SIERRA SYSTEMS GROUP INC.
1400 - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇
January 26, 2000
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ Inc.
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇.
▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, President and CEO
(the "Vendor")
Dear Sirs:
The purpose of this letter is to set out the agreement between Sierra Systems
Group Inc. (the "Purchaser") and the Vendor with respect to the purchase by the
Purchaser and sale by the Vendor of certain business contacts of the Vendor.
1. REPRESENTATIONS OF THE VENDOR. The Vendor represents and warrants to
the Purchaser that:
(a) part of the Vendor's business is the development of internal
and external web sites for clients, exclusive of integration into such
of internal enterprise systems ("Web Site Development Services");
(b) the clients of the Vendor listed on Schedule A (the "Clients")
have contracted with the Vendor for Web Site Development Services, all
of which are performed on a time and materials basis, except for two
which are on a retainer basis; and
(c) all of the contracts between the Vendor and the Clients are in
good standing.
2. AGREEMENT OF PURCHASE AND SALE. Relying upon the Vendor's
representations and warranties provided in Section 1 and subject to the terms
and conditions hereof, the Purchaser offers to pay the Vendor a referral fee
(the "Fee") for each Client that agrees to terminate its relationship with the
Vendor with respect to Web Site Development Services and to engage the Purchaser
on terms satisfactory to it to provide Web Site Development Services.
3. FEES. The Fee to be paid by the Purchaser to the Vendor with respect to
each Client who agrees to have its Web Site Development Services performed by
the Purchaser will be as follows:
(a) 15% of the gross revenue billed and collected by the Purchaser
in respect of Web Site Development Services provided to the Client for
the period of three months extending from the earlier of the
commencement of the Purchaser providing Web Site Development Services
to the Client and March 1, 2000 and 10% of gross revenue billed and
collected for Web Site Development Services provided during the next
four-month period;
(b) the Fee will be calculated and paid monthly, within 30 days of
the end of each month based upon gross revenue collected during the
month;
(c) each payment of the Fee will be accompanied by an unaudited
statement indicating the calculation of the Fee in reasonable detail (a
"Monthly Statement");
(d) the Vendor will have 15 days from the time of receipt of a
Monthly Statement to question the accuracy thereof in writing and
failing such objection the Monthly Statement will be deemed to be
correct and unimpeachable thereafter;
(e) if the Monthly Statement is questioned by the Vendor, and if
such questions cannot be resolved between the Vendor and the Purchaser,
the Vendor will have the Monthly Statement reviewed by its auditors,
PricewaterhouseCoopers, who will be requested to provide their opinion
on the calculation of the Fee for the month in question, such opinion
to be final and determinative of the Fee payable during the month; and
(f) the Fee payable by the Purchaser will be calculated based upon
the actual gross revenue collected from a Client and the percentage
payable will be based upon the period during which the ▇▇▇▇
representing such gross revenue was rendered, notwithstanding the time
when a ▇▇▇▇ rendered to a Client is actually paid.
4. AGREEMENT BY VENDOR TO SOLICIT CLIENTS. Forthwith upon the execution of
this Agreement, the Vendor will contact the Clients for the purpose of
soliciting their consent to the termination of their agreement with the Vendor
to provide Web Site Development Services and to have such services provided by
the Purchaser on terms which are satisfactory to the Client and the Purchaser.
5. AGREEMENTS OF PURCHASER. The Purchaser hereby agrees to use its
reasonable efforts to:
(a) reach agreements with the Clients on terms satisfactory to the
Purchaser pursuant to which the Purchaser will provide Web Site
Development Services to the Clients;
(b) to carry out Web Site Development Services for the Clients
upon such agreed upon terms; and
(c) to invoice the Clients on a timely basis for Web Site
Development Services and to collect such.
6. MUTUAL AGREEMENT. The Vendor and the Purchaser agree to work together
from the date hereof for the purpose of transitioning Clients from the Vendor to
the Purchaser.
-2-
7. INDEMNIFICATION OF PURCHASER. The Vendor agrees to indemnify and save
the Purchaser harmless with respect to all claims and causes of action and costs
(including lawyers' fees) which may arise due to Web Site Development Services
provided to the Clients prior to the Client agreeing to have such services
provided by the Purchaser.
8. NONSOLICITATION OF EMPLOYEES. For the period extending from the date of
acceptance hereof by the Vendor to September 30, 2000, both parties undertake
not to solicit for or initiate discussions to, hire or contract any of the
employees or individual partners of the other party nor to, directly or
indirectly, entice any of such employees or individual partners to terminate his
or her employment with the other party. Breach of this clause will entitle the
aggrieved party, as its only recourse, to claim from the breaching party, and
the breaching party will pay to the aggrieved party upon demand, as liquidated
damages and not as a penalty, an amount equal to the compensation paid to the
hired employee or individual partner during the six months prior to being hired
by the breaching party. The provisions of this Section 8 will not prevent a
party from discussing employment or from hiring such an employee or individual
partner where the party is first approached by the employee or individual
partner in circumstances where the party is not in breach of the provisions
hereof.
9. NOTICE. Any notice or other communication required or permitted to be
given hereunder or for the purposes hereof will be sufficiently given if
delivered to the party to whom it is given or sent by means of electronic
transmission addressed to such party:
(a) in the case of a notice or other communication to Purchaser,
to it at:
1400 - ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
(b) in the case of a notice or other communication to Vendor, to
it at:
▇▇▇ - ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇, President and CEO
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
or at such other address or number as the party to whom such notice or other
communication is to be given has last notified the party giving the same in the
manner provided in this Section 9. Any notice or other communication which is
delivered or sent by means of electronic transmission will be deemed to have
been given and received on the day after it is delivered or transmitted,
provided that if such day is not a Business Day, the notice or other
communication will be deemed to have been given and received on the next
Business Day following such day.
10. ENUREMENT. All the terms and provisions of this Agreement will be
binding upon and enure to the benefit of the parties hereto and their respective
successors and assigns.
-3-
11. ENTIRE AGREEMENT. This Agreement and the Schedules attached hereto set
forth the entire agreement and understanding of the parties in respect of the
transactions contemplated hereby and supersede all previous agreements and
understandings, oral or written, among the parties or their respective
representatives with respect to the matters herein and will not be modified or
amended except by written agreement signed by the parties to be bound thereby.
12. ACCEPTANCE OF TERMS. If you agree with the terms of this letter kindly
sign this letter where shown and return it to us. You may return the signed
letter to us by facsimile transmission, which will be treated for all purposes
as an original document. Upon such occurring, this letter will constitute a
binding agreement between us in respect of the matters described herein.
Yours truly,
SIERRA SYSTEMS GROUP INC.
By:
-------------------------------
By:
-------------------------------
Agreed to and accepted this day of January, 2000.
▇▇▇▇▇▇▇▇▇▇▇.▇▇▇ INC.
By:
-------------------------------
By:
-------------------------------
-4-
SCHEDULE A
LIST OF CLIENTS
1. ACCPAC International
2. Amiga Telephony Corporation
3. BC Assessment Authority
4. BC Hydro Corporation
5. BC Library Association
6. Canaccord Capital Corporation
7. Certified Management Accountants of BC
8. Future Shop Ltd.
9. HSBC Bank USA
10. HSBC Securities (Canada) Ltd.
11. HSBC Bank Canada
12. HSBC InvestDirect (Canada) Inc.
13. HSBC Brokerage (USA) Inc.
14. Lifescan Canada
15. Natural Factors
16. ▇▇▇▇▇▇▇▇▇.▇▇▇, Inc.
17. Tripeze Travel Inc.
18. Vancouver Hospital
19. Vancouver Hospital Foundation
20. Westminster Savings Credit Union
-5-