EXHIBIT 2.1
EXCHANGE AGREEMENT
BY AND AMONG
LOCH EXPLORATION, INC.,
LOCH ENERGY, INC.,
DESIGN AUTOMATION SYSTEMS INCORPORATED
AND
THE SOLE SHAREHOLDER
OF DESIGN AUTOMATION SYSTEMS INCORPORATED
Dated December 31, 1998
TABLE OF CONTENTS
Articles Page
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ARTICLE I REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF LOCX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.01 Organization. . . . . . . . . . . . . . . . . . . . . . . . . .1
1.02 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . .1
1.03 Subsidiaries and Predecessor Corporations . . . . . . . . . . .2
1.04 Financial Statements. . . . . . . . . . . . . . . . . . . . . .2
1.05 Information . . . . . . . . . . . . . . . . . . . . . . . . . .2
1.06 Options or Warrants . . . . . . . . . . . . . . . . . . . . . .2
1.07 Absence of Certain Changes or Events. . . . . . . . . . . . . 2
1.08 Litigation and Proceedings. . . . . . . . . . . . . . . . . . .3
1.09 Assignment of Assets and Liabilities . . . . . . . . . . . . . .3
1.10 No Assets or Liabilities . . . . . . . . . . . . . . . . . . . .3
ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES
OF THE DESIGN AUTOMATION SYSTEMS INCORPORATED
SOLE SHAREHOLDER. . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.01 Ownership of Design Automation Systems Incorporated
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE III REPRESENTATIONS, COVENANTS, AND
WARRANTIES OF DESIGN AUTOMATION SYSTEMS INCORPORATED
AND DESIGN AUTOMATION SYSTEMS INCORPORATED SOLE
SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
3.01 Organization. . . . . . . . . . . . . . . . . . . . . . . . . .4
3.02 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . .4
3.03 Subsidiaries and Predecessor Corporations . . . . . . . . . . .4
3.04 Financial Statements. . . . . . . . . . . . . . . . . . . . . .4
3.05 Information . . . . . . . . . . . . . . . . . . . . . . . . . .5
3.06 Options or Warrants . . . . . . . . . . . . . . . . . . . . . .5
3.07 Absence of Certain Changes or Events. . . . . . . . . . . . . .5
3.08 Title and Related Matters . . . . . . . . . . . . . . . . . . .6
3.09 Litigation and Proceedings. . . . . . . . . . . . . . . . . . .6
3.10 Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.11 Material Contract Defaults. . . . . . . . . . . . . . . . . . .7
3.12 No Conflict With Other Instruments. . . . . . . . . . . . . . .7
3.13 Governmental Authorizations . . . . . . . . . . . . . . . . . .7
3.14 Compliance With Laws and Regulations. . . . . . . . . . . . . .8
3.15 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . .8
3.16 Approval of Agreement . . . . . . . . . . . . . . . . . . . . .8
3.17 Material Transactions or Affiliations . . . . . . . . . . . . .8
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3.18 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . .8
3.19 Design Automation Systems Incorporated Schedules. . . . . . . .8
3.20 Assistance in Registration . . . . . . . . . . . . . . . . . . .9
3.21 Year 2000. . . . . . . . . . . . . . . . . . . . . . . . . . . .9
ARTICLE IV PLAN OF EXCHANGE. . . . . . . . . . . . . . . . . . . . . . . . . . .9
4.01 The Exchange. . . . . . . . . . . . . . . . . . . . . . . . . .9
4.02 Appointment of New Directors. . . . . . . . . . . . . . . . . .9
4.03 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
4.04 Closing Events. . . . . . . . . . . . . . . . . . . . . . . . 9
ARTICLE V SPECIAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.01 Stockholder Meeting of LOCX . . . . . . . . . . . . . . . . . 10
5.02 Access to Properties and Records. . . . . . . . . . . . . . . 10
5.03 Delivery of Books and Records . . . . . . . . . . . . . . . . 10
5.04 Special Covenants and Representations
Regarding the Exchanged Stock . . . . . . . . . . . . . . . . 10
5.05 Third Party Consents and Certificates . . . . . . . . . . . . 10
5.06 Actions Prior to Closing. . . . . . . . . . . . . . . . . . . 10
5.07 Indemnification . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE VI CONDITIONS PRECEDENT TO OBLIGATIONS
OF LOCX . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
6.01 Accuracy of Representations . . . . . . . . . . . . . . . . . 12
6.02 Officer's Certificates. . . . . . . . . . . . . . . . . . . . 12
6.03 No Material Adverse Change. . . . . . . . . . . . . . . . . . 12
6.04 Good Standing . . . . . . . . . . . . . . . . . . . . . . . . 12
6.05 Other Items . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE VII CONDITIONS PRECEDENT TO OBLIGATIONS OF DESIGN
AUTOMATION SYSTEMS INCORPORATED AND THE DESIGN
AUTOMATION SYSTEMS INCORPORATED SOLE
SHAREHOLDER . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.01 Accuracy of Representations . . . . . . . . . . . . . . . . . 13
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7.02 Officer's Certificate . . . . . . . . . . . . . . . . . . . . 13
7.03 No Material Adverse Change. . . . . . . . . . . . . . . . . . 13
7.04 Good Standing . . . . . . . . . . . . . . . . . . . . . . . . 13
7.05 Other Items . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE VIII TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.01 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . 13
8.02 Effect of Termination. . . . . . . . . . . . . . . . . . . . . 14
ARTICLE IX MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.01 Brokers . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.02 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . 14
9.03 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
9.04 Attorneys' Fees . . . . . . . . . . . . . . . . . . . . . . . 15
9.05 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . 15
9.06 Schedules; Knowledge. . . . . . . . . . . . . . . . . . . . . 15
9.07 Third Party Beneficiaries . . . . . . . . . . . . . . . . . . 15
9.08 Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . 15
9.09 Survival. . . . . . . . . . . . . . . . . . . . . . . . . . . 15
9.10 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . 15
9.11 Amendment or Waiver . . . . . . . . . . . . . . . . . . . . . 15
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EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (hereinafter referred to as this "Agreement"), is
entered into as of this 31st day of December 1998, by and among Loch
Exploration, Inc., a Texas corporation ("LOCX"), its wholly-owned subsidiary
Loch Energy, Inc. ("LEI"), Design Automation Systems Incorporated, a Texas
corporation ("DASI") and Xxxx X. Xxxx who is the beneficial owner of 1,000
shares of common stock of DASI ("Common Stock"), which constitutes 100% of the
outstanding capital stock of DASI ("DASI Sole Shareholder").
PREMISES
This Agreement provides for the acquisition by LOCX of all of the issued
and outstanding shares of DASI solely in exchange for voting shares of LOCX, on
the terms and conditions hereinafter provided, all for the purpose of effecting
a so-called "tax-free" reorganization pursuant to Sections 368(a)(1)(B) of the
Internal Revenue Code of 1954, as amended.
AGREEMENT
NOW THEREFORE, on the stated premises and for and in consideration of the
mutual covenants and agreements hereinafter set forth and the mutual benefits to
the parties to be derived herefrom, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF LOCX
As an inducement to, and to obtain the reliance of the DASI Sole
Shareholder, LOCX represents and warrants as follows:
Section 1.01 ORGANIZATION. LOCX is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas. LOCX has
the corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in Schedule 1.01 are complete and correct
copies of the articles of incorporation, as amended, and bylaws of LOCX as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of these
articles of incorporation or bylaws. LOCX has taken, or will take prior to
Closing, (as defined in Article IX) all action required by laws, its articles of
incorporation, its bylaws, or otherwise to authorize the execution and delivery
of this Agreement. LOCX has full power, authority, and legal right and has
taken all action required by law, its certificate of incorporation, bylaws, and
otherwise to consummate the transactions herein contemplated.
Section 1.02 CAPITALIZATION. The authorized capitalization of LOCX
consists of 50,000,000 shares of common stock, $.001 par value per share, of
which 1,295,286 shares are currently issued and outstanding. An additional
2,304,714 shares of LOCX common stock will be issued to certain parties at
Closing as more particularly described on Schedule 1.02(a). A shareholder list
is set forth in Schedule 1.02(b). All issued and outstanding shares are legally
issued, fully paid, and non-assessable and not issued in violation of the
pre-emptive or other rights of any person. There are no options, warrants,
rights or convertible securities outstanding to purchase any capital stock of
LOCX.
Section 1.03 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Except as set
forth on Schedule 1.03, LOCX does not have any subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.
Section 1.04 FINANCIAL STATEMENTS. LOCX (i) has delivered to DASI true
and correct copies of Form 10-K for the fiscal year ended December 31, 1997
("Form 10-K") and (ii) has delivered its Form 10-Q for the nine months ended
September 30, 1998 ("Form 10-Q"). As of their respective dates, the Form 10-K
and Form 10-Q did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading. The Form 10-K and Form 10-Q present fairly the financial
condition, assets, liabilities, and stockholders' equity of LOCX as of its date;
each such statement of income and statement of retained earnings presents fairly
the results of operations of LOCX for the period indicated and each such
statement of changes in financial position presents fairly the information
purported to be shown therein. The financial statements referred to in this
Section 1.04 have been prepared in accordance with GAAP consistently applied
throughout the periods involved, are correct and complete in all material
respects and are in accordance with the books and records of LOCX.
Section 1.05 INFORMATION. The information concerning LOCX set forth in
this Agreement and in Schedules attached hereto is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 1.06 OPTIONS OR WARRANTS. There are no existing options,
warrants, calls, or commitments of any character relating to the authorized and
unissued LOCX common stock.
Section 1.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
Section 1.09 of this Agreement or Schedule 1.07, since September 30, 1998:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of LOCX; or (ii) any
damage, destruction, or loss to LOCX (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties,
assets, or condition of LOCX;
(b) LOCX has not (i) amended its certificate of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of LOCX;
(iv) made any material change in its method of management, operation, or
accounting; (v) entered into any other material transaction; (vi) made any
accrual or arrangement for payment of bonuses or special compensation of
any kind or any severance or termination pay to any present or former
officer or employee; (vii) increased the rate of compensation payable or to
become payable by it to any of its officers or directors or any of its
employees whose monthly compensation exceeds $2,000; or (viii) made any
increase in any profit
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sharing, bonus, deferred compensation, insurance, pension, retirement, or
other employee benefit plan, payment, or arrangement made to, for, or with
its officers, directors, or employees; and
(c) LOCX has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent); (ii) paid any material obligation or liability
(absolute or contingent) other than current liabilities reflected in or
shown on the most recent LOCX balance sheet; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights
(except assets, properties, or rights not used or useful in its business
which, in the aggregate have a value of less than $2,000), or canceled, or
agreed to cancel, any debts or claims (except debts or claims which in the
aggregate are of a value of less than $1,000); (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which it
is a party if such amendment or termination is material, considering the
business of LOCX; or (v) issued, delivered, or agreed to issue or deliver
any stock, bonds or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock).
Section 1.08 LITIGATION AND PROCEEDINGS. Except as expressly disclosed in
the Form 10-K or Form 10-Q, there is no proceeding by or before (or, to the best
knowledge of LOCX, any investigation by) any governmental or other
instrumentality or agency, pending, or, to the knowledge of LOCX, threatened
against or affecting LOCX or any of its properties or rights, except for such
actions, suits, proceedings, arbitrations or investigations that do not have
and are not reasonably likely to have, individually or in the aggregate, a
material adverse effect on the condition of LOCX. There are no proceedings
pending or, to the best knowledge of LOCX, threatened, seeking to prevent or
challenging the transactions contemplated by this agreement. LOCX is not
subject to any judgment, order or decree entered in any proceeding, that has had
or could have a material adverse effect on the condition of LOCX.
Section 1.09 ASSIGNMENT OF ASSETS AND LIABILITIES. At or prior to the
closing date (as defined in Section 4.03) LOCX shall sell, assign, transfer and
convey to LEI all right, title and interest in and to all of its assets and
liabilities in exchange for all of the issued and outstanding capital stock of
LEI, which consists of 1,295,286 shares of common stock, pursuant to an
Assignment the form of which is attached as Schedule 1.09(a). The shares of LEI
held by LOCX shall be distributed to the LOCX shareholders pursuant to the
Distribution Agreement attached hereto as Schedule 1.09(b). The record date for
said distribution shall be prior to the closing date hereof.
Section 1.10 NO ASSETS OR LIABILITIES. LOCX represents and warrants that
it will have no assets or liabilities at Closing, other than 1,295,286 shares of
common stock of its wholly-owned subsidiary, LEI.
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF THE DASI SOLE SHAREHOLDER
As an inducement to, and to obtain reliance of LOCX, the DASI Sole
Shareholder represents and warrants as follows:
Section 2.01 OWNERSHIP OF DASI SHARES. The DASI Sole Shareholder hereby
represents and warrants that he is the legal and beneficial owner of the number
of DASI shares set forth opposite his name
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on Schedule 2.01 hereof, free and clear of any claims, charges, equities, liens,
security interests, and encumbrances whatsoever, and he has full right, power,
and authority to transfer, assign, convey, and deliver its DASI shares; and
delivery of such shares at the closing will convey to LOCX good and marketable
title to such shares free and clear of any claims, charges, equities, liens,
security interests, and encumbrances whatsoever.
ARTICLE III
REPRESENTATIONS, COVENANTS, AND WARRANTIES
OF DASI AND DASI SOLE SHAREHOLDER
As an inducement to, and to obtain the reliance of LOCX, DASI and the DASI
Sole Shareholder represent and warrant as follows:
Section 3.01 ORGANIZATION. DASI is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Texas. DASI has
the corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets and to carry on its business
in all material respects as it is now being conducted, including qualification
to do business as a foreign corporation in the states in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in Schedule 3.01 are complete and correct
copies of the articles of incorporation, as amended, and bylaws of DASI as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated by this Agreement in
accordance with the terms hereof will not, violate any provision of these
articles of incorporation or bylaws. DASI has taken all action required by
laws, its articles of incorporation, its bylaws, or otherwise to authorize the
execution and delivery of this Agreement. DASI has full power, authority, and
legal right and has taken all action required by law, its certificate of
incorporation, bylaws, and otherwise to consummate the transactions herein
contemplated.
Section 3.02 CAPITALIZATION. The authorized capitalization of DASI
consists of 50,000,000 shares of common stock, no par value per share, of which
1,000 shares are currently issued and outstanding. Prior to closing additional
shares of DASI common stock will be issued to certain parties as more
particularly described on Schedule 3.02. All issued and outstanding shares are
legally issued, fully paid, and non-assessable and not issued in violation of
the pre-emptive or other rights of any person. There are no options, warrants,
rights or convertible securities outstanding to purchase any capital stock of
DASI.
Section 3.03 SUBSIDIARIES AND PREDECESSOR CORPORATIONS. Except as set
forth on Schedule 3.03, DASI does not have any subsidiaries and does not own,
beneficially or of record, any shares of any other corporation.
Section 3.04 FINANCIAL STATEMENTS.
(a) Included in Schedule 3.04 (a) is an unaudited balance sheet,
statement of operations and cash flow of DASI for nine months ended
September 30, 1998 and an unaudited balance sheet, statement of operations
and cash flow for the year ended December 31, 1997.
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(b) All such financial statements have been prepared in accordance
with generally accepted accounting principles. The unaudited balance sheet
presents fairly as of its date the financial condition of DASI. DASI did
not have, as of the date of such balance sheet, except as and to the extent
reflected or reserved against therein, any liabilities or obligations
(absolute or contingent) which should be reflected in a balance sheet or
the notes thereto, prepared in accordance with generally accepted
accounting principles, and all assets reflected therein are properly
reported and present fairly the value of the assets of DASI in accordance
with generally accepted accounting principles. The statements of income,
stockholders' equity, and changes in financial condition reflect fairly the
information required to be set forth therein by generally accepted
accounting principles.
(c) DASI has filed all state, federal, and local income tax returns
required to be filed by it from inception to the date hereof. Included in
Schedule 3.04(b) are true and correct copies of the federal income tax
returns of DASI filed since 1996. None of such federal income tax returns
have been examined by the Internal Revenue Service. Each of such income
tax returns reflects the taxes due for the period covered thereby, except
for amounts which, in the aggregate, are immaterial.
(d) DASI does not owe any unpaid federal, state, county, local, or
other taxes (including any deficiencies, interest, or penalties) through
the date hereof, for which DASI may be liable in its own right or as a
transferee of the assets of, or as a successor to, any other corporation or
entity. Furthermore, except as accruing in the normal course of business,
DASI does not owe any accrued and unpaid taxes to date of this Agreement.
(e) The books and records, financial and otherwise, of DASI are in
all material respects complete and correct and have been maintained in
accordance with good business and accounting practices.
(f) DASI has good and marketable title to its assets and, except as
set forth in Schedule 3.04(f) or the financial statements of DASI or the
notes thereto, has no material contingent liabilities, direct or indirect,
matured or unmatured.
Section 3.05 INFORMATION. The information concerning DASI set forth in
this Agreement and in Schedules attached hereto is complete and accurate in all
material respects and does not contain any untrue statement of a material fact
or omit to state a material fact required to make the statements made, in light
of the circumstances under which they were made, not misleading.
Section 3.06 OPTIONS OR WARRANTS. Except as set forth in this Agreement
or in Schedule 3.06, there are no existing options, warrants, calls, or
commitments of any character relating to the authorized and unissued DASI common
stock.
Section 3.07 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in
this Agreement or Schedule 3.07, since September 30, 1998:
(a) there has not been (i) any material adverse change in the
business, operations, properties, assets, or condition of DASI; or (ii) any
damage, destruction, or loss to DASI (whether or not covered by insurance)
materially and adversely affecting the business, operations, properties,
assets, or condition of DASI;
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(b) DASI has not (i) amended its certificate of incorporation or
bylaws; (ii) declared or made, or agreed to declare or make, any payment of
dividends or distributions of any assets of any kind whatsoever to
stockholders or purchased or redeemed, or agreed to purchase or redeem, any
of its capital stock; (iii) waived any rights of value which in the
aggregate are extraordinary or material considering the business of DASI;
(iv) made any material change in its method of management, operation, or
accounting; (v) entered into any other material transaction; (vi) made any
accrual or arrangement for payment of bonuses or special compensation of
any kind or any severance or termination pay to any present or former
officer or employee; (vii) increased the rate of compensation payable or to
become payable by it to any of its officers or directors or any of its
employees whose monthly compensation exceeds $2,000; or (viii) made any
increase in any profit sharing, bonus, deferred compensation, insurance,
pension, retirement, or other employee benefit plan, payment, or
arrangement made to, for, or with its officers, directors, or employees;
(c) DASI has not (i) borrowed or agreed to borrow any funds or
incurred, or become subject to, any material obligation or liability
(absolute or contingent) except liabilities incurred in the ordinary course
of business; (ii) paid any material obligation or liability (absolute or
contingent) other than current liabilities reflected in or shown on the
most recent DASI balance sheet, and current liabilities incurred since that
date in the ordinary course of business; (iii) sold or transferred, or
agreed to sell or transfer, any of its assets, properties, or rights
(except assets, properties, or rights not used or useful in its business
which, in the aggregate have a value of less than $2,000), or canceled, or
agreed to cancel, any debts or claims (except debts or claims which in the
aggregate are of a value of less than $2,000); (iv) made or permitted any
amendment or termination of any contract, agreement, or license to which it
is a party if such amendment or termination is material, considering the
business of DASI; or (v) issued, delivered, or agreed to issue or deliver
any stock, bonds or other corporate securities including debentures
(whether authorized and unissued or held as treasury stock); and
(d) to the best knowledge of the DASI Sole Shareholder, DASI has not
become subject to any law or regulation which materially and adversely
affects, or in the future may adversely affect, the business, operations,
properties, assets, or condition of DASI.
Section 3.08 TITLE AND RELATED MATTERS. DASI has good and marketable title
to all of its properties, inventory, interests in properties, and assets, real
and personal, which are reflected in the most recent balance sheet or acquired
after that date (except properties, interests in properties, and assets sold or
otherwise disposed of since such date in the ordinary course of business), free
and clear of all liens, pledges, charges, or encumbrances except (a) statutory
liens or claims not yet delinquent; (b) such imperfections of title and
easements as do not and will not materially detract from or interfere with the
present or proposed use of the properties subject thereto or affected thereby or
otherwise materially impair present business operations on such properties; and
(c) as described in Schedule 3.08. Except as set forth in Schedule 3.08, DASI
owns, free and clear of any liens, claims, encumbrances, royalty interests, or
other restrictions or limitations of any nature whatsoever, any and all products
it is currently manufacturing, including the underlying technology and data, and
all procedures, techniques, marketing plans, business plans, methods of
management, or other information utilized in connection with DASI's business.
Except as set forth in Schedule 3.08, no third party has any right to, and DASI
has not received any notice of infringement of or conflict with asserted rights
of others with respect to any product, technology, data, trade secrets,
know-how, proprietary techniques, trademarks, service marks, tradenames, or
copyrights which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling, or finding, would have a materially adverse affect on the
business, operations,
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financial condition, income, or business prospects of DASI or any material
portion of its properties, assets, or rights.
Section 3.09 LITIGATION AND PROCEEDINGS. Except as set forth in Schedule
3.09, there are no actions, suits, proceedings, or investigations pending or, to
the knowledge of DASI or the DASI Sole Shareholder after reasonable
investigation, threatened by or against DASI or affecting DASI or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign, or before any arbitrator of any kind.
DASI or the DASI Sole Shareholder does not have any knowledge of any default on
its part with respect to any judgment, order, writ, injunction, decree, award,
rule, or regulation of any court, arbitrator, or governmental agency or
instrumentality or of any circumstances which, after reasonable investigation,
would result in the discovery of such a default.
Section 3.10 CONTRACTS.
(a) Except as included or described in Schedule 3.10, there are no
material contracts, agreements, franchises, license agreements, or other
commitments to which DASI is a party or by which it or any of its assets,
products, technology, or properties are bound;
(b) All contracts, agreements, franchises, license agreements, and
other commitments to which DASI is a party or by which its properties are
bound and which are material to the operations of DASI taken as a whole are
valid and enforceable by DASI in all respects, except as limited by
bankruptcy and insolvency laws and by other laws affecting the rights of
creditors generally;
(c) DASI is not a party to or bound by, and the properties of DASI
are not subject to, any contract, agreement, other commitment or
instrument; any charter or other corporate restriction; or any judgment,
order, writ, injunction, decree, or award which materially and adversely
affects, or in the future may (as far as DASI can now foresee) materially
and adversely affect, the business, operations, properties, assets, or
condition of DASI; and
(d) Except as included or described in Schedule 3.10 or reflected in
the most recent DASI balance sheet, DASI is not a party to any oral or
written (i) contract for the employment of any officer or employee which is
not terminable on 30 days or less notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay, pension benefit or
retirement plan, agreement, or arrangement covered by Title IV of the
Employee Retirement Income Security Act, as amended; (iii) agreement,
contract, or indenture relating to the borrowing of money; (iv) guaranty of
any obligation, other than one on which DASI is a primary obligor, for the
borrowing of money or otherwise, excluding endorsements made for collection
and other guaranties of obligations, which, in the aggregate do not exceed
more than one year or providing for payments in excess of $10,000 in the
aggregate; (vi) collective bargaining agreement; (vii) agreement with any
present or former officer or director of DASI or (viii) contract,
agreement, or other commitment involving payments by it of more than
$10,000 in the aggregate.
Section 3.11 MATERIAL CONTRACT DEFAULTS. Except as set forth in Schedule
3.11, DASI is not in default in any material respect under the terms of any
outstanding contract, agreement, lease, or other commitment which is material to
the business, operations, properties, assets, or condition of DASI and there is
no event of default in any material respect under any such contract, agreement,
lease, or other commitment
7
in respect of which DASI or the DASI Sole Shareholder has not taken adequate
steps to prevent such a default from occurring.
Section 3.12 NO CONFLICT WITH OTHER INSTRUMENTS. Except as set forth in
Schedule 3.12, the execution of this Agreement and the consummation of the
transactions contemplated by this Agreement will not result in the breach of any
term or provision of, or constitute an event of default under, any material
indenture, mortgage, deed of trust, or other material contract, agreement, or
instrument to which DASI is a party or to which any of its properties or
operations are subject.
Section 3.13 GOVERNMENTAL AUTHORIZATIONS. Set forth in Schedule 3.13 is a
description of all licenses, franchises, permits, and other governmental
authorizations that are legally required to enable it to conduct its business in
all material respects as conducted on the date hereof. Except for compliance
with federal and state securities and corporation laws, as hereinafter provided,
no authorization, approval, consent, or order of, or registration, declaration,
or filing with, any court or other governmental body is required in connection
with the execution and delivery by DASI of this Agreement and the consummation
by DASI of the transactions contemplated hereby.
Section 3.14 COMPLIANCE WITH LAWS AND REGULATIONS. Except as set forth in
Schedule 3.14, DASI has complied with all applicable statutes and regulations of
any federal, state, or other governmental entity or agency thereof, except to
the extent that noncompliance would not materially and adversely affect the
business, operations, properties, assets, or condition of DASI or except to the
extent that noncompliance would not result in the incurrence of any material
liability for DASI.
Section 3.15 INSURANCE. All the insurable properties of DASI are
insured in their full replacement value against all risks customarily insured
against by persons operating similar properties in localities where such
properties are located and under valid and enforceable policies by insurers of
recognized responsibility. Such policy or policies containing substantially
equivalent coverage will be outstanding on the date of consummation of the
transactions contemplated by this Agreement. Set forth on Schedule 3.15 is a
list of all policies or binders of fire, liability, product liability, worker's
compensation, vehicular or other insurance held by or no behalf of DASI
(specifying for each such policy the insurer, the policy number or covering note
number with respect to binders, and each pending claim thereunder, if any, and
setting forth the aggregate amount paid out under each policy through the date
hereof.
Section 3.16 APPROVAL OF AGREEMENT. The board of directors and sole
shareholder of DASI have authorized the execution and delivery of this Agreement
and have approved the transactions contemplated hereby. A copy of the board of
directors and shareholders minutes are attached as Schedule 3.16.
Section 3.17 MATERIAL TRANSACTIONS OR AFFILIATIONS. Set forth in Schedule
3.17 is a description of every material contract, agreement, or arrangement
between DASI and any predecessor and any person who was at the time of such
contract, agreement, or arrangement an officer, director, or person owning of
record, or known by DASI or DASI Sole Shareholder to own beneficially, 5% or
more of the issued and outstanding common stock of DASI and which is to be
performed in whole or in part after the date hereof or which was entered into
not more than three years prior to the date hereof. In all of such
transactions, the amount paid or received, whether in cash, in services, or in
kind, is, had been during the full term thereof, and is required to be during
the unexpired portion of the term thereof, no less favorable to DASI than terms
available from otherwise unrelated parties in arm's length transactions. Except
as disclosed in Schedule 3.17 or otherwise disclosed herein, no officer,
director, or 5% shareholder of DASI has, or has had since inception of DASI,
8
any interest, direct or indirect, in any material transaction with DASI. There
are no commitments by DASI, whether written or oral, to lend any funds to,
borrow any money from, or enter into any other material transaction with, any
such affiliated person.
Section 3.18 LABOR RELATIONS. DASI has not had a work stoppage resulting
from labor problems. To the knowledge of DASI and the DASI Sole Shareholder, no
union or other collective bargaining organization is organizing or attempting to
organize any employee of DASI.
Section 3.19 DASI SCHEDULES. DASI has delivered to LOCX as part of this
Agreement the following additional schedules, all certified by the chief
executive officer of DASI as complete, true, and correct:
(a) Schedule 3.19(a) containing a description of all real property
owned by DASI, together with a description of every mortgage, deed of
trust, pledge, lien, agreement, encumbrance, claim, or equity interest of
any nature whatsoever in such real property;
(b) Schedule 3.19(b) listing the accounts receivable and notes and
other obligations receivable of DASI as of September 30, 1998, or that
arose thereafter other than in the ordinary course of business of DASI,
indicating the debtor and amount, and classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set offs, reimbursements, discounts, or
other adjustments which are in the aggregate material and due to or claimed
by such creditor; and
(c) Schedule 3.19(c) listing the accounts payable and notes and other
obligations payable of DASI as of September 30, 1998, or that arose
thereafter other than in the ordinary course of the business of DASI,
indicating the creditor and amount, classifying the accounts to show in
reasonable detail the length of time, if any, overdue, and stating the
nature and amount of any refunds, set-offs, reimbursements, discounts, or
other adjustments, which in the aggregate are material and due or payable
to DASI respecting such obligations.
Section 3.20 ASSISTANCE IN REGISTRATION. DASI and the Sole Shareholder of
DASI represent and warrant that they will execute all additional instruments and
do all things necessary in order to assist LOCX in the registration under the
Securities Act of 1933, as amended, of the shares distributed to the LOCX
shareholders pursuant to Section 1.09 hereof.
Section 3.21 YEAR 2000. Year 2000 defects resulted from computer programs
being written using two digits rather than four to define the applicable year.
DASI and the Sole Shareholder of DASI represent and warrant that DASI's
operation systems are free from Year 2000 defects, or that if such defects exist
the cost of repair would not have a material adverse effect on the financial
condition of DASI.
ARTICLE IV
PLAN OF EXCHANGE
Section 4.01 THE EXCHANGE. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 4.05),
the DASI Sole Shareholder hereby agrees to assign, transfer, and deliver to
LOCX, free and clear of all liens, pledges, encumbrances, charges, restrictions,
or known claims of any kind, nature, or description, the number of shares of
common stock of
9
DASI set after his signature at the foot of this Agreement, in the aggregate
constituting all of the issued and outstanding shares of common stock of DASI,
or 1,000 shares, and LOCX agrees to acquire such shares on such date by issuing
and delivering in exchange solely therefor 14.4 million shares of LOCX
restricted common stock, par value $0.01. Upon the consummation of the
transaction contemplated herein, all shares of capital stock of DASI shall be
held by LOCX.
Section 4.02 APPOINTMENT OF NEW DIRECTORS. In connection with the Closing
of the transactions contemplated by this Agreement, the existing directors of
LOCX shall resign, seriatim, and shall appoint Xxxx X. Xxxx, Xxxxxxx Xxxxxx and
Xxxxxx Xxxxxx as directors to fill the vacancies created thereby, to serve until
the next annual stockholders' meeting of LOCX and their successors shall have
been elected and qualified.
Section 4.03 CLOSING. The closing ("Closing") of the transactions
contemplated by this Agreement shall be close of business December 31, 1998.
Section 4.04 CLOSING EVENTS. At the Closing, each of the respective
parties hereto shall execute, acknowledge, and deliver (or shall cause to be
executed, acknowledged, and delivered) any and all certificates, opinions,
financial statements, schedules, agreements, resolutions, rulings, or other
instruments required by this Agreement to be so delivered at or prior to the
Closing, together with such other items as may be reasonably requested by the
parties hereto and their respective legal counsel in order to effectuate or
evidence the transactions contemplated hereby.
ARTICLE V
SPECIAL COVENANTS
Section 5.01 STOCKHOLDER MEETING OF LOCX. As soon as practicable
following the execution of this Agreement, and prior to the Closing, LOCX shall
call a special meeting of its shareholders to approve the following proposals:
(a) the election of Xxxx X. Xxxx, Xxxxxxx Xxxxxx and Xxxxxx Xxxxxx as
directors of LOCX;
(b) the amendment to the articles of incorporation of LOCX to change
its name to "Design Automation Systems Incorporated," or such name as may
be deemed appropriate; and
(c) to take such other actions as the directors may determine are
appropriate.
Section 5.02 ACCESS TO PROPERTIES AND RECORDS. LOCX and DASI will each
afford to the officers and authorized representatives of the other full
access to the properties, books, and records of each other as the case may
be, in order that each may have full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and
each will furnish the other with such additional financial and operating data
and other information as to the business and properties of each other, as the
case may be, as the other shall from time to time reasonably request.
Section 5.03 DELIVERY OF BOOKS AND RECORDS. At the Closing, each company
shall deliver each other the originals of the corporate minute books, books of
account, contracts, records, and all other books or documents now in each
company's possession or its representatives.
10
Section 5.04 SPECIAL COVENANTS AND REPRESENTATIONS REGARDING THE EXCHANGED
STOCK. The consummation of this Agreement and the transactions herein
contemplated, including the issuance of the exchanged LOCX Stock to the
shareholders of DASI as contemplated hereby, constitutes the offer and sale of
securities under the Securities Act and applicable state statutes. Such
transaction shall be consummated in reliance on exemptions from the registration
and prospectus delivery requirements of such statutes which depend, inter alia,
upon the circumstances under which the DASI Sole Shareholder acquires such
securities. In connection with reliance upon exemptions from the registration
and prospectus delivery requirements for such transactions, at the Closing the
DASI Sole Shareholder shall deliver to LOCX letters of representation in the
form attached hereto as Schedule 5.04.
Section 5.05 THIRD PARTY CONSENTS AND CERTIFICATES. LOCX and DASI agree
to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein and therein contemplated.
Section 5.06 ACTIONS PRIOR TO CLOSING.
(a) From and after the date of this Agreement until the Closing Date
and except as set forth in the Agreement or Schedules attached hereto or as
permitted or contemplated by this Agreement, LOCX and DASI respectively,
will each:
(i) carry on its business in substantially the same manner as
it has heretofore;
(ii) maintain and keep its properties in states of good repair
and condition as at present, except for depreciation due to ordinary
wear and tear and damage due to casualty;
(iii) maintain in full force and effect insurance comparable in
amount and in scope of coverage to that now maintained by it;
(iv) perform in all material respects all of its obligation
under material contracts, leases, and instruments relating to or
affecting its assets, properties, and business;
(v) use its best efforts to maintain and preserve its business
organization intact, to retain its key employees, and to maintain its
relationship with its material suppliers and customers; and
(vi) fully comply with and perform in all material respects all
obligations and duties imposed on it by all federal and state laws and
all rules, regulations, and orders imposed by federal or state
governmental authorities.
(b) From and after the date of this Agreement until the Closing Date,
neither DASI nor LOCX will:
(i) make any change in their articles of incorporation (except
as provided for in Section 5.01) or bylaws;
(ii) take any action described in Section 1.07 in the case of
LOCX , or in Section 3.07, in the case of DASI (all except as
permitted therein or as disclosed in the applicable party's
schedules); or
11
(iii) enter into or amend any contract, agreement, or other
instrument of any of the types described in such party's schedules,
except that a party may enter into or amend any contract, agreement,
or other instrument in the ordinary course of business involving the
sale of goods or services.
Section 5.07 INDEMNIFICATION.
(a) DASI and the DASI Sole Shareholder hereby agree to indemnify LEI
and each of the officers, agents and directors of LEI as of the date of
execution of this Agreement against any loss, liability, claim, damage, or
expense (including, but not limited to, any and all expense whatsoever
reasonably incurred in investigating, preparing, or defending against any
litigation, commenced or threatened, or any claim whatsoever), to which it
or they may become subject arising out of or based on any inaccuracy
appearing in or misrepresentation made under Articles II and III of this
Agreement. The indemnification provided for in this paragraph shall
survive the Closing and consummation of the transactions contemplated
hereby and termination of this Agreement. Indemnification shall include
the right of the indemnified party to set-off with prior notice.
(b) LEI and its majority shareholders, Xxxxx X. Xxxx and Southport
Capital Corporation, hereby agree to indemnify DASI and each of the
officers, agents and directors of DASI as of the date of execution of this
Agreement against any loss, liability, claim, damage, or expense
(including, but not limited to, any and all expense whatsoever reasonably
incurred in investigating, preparing, or defending against any litigation,
commenced or threatened, or any claim whatsoever), to which it or they may
become subject arising out of or based on any inaccuracy appearing in or
misrepresentation made under Article I of this Agreement. The
indemnification provided for in this paragraph shall survive the Closing
and consummation of the transactions contemplated hereby and termination of
this Agreement. Indemnification shall include the right of the indemnified
party to set-off with prior notice.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF LOCX
The obligations of LOCX under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by DASI and the DASI Sole Shareholder in this Agreement were
true when made and shall be true at the Closing Date with the same force and
effect as if such representations and warranties were made at and as of the
Closing Date (except for changes therein permitted by this Agreement), and DASI
and the DASI Sole Shareholder shall have performed or complied with all
covenants and conditions required by this Agreement to be performed or complied
with by DASI and the DASI Sole Shareholder prior to or at the Closing. DASI
shall be furnished with a certificate, signed by a duly authorized officer of
DASI and dated the Closing Date, to the foregoing effect.
Section 6.02 OFFICER'S CERTIFICATES. LOCX shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized officer of
DASI to the effect that no litigation, proceeding, investigation, or inquiry is
pending or, to the best knowledge of DASI threatened, which might result in an
action to enjoin or prevent the consummation of the transactions contemplated by
this Agreement.
12
Section 6.03 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business, or operations of DASI nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of DASI.
Section 6.04 GOOD STANDING. LOCX shall have received a certificate of
good standing from the Secretary of State of the State of Texas or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying that DASI is in good standing as a corporation in the State of Texas
and has filed all tax returns required to have been filed by it to date and has
paid all taxes reported as due thereon.
Section 6.05 OTHER ITEMS.
(a) LOCX shall have received uniform commercial code certificates
from the appropriate state of local authority or agency for each county and
state in which any personal property of DASI with a value in excess $1,000
is situated, dated as of the Closing Date, to the effect that there are no
liens on such personal property, other than those disclosed in a Schedule
attached hereto.
(b) LOCX shall have received such further documents, certificates, or
instruments relating to the transactions contemplated hereby as LOCX may
reasonably request.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF DASI
AND THE DASI SOLE SHAREHOLDER
The obligations of DASI under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 7.01 ACCURACY OF REPRESENTATIONS. The representations and
warranties made by LOCX in this Agreement were true when made and shall be true
as of the Closing Date (except for changes therein permitted by this Agreement)
with the same force and effect as if such representations and warranties were
made at and as of the Closing Date, and LOCX shall have performed and complied
with all covenants and conditions required by this Agreement to be performed or
complied with by LOCX prior to or at the Closing. DASI shall have been
furnished with a certificate, signed by a duly authorized executive officer of
LOCX and dated the Closing Date, to the foregoing effect.
Section 7.02 OFFICER'S CERTIFICATE. DASI shall have been furnished with a
certificate dated the Closing Date and signed by a duly authorized executive
officer of LOCX to the effect that no litigation, proceeding, investigation, or
inquiry is pending or, to the best knowledge of LOCX threatened, which might
result in an action to enjoin or prevent the consummation of the transactions
contemplated by this Agreement.
Section 7.03 NO MATERIAL ADVERSE CHANGE. Prior to the Closing Date, there
shall not have occurred any material adverse change in the financial condition,
business, or operations of LOCX nor shall any event have occurred which, with
the lapse of time or the giving of notice, may cause or create any material
adverse change in the financial condition, business, or operations of LOCX.
13
Section 7.04 GOOD STANDING. DASI shall have received a certificate of
good standing from the Secretary of State of the State of Texas or other
appropriate office, dated as of a date within ten days prior to the Closing Date
certifying that LOCX is in good standing as a corporation in the State of Texas
and has filed all tax returns required to have been filed by it to date and has
paid all taxes reported as due thereon.
Section 7.05 OTHER ITEMS.
(a) DASI shall have received uniform commercial code certificates
from the appropriate state of local authority or agency for each county and
state in which any personal property of LOCX with a value in excess $1,000
is situated, dated as of the Closing Date, to the effect that there are no
liens on such personal property, other than those disclosed in a Schedule
attached hereto.
(b) DASI shall have received such further documents, certificates, or
instruments relating to the transactions contemplated hereby as DASI may
reasonably request.
ARTICLE VIII
TERMINATION
Section 8.01 TERMINATION. Certain of the parties may terminate this
Agreement as provided below:
(a) LOCX and DASI may terminate this Agreement by mutual written consent
at any time prior to Closing;
(b) LOCX may terminate this Agreement by giving written notice to DASI at
any time prior to Closing in the event DASI is in breach, and DASI may
terminate this Agreement by giving written notice to LOCX at any time prior
to Closing in the event LOCX is in breach, of any material representation,
warranty, or covenant contained in this Agreement in any material respect;
(c) DASI may terminate this Agreement by giving written notice to LOCX in
the event LOCX has not obtained shareholder approval of the transactions
contemplated hereby within ninety (90) days from the date hereof.
Section 8.02 EFFECT OF TERMINATION. If any party terminates this Agreement
in accordance with Section 8.01, all obligations of the parties hereunder shall
terminate without any liability of any party to the other party (except for any
liability of any party then in breach).
ARTICLE IX
MISCELLANEOUS
Section 9.01 BROKERS. LOCX and DASI agree that there were no finders or
brokers involved in bringing the parties together or who were instrumental in
the negotiation, execution, or consummation of this Agreement. DASI and LOCX
each agree to indemnify the other against any claim by any third person other
than those described above for any commission, brokerage, or finders' fee
arising from the transactions contemplated hereby based on any alleged agreement
or understanding between the indemnifying party and such third person, whether
express or implied from the actions of the indemnifying party.
14
Section 9.02 GOVERNING LAW. This Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to matters of state law, with the laws of
Texas.
Section 9.03 NOTICES. Any notices or other communications required or
permitted hereunder shall be sufficiently given if personally delivered to it or
sent by registered mail or certified mail, postage prepaid, or by prepaid
telegram addressed as follows:
If to DASI, to: Xxxx X. Xxxx
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
With copies to: Xxxxxx X. Xxxxxx
Xxxxxx & Xxxxx
0000 Xxxxx Xxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
If to LOCX to: Xxxxx X. Xxxx
Loch Exploration, Inc.
0000 XXX Xxxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
With copies to: Xxxxxx X. Xxxxxxxxx, Esq.
Xxxxxx & Xxxxxxxxx
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given as of the date so delivered, mailed, or
telegraphed.
Section 9.04 ATTORNEY'S FEES. In the event that any party institutes any
action or suit to enforce this Agreement or to secure relief from any default
hereunder or breach hereof, the breaching party or parties shall reimburse the
nonbreaching party or parties for all costs, including reasonable attorneys'
fees, incurred in connection therewith and in enforcing or collecting any
judgment rendered therein.
Section 9.05 CONFIDENTIALITY. Each party hereto agrees with the other
parties that, unless and until the transactions contemplated by this Agreement
have been consummated, it and its representatives will hold in strict confidence
all data and information obtained with respect to another party or any
subsidiary thereof from any representative, officer, director, or employee, or
from any books or records or from personal inspection, os such other party, and
shall not use such data or information or disclose the same to others, except
(i) to the extent such data or information is published, is a matter of public
knowledge, or is required by law to be published; and (ii) to the extent that
such data or information must be used or disclosed in order to consummate the
transactions contemplated by this Agreement.
Section 9.06 SCHEDULES; KNOWLEDGE. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
15
Section 9.07 THIRD PARTY BENEFICIARIES. This contract is solely between
LOCX and DASI and the DASI Sole Shareholder, and, except as specifically
provided, no director, officer, stockholder, employee, agent, independent
contractor, or any other person or entity shall be deemed to be a third party
beneficiary of this Agreement.
Section 9.08 ENTIRE AGREEMENT. This Agreement represents the entire
agreement between the parties relating to the subject matter hereof, including
This Agreement alone fully and completely expresses the agreement of the parties
relating to the subject matter hereof. There are no other courses of dealing,
understandings, agreements, representations, or warranties, written or oral,
except as set forth herein.
Section 9.09 SURVIVAL. The representations, warranties, and covenants of
the respective parties shall survive the Closing Date and the consummation of
the transactions herein contemplated.
Section 9.10 COUNTERPARTS. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 9.11 AMENDMENT OR WAIVER. Every right and remedy provided herein
shall be cumulative with every other right and remedy, whether conferred herein,
at law, or in equity, and may be enforced concurrently herewith, and no waiver
by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may be amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance hereof may be extended by a
writing signed by the party or parties for whose benefit the provision is
intended.
16
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement
to be executed by their respective officers, hereunto duly authorized, as of the
date first above-written.
LOCH EXPLORATION, INC.
By:
----------------------------------------
Xxxxx X. Xxxx, President
LOCH ENERGY, INC.
By:
----------------------------------------
Xxxxxxx Xxxxx, Secretary
LEI MAJORITY SHAREHOLDERS
XXXXX X. XXXX, INDIVIDUALLY
By:
----------------------------------------
Xxxxx X. Xxxx
SOUTHPORT CAPITAL CORPORATION
By:
----------------------------------------
Xxxxx X. Xxxx, President
DESIGN AUTOMATION SYSTEMS INCORPORATED
By:
----------------------------------------
Xxxx X. Xxxx, Chief Executive Officer
DASI SOLE SHAREHOLDER
By:
----------------------------------------
Xxxx X. Xxxx
17
LIST OF SCHEDULES
SCHEDULE SCHEDULE DESCRIPTION
-------- --------------------
1.01 LOCX Articles of Incorporation and By-Laws
1.02(a) Certain Parties to be Issued LOCX Shares of Common Stock
1.02(b) LOCX Shareholders List
1.09(a) Assignment
1.09(b) Distribution Agreement
2.01 Ownership of DASI Shares
3.01 DASI Articles of Incorporation and By-Laws
3.02 DASI Capitalization
3.04(a) DASI Financial Statements
3.04(b) DASI Income Tax Forms
3.04(f) DASI Assets
3.06 DASI Options or Warrants
3.07 DASI Absence of Certain Changes or Events
3.08 DASI Title and Related Matters
3.09 DASI Litigation and Proceedings
3.10 DASI Contracts
3.11 DASI Material Contract Defaults
3.12 DASI Conflicts with Other Instruments
3.13 DASI Governmental Authorizations
3.14 DASI Non-Compliance with Laws and Regulations
3.15 DASI Insurance
3.16 DASI Board of Directors and Shareholders Minutes
3.17 DASI Material Transactions or Affiliations
3.19(a) DASI Real Property
3.19(b) DASI Accounts Receivable
3.19(c) DASI Accounts Payable
5.04 Letters of Representation
18
