Sultan, here are the key provisions of the agreement which may answer some of your questions.
Note: I've scanned this from the Notice Of A Special Meeting document.
An interesting provison (later in the document) outlines that 40% of the shares held by Brian Edwards (Pres & CEO) and Rory Olson (EVP & COO) on June 8, 1998 will be held in escrow until late 1999.
5. AGREEMENT BETWEEN THE CORPORATION AND BELL CANADA
On July 31, 1998, the Corporation and Bell Canada entered into an agreement (the "Agreement") pursuant to which the Corporation has agreed to acquire the Bell Emergis electronic commerce operations known as "Electronic Business Solutions" (the "E-Commerce Business") from Bell Canada in consideration of the issuance to Bell Canada of such number of common shares of the Corporation as will represent immediately after such issuance 65% of the aggregate of all issued and outstanding common shares of the Corporation as at the Closing Date (as defined hereunder) and all unissued common shares of the Corporation which may be issued pursuant to the exercise of any warrants, options ,, other rights of the Corporation outstanding as at Closing Date .
Bell Canada, the largest Canadian telecommunications operating company, markets products and services to more than seven million business and residential customers in Ontario and Quebec. Bell Emergis, a division of Bell Canada, creates communications and network applications, next generation multimedia and internetworking platforms as well as information technology solutions .
The completion of the transaction contemplated by the Agreement (the "Closing") is expected to take place on or about August 31, 1998 (the "Closing Date"). The Closing is subject to approval of the Agreement by the shareholders of the Corporation. At the Meeting, shareholders will be asked to pass a resolution, the full text of which is reproduced as Schedule A hereto, approving the Agreement.
Information in respect of the Bell Emergis electronic commerce operations known as "Electronic Business Solutions" appears below under the heading "The E-Commerce Business".
Assets purchased under the Agreement
The E-Commerce Business which the Corporation shall acquire under the Agreement on the Closing Date includes the following assets (the "Purchased Assets"):
a) fixed assets having a net book value of approximately $82,000;
b) all rights, title and interest of Bell Canada in the material contracts and engagements related to the carrying on of the E-Commerce Business (the "Contracts"), the Corporation having agreed to assume, as of the Closing Date, all liabilities and obligations of Bell Canada under the Contracts, to the complete exoneration of Bell Canada;
c) all rights, title and interest of Bell Canada in the material intellectual property assets owned, licensed or used by Bell Canada in carrying on the E-Commerce Business ;
d) accounts receivable due or accruing to Bell Canada as at the Closing Date in connection with the E-Commerce Business equal to the face amount of $14,000,000 (excluding taxes) subject to a full cash compensation by Bell Canada in favour of the Corporation in the event that less than the face amount thereof has been collected within 90 days following the Closing Date or, at Bell Canada's option at Closing, a cash amount of $13,580,000 in substitution;
e) a cash amount of $54,000,000;
f) all records, files and other documentation relating to the E-Commerce Business, including all customer lists of the E-Commerce Business; and
g) the goodwill of the E-Commerce Business.
Under the Agreement, Bell Canada has represented and warranted that the schedules thereto showing gross revenues for the E-Commerce Business of $71,694,000, on a revenue by product basis, for the fifteen-month period ended March 31, 1998, fairly present, in all material respects, the gross revenues for said period as reported by Deloitte & Touche in their special auditor's report dated June 8, 1998.
As of July 31, 1998, 21,756,896 common shares of the Corporation are issued and outstanding and 4,223,250 common shares may be issued under outstanding warrants, options and rights of the Corporation. On the basis that the issued capital of the Corporation on a fully diluted basis will remain unchanged between the date hereof and the Closing Date, the Corporation will issue 48,248,843 common shares to Bell Canada under the Agreement in consideration for the Purchased Assets, which will represent immediately after such issuance 65% of the then outstanding common shares of the Corporation on a fully diluted basis.
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