S common stock
(collectively, the "Purchase Price"), in accordance with the provisions of
Section 1.3.
1.3 Terms of Payment. The Purchase Price will be payable to SELLER by
PURCHASER as follows:
(a) Two Hundred Eighty Five Thousand Canadian Dollars
(CDN$285,000.00) in cash on the date that American Stock Transfer and
Trust Company ("AST") as escrow agent under a certain Escrow Agreement
dated as of April 4, 1997 disburses to PURCHASER the proceeds of the
current public offering of PURCHASER'S securities (the "Offering") with
respect to which a registration statement on Form SB-2 (No. 333-20121)
(the "Registration Statement") has been declared effective by the
Securities Exchange Commission under the Securities Act of 1933, as
amended (the "Act"), but in any case not later than November 3, 1997;
and,
(b) One Hundred Twenty-Five Thousand (125,000) shares of
PURCHASER'S common stock (the "Shares") to be issued on the date this
Agreement is executed, subject to any restrictions imposed by the Act.
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1.4 Closing. The purchase and sale of the Purchased Assets, and the
consummation of all other transactions contemplated hereby (the "Closing") shall
take place at the offices of PowerTrader, Inc., Xxxxx 000, 000 Xxxxxxxx Xxxxxx,
Xxxxxxxxx, X.X. X0X 0X0 at 10:00 a.m. on May 2, 1997, concurrent with the
execution of this Agreement (the "Closing Date"). At the Closing, title and risk
of loss to the Purchased Assets shall pass from SELLER to PURCHASER. However, as
security for the due and prompt payment of that portion of the Purchase Price to
be paid in accordance with Section 1.3(a) above, all tangible expressions of the
Purchased Assets and the Shares shall be deposited with Kerr, Redekop, Leinburd
& Xxxxxxx, as escrow agent (the "Closing Escrow Agent") to be held and disbursed
in accordance with the Closing Escrow Agreement, a form of which is attached
hereto as Exhibit B.
Simultaneously, the parties hereto shall execute and deliver to the
Closing Escrow Agent such other documents and instruments as are required to be
delivered pursuant to this Agreement, a duly executed and witnessed Warranty
Xxxx of Sale (in the form of Exhibit C hereto) and such other documents and
instruments as are required or desirable in the opinion of PURCHASER's counsel
to effectively vest in PURCHASER full, indefeasible, merchantable, legal,
equitable and beneficial title to the Purchased Assets with full substitution
and subrogation to all rights and actions of warranty, free and clear of all
debts, claims, securities, means, encumbrances and other title retention
agreements, pledges, assessments, covenants, restrictions and charges of every
nature (each an "Encumbrance").
1.5 Assumption of Liabilities. PURCHASER shall not assume, or take
title to the Purchased Assets subject to, or in any way be liable, obligated or
responsible for any liabilities or obligations of SELLER, including without
limitation, (i) any liability or obligation of SELLER under any mortgage, deed
of trust, security agreement, financing statement or capital lease or any note,
bond or other instruments secured thereby, (ii) any liability or obligation of
SELLER existing at or arising after the Closing under any contract, agreement,
license, permit and any other instrument which results from the breach or
wrongful action or inaction of SELLER prior to the Closing, or (iii) any tax
liability, including sales and use tax, accruing prior to the Closing; provided,
however, that PURCHASER shall assume all obligations and liabilities of SELLER
under the Grandmaster Agreement, in accordance with the terms and conditions of
the Assignment and Assumption Agreement attached hereto as Exhibit D.
1.6 Tax Payments. PURCHASER shall pay and discharge any and all sales,
use, gross receipts, transfer or other transaction tax which may be imposed upon
or measured by the value of any sale, transfer or conveyance under this
Agreement.
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1.7 PURCHASER Acknowledgement. PURCHASER acknowledges that the
Purchased Assets might not meet the requirements of PURCHASER or that the
operation of any of the Purchased Assets might not be uninterrupted or error
free. PURCHASER further acknowledges that the SELLER has not, except as set
forth in this Agreement, made any warranties of merchantability or fitness for a
particular purpose, and such warranties are therefore expressly excluded.
SECTION II - REPRESENTATIONS
AND WARRANTIES OF SELLER
As an inducement to PURCHASER to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby, SELLER hereby
makes the following representations, warranties and covenants with, to and for
the benefit of PURCHASER.
2.1 Organization, Standing and Qualification of SELLER. SELLER is a
corporation duly organized, validly existing, and in good standing under the
laws of the Province of British Columbia, has all requisite power and authority
to carry on lawfully its business as now conducted and as proposed to be
conducted, and is in good standing or existence in all other jurisdictions in
which SELLER is required to be registered or qualified to do business, except
where the failure to be so registered or qualified would not have a material
adverse affect on the Purchased Assets.
2.2 Authority. SELLER has full power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby, which have
been duly authorized by all proper and necessary corporate and other action on
the part of SELLER and no further authorization, consent or approval of SELLER,
its board of directors or shareholders, or of any regulatory body or third-party
is required as a condition to the validity of this Agreement or to give effect
to the transactions contemplated hereby. This Agreement constitutes a valid and
binding agreement of SELLER and is enforceable against it in accordance with its
terms.
2.3 Compliance with Other Instruments. SELLER is not in violation of
any provisions of its governing instruments, as amended and in effect as of the
Closing, or any provision of any mortgage, indenture, contract, agreement,
instrument, judgment or decree to which it is a party or by which it is bound,
or of any provision of any jurisdiction or judgment, writ, decree, order,
statute, rule or governmental regulation applicable to it or the Purchased
Assets. The execution, delivery and performance of this Agreement will not
result in any such violation or be in conflict with, constitute a default or
accelerate or augment the performance otherwise required under, any such
documents and instruments and will not result in the creation of any Encumbrance
upon any of the Purchased Assets.
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2.4 Adverse Liabilities. There is no liability or obligation, secured
or unsecured, whether accrued, absolute or contingent affecting the Purchased
Assets, and there is no reasonable basis for the imposition of any unasserted or
other liability or obligation.
2.5 Title to and Condition of the Purchased Assets. Except as set forth
in the Disclosure Schedule, all of Omen III is original and does not incorporate
any component authored by another person. SELLER has good and marketable title
to all of the Purchased Assets and the Purchased Assets are free and clear of
all Encumbrances.
2.6 Litigation. Except as set forth in the Disclosure Schedule, there
are no legal actions, suits, arbitrations or other legal, administrative or
governmental proceedings pending or, to the knowledge of SELLER, threatened
against the Purchased Assets or SELLER. SELLER is not aware of any facts which
might result in or form the basis for any such action, suit or other proceeding.
SELLER is not in default with respect to any judgment, order, injunction or
decree of any court or any governmental agency or instrumentality.
2.7 Contracts. Except for the Grandmaster Agreement, SELLER is not a
party to, nor are any of the Purchased Assets bound by, any agreement,
indenture, mortgage, license or lease between SELLER and any third party
relating to the Purchased Assets.
2.8 Intellectual Property. SELLER does not utilize any patent, patent
right, patent application, trademark, trademark application, service xxxx,
service xxxx application, trade name, copyright, copy application, software,
trade secret, confidential information or proprietary know-how, related to the
Purchased Assets, except for those listed in the Disclosure Schedule. All such
ideas and or forms of expression contained or reflected therein are referred to
herein as the Intellectual Property. All of the Intellectual Property is owned
by SELLER free and clear of any Encumbrances, royalty obligations, licenses and
sub-licenses, except as set forth in the Disclosure Schedule. SELLER has not
unlawfully or wrongfully used any Intellectual Property owned or claimed by
another. SELLER is not in default under, nor has it received any notice of any
claim of infringement or of any other claim or proceeding relating to, any such
Intellectual Property. No present or former employee of SELLER and no other
person owns or has a proprietary, financial or other interest, direct or
indirect in whole or in part in any Intellectual Property.
2.9 Compliance with Regulation S.
(a) SELLER has received, carefully read and is familiar
with the Registration Statement of PURCHASER and all of the documents
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filed or required to be filed by PURCHASER with the Securities and
Exchange Commission (the "Securities Filing"). SELLER is familiar with
PURCHASER's business, plans and financial condition, the terms of the
Offering and any other matters relating to the Offering. SELLER has
received all materials which have been requested by SELLER, has had
reasonable opportunity to ask questions of PURCHASER and its
representatives, and PURCHASER and its representatives have answered
all inquiries that SELLER or SELLER's representatives have put to it.
SELLER has had access to all additional information necessary to verify
the accuracy of the information set forth in the Registration Statement
and the Securities Filings and any other materials furnished herewith,
and has taken all the steps necessary to evaluate the merits and risks
of an investment in the Shares, as proposed hereunder.
(b) SELLER has such knowledge and experience in finance,
securities, investments and other business matters so as to be able to
protect the interests of SELLER in connection with this transaction,
and SELLER's investment in PURCHASER hereunder is not material when
compared to SELLER's total financial capacity.
(c) SELLER understands the various risks of an investment in
PURCHASER as proposed herein and can afford to bear such risks,
including without limitation, the risk of losing the entire investment
of SELLER in the Shares.
(d) There is no present trading market for the Shares and
there can be no assurance that a market for the Shares will develop in
the future. SELLER acknowledges that the number of shares presently
available for purchase and sale in the hands of the general public is
relatively small. Consequently, trading in the Shares has not been
consistently active. Accordingly, SELLER may find it impossible to
liquidate the investment of SELLER in the Shares at a time when it may
be necessary or desirable to do so or at any time. Moreover, future
sales of substantial amounts of the Shares in the public market
following the Offering, or the availability of such shares for sale,
could affect the prevailing market price of the Shares and may make it
more difficult for SELLER to liquidate SELLER's investment in the
future at times and prices which SELLER deems appropriate.
(e) SELLER has been advised by PURCHASER that: (i) none of the
Shares have been registered under the Act, (ii) the Shares will be
issued on the basis of the statutory exemption provided by Regulation S
relating to offers and sales of securities that occur outside of the
United States, (iii) this transaction has not been reviewed by, passed
on or submitted to any governmental or self-regulatory organization,
and (iv) PURCHASER's reliance upon Regulation S is based in part upon
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the representations made by SELLER in this Agreement. SELLER
acknowledges that SELLER has been informed by the PURCHASER and its
representatives of, or is otherwise familiar with, the nature of the
limitations imposed by the Securities Act and the rules and regulations
thereunder on the transfer of the Shares. In particular, SELLER agrees
that no sale, transfer or other disposition of any of the Shares shall
be valid or effective, and PURCHASER shall not be required to give
effect to any such sale, transfer or other disposition, during the
40-day period commencing on the date of the execution of this Agreement
(the "Restricted Period"), unless: (A) the Shares are sold, transferred
or disposed of in accordance with all of the conditions of Regulation
S, (B) the sale, transfer or other disposition of such Shares is
registered under the Securities Act, or (C) the sale, transfer or
disposition is otherwise exempt from registration under the Securities
Act. SELLER further understands that an opinion of counsel or other
documentation may be required to transfer the Shares and that the
Shares shall be subject to a stop transfer order on the records of
PURCHASER or its transfer agent during the Restricted Period and the
certificate representing the Shares will bear a legend describing the
restrictions imposed on the transfer of the Shares. Upon expiration of
the Restriction Period and at the request of the SELLER, PURCHASER
shall instruct its transfer agent to remove such legend.
(f) SELLER will acquire the Shares for SELLER's own account
for investment and not with a view to the sale or disposition thereof
or the granting of any participation therein. SELLER has no present
intention of distributing or selling to others any interest in the
Shares or granting any participation therein.
(g) It never has been represented, guaranteed or warranted by
PURCHASER or any of its representatives, officers, directors,
shareholders, partners, employees or agents, or any other person,
whether expressly or by implication, that: (i) PURCHASER or SELLER will
realize any given percentage of profits and/or amount or type of
consideration, profit or loss, as a result of PURCHASER's activities or
SELLER's investment in PURCHASER, or (ii) the past performance or
experience of the management of PURCHASER, or of any other person, will
in any way indicate the potential results of PURCHASER's activities or
the ownership of the Shares.
(h) No oral or written information has been provided or
representations have been made other than as stated in this Agreement,
the Registration Statement or the Securities Filings; and no oral or
written information furnished to SELLER or SELLER's advisors in
connection with the Offering were in any way inconsistent with the
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information stated in this Agreement, the Registration Statement or the
Securities Filings.
(i) SELLER is not a "U.S. Person" as that term is defined by
Rule 902(O) of Regulation S. PURCHASER did not offer to sell or solicit
an offer to buy from SELLER, nor did SELLER offer to purchase or
solicit an offer to sell the Shares from PURCHASER, at a time when
SELLER or any of SELLER's agents or representatives, acting as such in
connection with the Offering, were physically located within the United
States. At the time this Agreement was executed, SELLER was physically
located outside the United States. SELLER is not acquiring Shares as a
result of or, to SELLER's knowledge, subsequent to any activity
undertaken for the purpose of, or that could reasonably be expected to
have the effect of, conditioning the market in the United States for
the Shares, including, any advertisement, article, notice or other
communication published in any newspaper, magazine or other publication
of general circulation in the United States.
SECTION III - REPRESENTATIONS,
WARRANTIES AND COVENANTS OF PURCHASER
As an inducement to SELLER to execute, deliver and perform this
Agreement and to consummate the transactions contemplated hereby, PURCHASER
hereby makes the following representations, warranties and covenants with, to
and for the benefit of SELLER.
3.1 Organization, Standing and Authorization. PURCHASER is a
corporation duly organized, validly existing and in good standing under the laws
of the jurisdiction of its organization and has all requisite corporate power
and authority to carry on lawfully its business as now conducted and as proposed
to be conducted, and is qualified as a foreign corporation in good standing or
existence in all other jurisdictions of which such qualification is required.
PURCHASER has in effect all governmental authorizations, franchises, licenses
and permits necessary and required for it to carry on its business as currently
being conducted.
3.2 Authority. PURCHASER has full power and authority to enter into
this Agreement and to consummate the transactions contemplated hereby, which has
been duly authorized by all proper and necessary corporate and other action on
the part of PURCHASER and no further authorization, consent or approval of
PURCHASER, or its members, or of any regulatory body or third-party is required
a condition to the validity of this Agreement or to give effect to the
transactions contemplated hereby. This Agreement constitutes a valid and binding
agreement of PURCHASER and is enforceable against PURCHASER in accordance with
its terms.
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3.3 Registration. The PURCHASER's Common Stock is duly registered under
the Securities Exchange Act of 1934, as amended.
3.4 Compliance with Other Instruments. The execution, delivery and
performance of this Agreement will not result in the violation of any of the
provisions of the governing instruments of PURCHASER or any provision of any
mortgage, indenture, contract, agreement, instrument, judgment or decree to
which PURCHASER is a party or by which PURCHASER is bound, or of any provision
of any judgment, writ, decree order, statute, rule or governmental regulation
applicable to PURCHASER.
3.5 Litigation. Except as set forth in the Disclosure Schedule, there
are no legal actions, suits, arbitrations or other legal, administrative or
governmental proceedings pending or, to the knowledge of PURCHASER, threatened
against PURCHASER or its properties, assets or business and PURCHASER is not
aware of any facts which might result in or form the basis for any such action,
suit or other proceeding. PURCHASER is not in default with respect to any
judgment, order, injunction or decree of any court or any governmental agency or
instrumentality.
SECTION IV - CONDITIONS PRECEDENT
TO OBLIGATIONS OF PURCHASER
The obligations of PURCHASER under this Agreement are subject to the
fulfillment, on or before the Closing Date, of the following conditions
precedent, each of which may be waived in writing in the sole discretion of
PURCHASER.
4.1 Truth of Representations and Warranties; Compliance with Covenants
and Obligations. The representations and warranties of SELLER shall be true on
and as of the Closing Date in all material respects as those such
representations and warranties were made on and as of such date. SELLER shall
have performed and complied in all material respects with all terms, conditions,
covenants, obligations, agreements and restrictions required by this Agreement
to be performed or complied with by it prior to or at the Closing Date.
4.2 Consents of Third Parties. SELLER shall have received all requisite
consents and approvals of all third parties whose consent or approval is
required in order for SELLER to consummate the transactions contemplated by this
Agreement.
4.3 Adverse Proceedings. No action or proceeding by or before any court
or other governmental body shall have been instituted by any governmental body
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or person whatsoever which shall seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement or which might affect the right of
PURCHASER to own the Purchased Assets and direct the operation of the Purchased
Assets after the Closing.
4.4 Closing Deliveries. PURCHASER shall have received at or prior to
the Closing each of the following documents:
(a) A Warranty Xxxx of Sale substantially in the form attached
hereto as Exhibit C executed by SELLER;
(b) Such other instruments of conveyance, assignment and
transfer, in form and substance reasonably satisfactory to PURCHASER,
as shall be necessary or appropriate to convey, transfer and assign to
and to vest in PURCHASER, good and marketable title in and to the
Purchased Assets;
(c) Such certificates of SELLER and such other documents
evidencing satisfaction of the conditions specified in this Section IV
as PURCHASER shall reasonably request;
(d) A certificate of the Secretary of SELLER attesting to the
incumbency of SELLER's officers and the authenticity of those
resolutions authorizing the transactions contemplated by the Agreement;
and
(e) Such other documents, instruments or certificates as
PURCHASER may reasonably request.
SECTION V - CONDITIONS PRECEDENT TO
OBLIGATIONS OF SELLER
The obligations of SELLER under this Agreement are subject to the
fulfillment, on or before the Closing Date, of the following conditions
precedent, each of which may be waived in writing at the sole discretion of
SELLER.
5.1 Truth of Representations and Warranties; Compliance with Covenants
and Obligations. The representations and warranties of PURCHASER in this
Agreement shall be true on and as of the Closing Date in all material respects
as though such representations and warranties were made on and as of such date.
PURCHASER shall have performed and complied in all material respects with all
terms, conditions, obligations, agreements and restrictions required by this
Agreement to be performed or complied with by it prior to or at the Closing
Date.
5.2 Corporation Proceedings. All corporate and other proceedings
required to be taken on the part of PURCHASER to authorize or carry out this
Agreement shall have been taken.
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5.3 Consents of Third Parties. PURCHASER shall have received all
requisite consents and approvals of all third parties whose consent or approval
is required in order for PURCHASER to consummate the transactions contemplated
by this Agreement.
5.4 Adverse Proceedings. No action or proceeding by or before any court
or other governmental body shall have been instituted by any governmental body
or person whatsoever which shall seek to restrain, prohibit or invalidate the
transactions contemplated by this Agreement or which is reasonably likely to
affect the right of SELLER to transfer the Purchased Assets.
5.5 Closing Deliveries. SELLER shall have received at or prior to the
Closing each of the following documents:
(a) One Hundred Twenty-Five Thousand shares of the Common
Stock of PURCHASER;
(b) A certificate of the Secretary of PURCHASER attesting to
the incumbency of officers of PURCHASER and the authenticity of
resolutions authorizing the transactions contemplated by this
Agreement; and
(c) Such other documents, instruments or certificates as
SELLER may reasonably request.
SECTION VI - INDEMNIFICATION
6.1 Indemnification by PURCHASER. PURCHASER agrees to defend, indemnify
and hold SELLER, its directors, officers, employees and agents harmless from and
against any loss, claim, damage, liability or expense (including attorneys' fees
and costs) incurred or sustained by SELLER on account of (a) any
misrepresentation or breach of representation, warranty, covenant or agreement
of PURCHASER in this Agreement, or in any Exhibit attached hereto, or (b) any
liability or obligation of PURCHASER or (c) the operation, ownership or use of
the Purchased Assets subsequent to the Closing Date.
6.2 Indemnification by SELLER. SELLER agrees to defend, indemnify and
hold PURCHASER, its directors, officers, employees and agents harmless from and
against any loss, claim, damage, liability or expense (including attorneys' fees
and costs) incurred or sustained by PURCHASER or its directors, officers,
employees or agents on account of (a) any misrepresentation or breach of
representation, warranty, covenant or agreement of SELLER in this Agreement or
in any Exhibit hereto or (b) any liability or obligation of SELLER or (c) the
operation, ownership or use of the Purchased Assets prior to the Closing Date.
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6.3 Claims for Indemnification. Whenever any claim shall arise for
indemnification hereunder, the party seeking indemnification (the "Indemnified
Party"), shall promptly notify the party from whom indemnification is sought
(the "Indemnifying Party") of the claim and, when known, the facts constituting
the basis for such claim; provided, however, that no delay on the part of the
Indemnified Party notifying any Indemnifying Party shall relieve the
Indemnifying Party from any liability or obligation hereunder except to the
extent of any damage or liability caused by or arising out of such failure;
provided, further, however, that no claim for indemnification may be asserted by
an Indemnified Party unless notice of the claim shall have been delivered on or
before the date which is 2 years and 30 days after the Closing Date. In the
event of any such claim for indemnification hereunder resulting from or in
connection with any claim or legal proceedings by a third party, the notice to
the Indemnifying Party shall specify, if known, the amount or estimate of the
amount of the liability arising therefrom. The Indemnified Party shall not
settle or compromise any claim by a third party from which it is seeking
indemnification hereunder without the prior written consent of the Indemnifying
Party, which shall not be unreasonably withheld, unless the Indemnifying Party
shall not have taken control of the defense of such claim as provided in Section
6.4 of this Agreement, after notification thereof pursuant to this Section 6.3.
6.4 Defense by Indemnifying Party. In connection with any claim giving
rise to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person who is not a party to this Agreement, the Indemnifying
Party at its sole cost and expense may upon written notice to the Indemnified
Party given within 20 days after the date of the notice of the claim from the
Indemnified Party pursuant to Section 6.3 assume the defense of such claim or
legal proceeding with counsel approved by the Indemnified Party, which approval
shall not be unreasonably withheld, if (i) the Indemnifying Party acknowledges
to the Indemnified Party in writing the Indemnifying Party's obligations to
indemnify the Indemnified Party with respect to all elements of such claim, (ii)
the third party seeks monetary damages only and (iii) an adverse resolution of
the third party's claim would not have a materially adverse effect on the good
will or the reputation of PURCHASER or SELLER or the future operation, ownership
or use of the Purchased Assets. If the Indemnifying Party so assumes such
defense, the Indemnified Party shall be entitled to participate in (but not
control) such defense with its counsel and at its own expense (except that the
Indemnifying Party will be responsible for the reasonable fees and expenses of
separate co-counsel to the extent the Indemnified Party reasonably concludes
that the counsel that the Indemnifying Party has selected has a conflict of
interest). In addition, if the Indemnifying Party so assumes such defense it
shall take all steps necessary in the defense or settlement thereof; provided,
however, that the Indemnifying Party shall not consent to any settlement or to
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the entry of any judgment with respect to a claim or legal proceeding which does
not include a separate release of the Indemnified Party from all liability with
respect thereto without the written consent of the Indemnified Party. If the
Indemnifying Party does not or is not permitted under the terms hereof to assume
the defense of any such claim or legal proceeding (a) the Indemnified Party may
defend such claim against such claim or legal proceeding (with the Indemnifying
Party responsible for the reasonable fees and expenses of counsel for the
Indemnified Party) in such manner as it may deem appropriate (including but not
limited to settling such claim or legal proceeding on such terms as the
Indemnified Party may deem appropriate and (b) the Indemnifying Party shall be
entitled to participate in (but not control) the defense of such action, with
its counsel and at its own expense.
SECTION VII - TERMINATION
7.1 Pre-Closing. This Agreement may be terminated at any time at or
prior to the Closing:
(a) By the mutual written agreement of SELLER and PURCHASER;
or
(b) By either party, upon written notice to the other, in the
event the transactions contemplated by this Agreement are not
consummated on or before June 15, 1997.
7.2 Post-Closing. This Agreement may be terminated at any time on or
after November 3, 1997, by either party, upon notice to the other, in the event
that PURCHASER shall not have received a disbursement from AST with respect to
the Offering on or before November 3, 1997.
In the event of the termination of this Agreement pursuant to this
Section VII, this Agreement shall thereafter become void and have no effect, ab
initio, and no party hereto shall have any liability to the other or their
respective shareholders or directors or officers in respect thereof, except that
nothing herein shall relieve any party from liability from any breach of this
Agreement prior to such termination.
SECTION VIII - CONDUCT PENDING RELEASE OF CLOSING ESCROW
From and after the execution hereof, SELLER:
(a) Shall not directly or indirectly, through any officer,
director, agent or otherwise solicit or initiate, directly or
indirectly, or encourage submission of inquiries, proposals or offers
from any potential buyer (other than the PURCHASER) or participate in
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any discussions or negotiations regarding, or furnish any person any
information with respect to, the sale or disposition of all or any
portion of the Purchased Assets;
(b) Shall not, without the consent of PURCHASER engage in any
transaction relating to the Purchased Assets, including without
limitation the following:
(i) Enter into any contract;
(ii) Grant or allow to attach any Encumbrance to the
Purchased Assets; and
(iii) Waive, cancel or compromise any rights;
(c) Shall, in all material respects, continue to:
(i) Maintain and preserve the Purchased Assets to
quality standards acceptable to PURCHASER;
(ii) Maintain its books, accounts and records in the
usual manner consistent with current practice; and
(iii) Duly comply with all applicable laws.
SECTION IX - MISCELLANEOUS
9.1 Further Assurances. If at any time after the Closing, PURCHASER
shall determine or be advised that any further assignments or assurances in law
or any other acts are necessary, desirable or proper: (a) to vest, perfect or
confirm, of record or otherwise, in PURCHASER the title to and possession of the
Purchased Assets or any other property, right or interest acquired or to be
acquired as a result of the Closing, or (b) otherwise to carry out the purposes
of this Agreement, SELLER agrees to promptly execute and deliver all such
assignments, consent, deeds, documents, instruments and assurances in law and do
all acts necessary, deemed desirable or proper by PURCHASER to vest, perfect or
confirm, of record or otherwise, title to or possession of the Purchased Assets
or to such other property, right or interest in PURCHASER and otherwise to carry
out the purposes of this Agreement.
9.2 Survival of Representations, Warranties, Covenants and Agreements.
The representations, warranties, covenants and agreements of PURCHASER and
SELLER shall survive the Closing.
9.3 Notices. Any notice or other communication required or permitted
hereunder shall be sufficiently given if delivered personally or sent by
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overnight courier, registered or certified mail or by next business day courier,
postage or charges prepaid, addressed, in the case of PURCHASER, to:
PowerTrader, Inc.
Xxxxx 000, 000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx X. Xxxxx, Esq.
Gallop, Xxxxxxx and Xxxxxx, X.X.
000 X. Xxxxxx, Xxxxx 0000
Xx. Xxxxx, XX 00000
or, in the case of SELLER, to:
West Coast Title Search Ltd.
LEGAL NOTICE
00 Xxxxx Xxxxxx
Xxx Xxxxxxxxxxx, X.X. X0X 0X0
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxx Redekop Leinburd & Xxxxxxx
Barristers and Solicitors
000-0000 Xxxx Xxxxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Attention: Xxxx X. Xxxx, Esq.
or to such other person or address as shall be furnished in writing by any party
to the other party prior to the giving of the applicable notice or
communication. Any such notice or communication shall be deemed to have been
given as of the date personally delivered, mailed or delivered to a next
business day delivery courier.
9.4 Specific Performance. In the event of a breach by any party hereto
of any of its obligations hereunder for any reason, any other party shall have
the option, exercisable in its sole discretion, to enforce the terms of this
Agreement by decree of specific performance, it being agreed and understood that
the Purchased Assets are unique and not readily available in the open market.
Should any party elect to pursue the remedy of specific performance, such remedy
shall not be exclusive, and the breaching party shall also be liable for damages
should such other party elect to pursue such an action.
9.5 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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9.6 Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement, and shall not be deemed to limit or affect
any of the provisions hereof.
9.7 Miscellaneous. This Agreement (including the Exhibits hereto, which
form a part of this Agreement as fully as if incorporated herein at each point
of reference thereto):
(a) constitutes the entire agreement and understanding and
supersedes all prior agreements and understandings, both written and
oral, among the parties with respect to the subject matter hereof;
(b) shall not confer any rights or remedies hereunder upon any
person other than the parties to this Agreement and their successors
and assigns, and no person shall be deemed to be a third party
beneficiary of any portion of this Agreement;
(c) shall be governed, in all respects, including validity,
interpretation and effect, by the laws of British Columbia;
(d) shall be binding upon and inure to the benefit of the
parties hereto and their respective successors, assigns, heirs, and
legal representatives; and
(e) the parties agree that time is of the essence in this
Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
"PURCHASER"
POWERTRADER, INC.
By: /s/ Xxxxxxx X. Xxxxxxx
------------------------------
Xxxxxxx X. Xxxxxxx, President
"SELLER"
West Coast Title Search Ltd
By: /s/ Xxxxx Xxxxxxx
------------------------------
Name: Xxxxx Xxxxxxx
Title: President
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