EXHIBIT 10.31
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "AGREEMENT") is entered into as of
the 12th day of January, 2000, by and among National Information Consortium,
Inc., a Colorado corporation ("NIC"), Conquest, Inc., a NIC entity, a Colorado
corporation (the "COMPANY"), and the members (the "CONQUEST MEMBERS") of
Conquest Softworks, L.L.C., a Colorado limited liability company ("CONQUEST").
RECITALS
WHEREAS, NIC and the Conquest Members will form the Company for the
purpose of carrying out the transactions contemplated by this Agreement;
WHEREAS, NIC desires to contribute the NIC Assets (as defined below) to
the Company in exchange for fifty percent (50%) of the shares of the Company's
common stock, par value $.001 per share (the "SHARES") outstanding immediately
following the Closing (as defined below), subject to the terms and conditions of
this Agreement; and
WHEREAS, the Conquest Members desire to contribute all of the member
interests in Conquest (the "MEMBER INTERESTS") to the Company in exchange for
fifty percent (50%) of the Shares outstanding immediately following the Closing,
subject to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein contained, and intending to be legally bound
hereby, NIC, the Company and the Conquest Members hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the following meanings:
"AGREEMENT" shall mean this Contribution Agreement, dated January 12,
2000, by and among NIC, the Company and the Conquest Members.
"ARTICLES OF INCORPORATION" shall mean the Articles of Incorporation of
the Company, substantially in the form attached hereto as Exhibit 1.1, as the
same may be amended, supplemented or otherwise modified from time to time.
"CLOSING" shall have the meaning set forth in Section 3.1 of this
Agreement
"CLOSING DATE" shall mean the actual date of the Closing.
"CONQUEST" shall mean Conquest Softworks, L.L.C., a Colorado limited
liability company.
"GAAP" means generally accepted accounting principles as currently in
effect in the United States consistently applied.
"GOVERNMENTAL AUTHORITY" shall mean any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government, but does not include any such entity in its capacity as a party
to any contract.
"LIABILITIES" shall mean, as to any Person, all debts, liabilities and
obligations, direct, indirect, absolute or contingent of such Person or entity,
whether accrued, vested or otherwise, whether known or unknown and whether or
not actually reflected, or required by GAAP to be reflected, in such Person's
balance sheets or other books and records.
"LIENS" shall mean any adverse claims, liens, security interests,
charges, leases, licenses and other encumbrances of any kind and nature.
"MEMBER INTERESTS" shall mean the member interests in Conquest, as set
forth in Schedule 2.2.
"COMPANY" shall mean Conquest, Inc., a NIC entity, a Colorado
corporation.
"NIC" shall mean National Information Consortium, Inc., a Colorado
corporation.
"NIC ASSETS" shall mean the assets set forth on Schedule 2.1 to be
contributed by NIC to the Company pursuant to the terms and conditions of this
Agreement.
"PERSON" shall mean any individual, corporation, partnership, joint
venture, trust, incorporated organization, limited liability company, other form
of business or legal entity or Governmental Authority.
"RELATED AGREEMENTS" shall mean, collectively, the Common Stock
Purchase Agreement to be entered by and among NIC and the Conquest Members,
substantially in the form of Exhibit 1.2 attached hereto, and the Investors'
Rights Agreement to be entered into by and among the Company, NIC and the
Conquest Members, substantially in the form of Exhibit 1.3 attached hereto.
"SHARES" shall mean the shares of the Company's common stock, par value
$.001 per share.
ARTICLE II
CONTRIBUTION OF ASSETS; ASSUMPTION OF LIABILITIES
2.1 CONTRIBUTIONS OF NIC. Subject to the terms and conditions contained
in this Agreement, at the Closing NIC shall contribute, transfer, assign, convey
and deliver to the Company, and the Company shall acquire from NIC free and
clear of all liens and encumbrances, the NIC Assets as set forth in Schedule 2.1
hereto, which assets consist of the following:
(i) all of the NIC software business operations and assets (including
all sources codes, software applications, contracts and potential
contracts and other assets) for Uniform Commercial Code internal
government office software and corporations/business entities internal
government office software for secretary of states offices; and
(ii) the sum of Two Million Dollars ($2,000,000) in cash.
The parties hereto hereby agree and acknowledge that the remaining NIC
business shall not be included in the NIC Assets, including but not limited to
all government database filing and interface software. NIC shall execute and
deliver such bills of sale and other documents of transfer as may be necessary
or reasonably requested to effect and memorialize the contributions, transfers,
assignments, conveyances and deliveries set forth in this Section 2.1.
2.2 CONTRIBUTIONS OF CONQUEST MEMBERS. Subject to the terms and
conditions contained in this Agreement, at the Closing each Conquest Member
shall contribute, transfer, assign, convey and deliver to the Company, and the
Company shall acquire from the Conquest Member, free and clear of all liens and
encumbrances, all of the Conquest Member's right, title and interest in: (i) the
Member Interests as set forth in Schedule 2.2 (which the Conquest Members
represent and warrant constitute all of the issued and outstanding member
interests in Conquest); and (ii) source codes, domain names, and ISP addresses
developed by or used in Conquest's business.
Each Conquest Member shall execute and deliver such bills of sale and
other documents of transfer as may be necessary or reasonably requested to
effect and memorialize the contributions, transfers, assignments conveyances and
deliveries to be made by such Conquest Member under this Section 2.2.
Each Conquest Member understands and agrees that, upon the
contributions, transfers, assignments, conveyances and deliveries set forth in
this Section 2.2, all rights that such Conquest Member may have as a member or
employee of Conquest shall terminate.
2.3 ASSUMPTION OF LIABILITIES. On and after the Closing Date, the
Company will, pursuant to an assumption agreement in a form reasonably
satisfactory to the parties hereto, assume and agree to pay, perform and
discharge when due, all of the following Liabilities (collectively, the "ASSUMED
LIABILITIES"): All of Conquest's executory
contracts, entered into in the ordinary course of its business, to provide
software and related services to state and county governments, and all of the
contracts listed in Schedule 2.1 attached hereto.
2.4 ISSUANCE OF SHARES. As consideration for the contributions of NIC
set forth in Section 2.1 above, and subject to the terms and conditions
contained in this Agreement and the Articles of Incorporation, the Company shall
issue to NIC 15,000,000 validly issued, fully paid and nonassessable Shares of
the Company, which shall constitute fifty percent (50%) of the issued and
outstanding capital stock of the Company on the Closing Date. As consideration
for the contributions of the Conquest Members set forth in Section 2.2 above,
and subject to the terms and conditions contained in this Agreement and the
Articles of Incorporation, the Company shall issue to the Conquest Members an
aggregate of 15,000,000 validly issued, fully paid and nonassessable Shares of
the Company, which shall constitute fifty percent (50%) of the issued and
outstanding capital stock of the Company on the Closing Date.
ARTICLE III
CLOSING
3.1 TIME AND PLACE OF CLOSING. The consummation of the contributions
described herein and the other transactions contemplated hereby (the "CLOSING")
shall take place on January 14, 2000, at the offices of Xxxxxxxx & Xxxxxxxx LLP,
5200 Republic Plaza, 000 Xxxxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000-0000, or at
such other date or location as the parties may mutually agree.
3.2 RELATED AGREEMENTS. On the Closing, the relevant parties shall
enter into the Common Stock Purchase Agreement substantially in the form set
forth as Exhibit 1.2 attached hereto, and the Investors' Rights Agreement
substantially in the form set forth as Exhibit 1.3 attached hereto.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.1 REPRESENTATIONS AND WARRANTIES OF NIC. Except as set forth in
Schedule 4.1 attached hereto, NIC hereby represents and warrants to the other
parties to this Agreement as follows:
(a) DUE ORGANIZATION. NIC is duly organized, validly existing and in
good standing under the laws of the State of Colorado, and has the requisite
power and authority to own or lease its properties and to carry on its business
as presently conducted. NIC has all requisite power and authority to enter into
this Agreement and the Related Agreements and to perform its obligations
hereunder and thereunder.
(b) POWER AND AUTHORITY. The execution, delivery and performance by NIC
of this Agreement and the Related Agreements and the consummation by NIC of the
transactions contemplated hereby and thereby have been duly authorized by all
necessary corporate action. This Agreement has been, and each of the Related
Agreements will on the Closing Date be, duly executed and delivered by NIC and
constitutes or, in the case of the Related Agreements, upon execution thereof
will constitute, a valid and legally binding obligation of NIC, enforceable
against it in accordance with its terms.
(c) GOOD AND MARKETABLE TITLE. NIC has good and marketable title to the
NIC Assets to be contributed hereunder, free and clear of all liens,
encumbrances, equities, security interests and claims whatsoever, with full
right and authority to deliver the same hereunder, and that upon delivery of the
NIC Assets hereunder, the Company will receive good and marketable title
thereto, free and clear of all liens, encumbrances, equities, security interests
and claims whatsoever. The Conquest Members have been provided true and accurate
copies of all contracts listed in Schedule 2.1, and there have been no
amendments or modifications to, or breach of, such contracts as of the date
hereof.
(d) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Related Agreements by NIC and the consummation by NIC of the
transactions contemplated hereby and thereby will not (i) conflict with or
result in a breach of any provision of the charter or bylaws of NIC,
(ii) require any consent, approval, authorization or permit of, or filing
with or notification to, any Governmental Authority, (iii) require the
consent or approval of any Person (other than a Governmental Authority) or
violate or conflict with, or result in a breach of any provision of,
constitute a default (or an event which with notice or lapse of time or both
would become a default) or give to any third party any right of termination,
cancellation, amendment or acceleration under, or result in the creation of a
Lien under, any of the terms, conditions or provisions of any contract,
license or other agreement or instrument to which NIC is a party or by which
it or its assets or property are bound, or (iv) violate or conflict with any
order, writ, injunction, decree, statute, rule or regulation applicable to
NIC; other than any consents and approvals the failure of which to obtain and
any violations, conflicts, breaches defaults and other rights set forth
pursuant to clauses (ii), (iii) and (iv) above which, individually or in the
aggregate, would not reasonably be expected to have a material adverse effect
on the NIC Assets or NIC's ability to perform its obligations under this
Agreement or the Related Agreements.
(e) LEGAL PROCEEDINGS. There is no litigation, proceeding or
governmental investigation to which NIC is a party pending or, to the knowledge
of NIC, threatened against NIC or that relates to the transactions contemplated
by this Agreement which could, either individually or in the aggregate, result
in a material adverse effect on the NIC Assets or which seeks to restrain or
enjoin the consummation of any of the transactions contemplated hereby. NIC is
not in violation of any term of any judgment, writ, decree, injunction or order
entered by any court or governmental authority (domestic or foreign) and
outstanding against NIC or with respect to the NIC Assets, except for such
violations which could not, individually or in the aggregate, have a material
adverse effect on the NIC Assets. To the knowledge of NIC, there are no facts
which would provide a basis for any successful prosecution of any such
litigation, proceeding or investigation.
(f) NO FEES. Neither NIC nor its officers, directors or employees, on
behalf of NIC, has employed any broker or finder or incurred any other Liability
for any brokerage fees, commissions or finders' fees in connection with the
transactions contemplated by this Agreement.
4.2 REPRESENTATIONS AND WARRANTIES OF THE CONQUEST MEMBERS. Except as
set forth in Schedule 4.2 attached hereto, each of the Conquest Members hereby
represents and warrants to NIC and the Company as follows:
(a) DUE ORGANIZATION OF CONQUEST. Conquest is duly organized, validly
existing and in good standing under the laws of the State of Colorado, and has
the requisite power and authority to own or lease its properties and to carry on
its business as presently conducted.
(b) POWER AND AUTHORITY. This Agreement has been, and each of the
Related Agreements will on the Closing Date be, duly authorized, executed and
delivered by the Conquest Member and constitutes or, in the case of the Related
Agreements, upon execution thereof will constitute, valid and binding
obligations of the Conquest Member enforceable against such Conquest Member in
accordance with its terms.
(c) FINANCIAL INFORMATION. (i) The unaudited balance sheet of Conquest
as at December 31, 1999 (such latest balance sheet being referred to herein as
the "BALANCE SHEET") and the related statements of operations and cash flows for
the period ending December 31, 1999, copies of which have been furnished to NIC
and which are attached hereto as Schedule 4.2(c), present fairly in all material
respects the financial condition of Conquest as at December 31, 1999, and the
results of its operations for the twelve-month period ending on December 31,
1999. At December 31, 1999, Conquest did not have any material contingent
obligation, contingent liability or liability for taxes, or any long-term lease
or unusual forward or long-term commitment not reflected in the Balance Sheet or
otherwise disclosed in the Schedules to this Agreement.
(ii) Except to the extent set forth in the Balance Sheet, Conquest does
not have any Liabilities or obligations (absolute, accrued, contingent or
otherwise), whether due or to become due which would be required, in accordance
with GAAP, to be set forth on a balance sheet of Conquest, other than any such
Liabilities or obligations incurred since December 31, 1999 in the ordinary
course of business consistent with past practice.
(d) GOOD AND MARKETABLE TITLE. Such Conquest Member has good and
marketable title to all Member Interests and other assets to be contributed by
such Conquest Member hereunder, free and clear of all liens, encumbrances,
equities, security interests and claims whatsoever, with full right and
authority to deliver the same hereunder, and that upon delivery of such Member
Interests hereunder, the Company will
receive good and marketable title thereto, free and clear of all liens,
encumbrances, equities, security interests and claims whatsoever.
(e) NO VIOLATION. The execution, delivery and performance of this
Agreement and the Related Agreements by such Conquest Member and the
consummation by such Conquest Member of the transactions contemplated hereby and
thereby will not (i) conflict with or result in a breach of any provision of the
organizational documents of Conquest, (ii) require any consent, approval,
authorization or permit of, or filing with or notification to, any Governmental
Authority, (iii) require the consent or approval of any Person (other than a
Governmental Authority) or violate or conflict with, or result in a breach of
any provision of, constitute a default (or an event which with notice or lapse
of time or both would become a default) or give to any third party any right of
termination, cancellation, amendment or acceleration under, or result in the
creation of a Lien under, any of the terms, conditions or provisions of any
contract, license or other agreement or instrument to which Conquest or such
Conquest Member is a party or by which they or their respective assets or
property are bound, or (iv) violate or conflict with any order, writ,
injunction, decree, statute, rule or regulation applicable to Conquest or such
Conquest Member; other than any consents and approvals the failure of which to
obtain and any violations, conflicts, breaches defaults and other rights set
forth pursuant to clauses (ii), (iii) and (iv) above which, individually or in
the aggregate, would not reasonably be expected to have a material adverse
effect on the assets, business or condition (financial or otherwise) of Conquest
or the Conquest Member or the Conquest Member's ability to perform its
obligations under this Agreement or the Related Agreements.
(f) LEGAL PROCEEDINGS. There is no litigation, proceeding or
governmental investigation to which Conquest is a party pending or, to the
knowledge of the Conquest Member, threatened against Conquest or that relates to
the transactions contemplated by this Agreement which could, either individually
or in the aggregate, result in a material adverse effect on the assets, business
or condition (financial or otherwise) of Conquest or which seeks to restrain or
enjoin the consummation of any of the transactions contemplated hereby. Conquest
is not in violation of any term of any judgment, writ, decree, injunction or
order entered by any court or governmental authority (domestic or foreign) and
outstanding against Conquest or with respect to its assets, except for such
violations which could not, individually or in the aggregate, have a material
adverse effect on the assets, business or condition (financial or otherwise) of
Conquest. To the knowledge of such Conquest Member, there are no facts which
would provide a basis for any successful prosecution of any such litigation,
proceeding or investigation.
(g) NO FEES. Except as set forth in Schedule 4.2(g) hereto, such
Conquest Member has not employed any broker or finder or incurred any other
Liability for any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated by this Agreement.
4.3 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. The representations and
warranties given by the parties in Article IV shall survive the Closing until
the third
anniversary of the Closing Date, at which time such representations and
warranties will terminate.
ARTICLE V
COVENANTS
5.1 FILINGS. As promptly as practicable after the date of this
Agreement, each of the parties hereto shall make or cause to be made all filings
and submissions under applicable laws and regulations, if any, as may be
required for the consummation of the transactions contemplated by this
Agreement. Each of the parties hereto shall coordinate and cooperate in
exchanging such information and providing such reasonable assistance as may be
requested by either of them in connection with the filings and submissions
contemplated by this Section 5.1.
5.2 CONSENTS. Each of the parties hereto shall use their best efforts
to obtain all necessary consents, approvals and waivers of all Governmental
Authorities necessary for the consummation of the transactions contemplated by
this Agreement and all consents, approvals and waivers required under any
contract, license or other agreement to which it is a party.
5.3 AGREEMENT TO COOPERATE; FURTHER ASSURANCES. Subject to the terms
and conditions of this Agreement, each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all action and to do, or cause
to be done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. In case at any time after the Closing Date any further action is
necessary or desirable to transfer any of the NIC Assets or the Member Interests
to the Company (including obtaining any third party consents), to effect the
assumption by the Company of the Assumed Liabilities or otherwise to carry out
the purposes of this Agreement, the parties hereto shall execute such further
documents (including assignments, acknowledgements and consents and other
instruments of transfer) and shall take such further action as shall be
necessary or desirable to effect such transfer and to otherwise carry out the
purposes of this Agreement, in each case to the extent not inconsistent with
applicable law.
5.4 CONDUCT OF CONQUEST PENDING THE CLOSING DATE. The Conquest Members
agree that except with the prior written consent of NIC, prior to the Closing
Date Conquest shall:
(a) operate its business only in the usual, regular and ordinary
manner, on a basis consistent with past practice and, to the extent consistent
with such operation, use its reasonable efforts to preserve its present business
organization intact, keep available the services of its present employees,
preserve its present business relationships and maintain all rights, privileges
and franchises necessary or desirable in the normal conduct of its business;
(b) maintain its inventory of supplies, parts and other materials and
keep its books, accounts, files and records in the usual, regular and ordinary
manner, on a basis consistent with past practice, and comply with and perform in
all material respects all laws and contractual and other obligations applicable
to Conquest's business;
(c) maintain in full force and effect adequate insurance with respect
to Conquest's business and the employees of Conquest covering risks customarily
insured by similar businesses;
(d) not enter into any contract, agreement or other commitment which
involves aggregate consideration in excess of $10,000 except for purchases and
sales of inventories and advertising promotion in the ordinary course of
business consistent with past practice;
(e) except as required by applicable law or to the extent required
under existing employee benefit plans, agreements or arrangements as in effect
on the date of this Agreement, not (i) increase the compensation or fringe
benefits of any of Conquests' officers or employees, except for increases, in
the ordinary course of business, in salary or wages of employees who are not
officers, (ii) except in the ordinary course of business grant any severance or
termination pay, (iii) hire, except in the ordinary course of business, any new
employees or consultants, or (iv) enter into or amend or terminate any
collective bargaining, bonus, profit sharing, thrift, compensation, pension,
retirement, deferred compensation, employment, termination, severance or other
plan, agreement, trust, fund, policy or arrangement for the benefit of any past
or present officers or employees;
(f) not dispose of or abandon any of the Conquest assets, other than
the disposition of obsolete or worn-out equipment or machinery in the ordinary
course of business, consistent with past practice;
(g) not (i) permit or allow any of the Conquest assets to become
subject to any Liens, or (ii) waive any material claims or rights relating to
the Conquest business or assets;
(h) not acquire or agree to acquire outside the ordinary course of
business any assets that are material, individually or in the aggregate, to the
Conquest business, or make or agree to make any capital expenditures except for
capital expenditures not in excess of $10,000 for any individual expenditure and
$50,000 in the aggregate;
(i) not transfer any rights of material value of the Conquest business
or modify or change in any material respect any existing license, lease,
contract or other document relating to the operations of the Conquest business,
other than in the ordinary course of business consistent with past practice;
(j) not change any material accounting principle that would affect the
Balance Sheet;
(k) not pledge or otherwise use any Conquest assets as collateral or
security for any indebtedness of Conquest or any other Person other than liens
arising in the ordinary course of business under existing agreements that are
released prior to the Closing;
(m) pay all trade payables, accrued expenses (including legal and other
professional fees and the finders fees identified in Schedule 4.2(g) attached
hereto) and payroll and other taxes in accordance with past practice and all
applicable terms thereof and legal requirements; and
(n) not authorize any of, or commit or agree to take any of, the
foregoing prohibited actions.
5.5 CONDUCT OF NIC PENDING THE CLOSING DATE. NIC agrees that, except
with the prior written consent of the Conquest Members, prior to the Closing
Date NIC shall:
(a) operate the NIC Assets only in the usual, regular and ordinary
manner, on a basis consistent with past practice and, to the extent consistent
with such operation, use its reasonable efforts to preserve the NIC Assets
intact, and comply with and perform in all material respects all laws and
contractual and other obligations applicable to the NIC Assets;
(b) not dispose of or abandon any of the NIC Assets, permit or allow
any of the NIC Assets to become subject to any Liens, or waive any material
claims or rights relating to the NIC Assets;
(c) not transfer any rights of material value of the NIC Assets or
modify or change in any material respect any existing license, contract or other
document relating to the operations of the NIC Assets, other than in the
ordinary course of business consistent with past practice;
(d) not pledge or otherwise use any NIC Assets as collateral or
security for any indebtedness of NIC or any other Person other than liens
arising in the ordinary course of business under existing agreements that are
released prior to the Closing; and
(e) not authorize any of, or commit or agree to take any of, the
foregoing prohibited actions.
5.6 PUBLIC STATEMENTS. Before any party shall release any information
concerning this Agreement or the matters contemplated hereby which is intended
for or may result in public dissemination thereof, they shall cooperate with the
other parties, shall furnish drafts of all documents or proposed oral statements
to the other parties, provide the other parties the opportunity to review and
comment upon any such documents or statements and shall not release or permit
release of any such information
without the consent of the other parties, except to the extent required by
applicable law or the rules of any securities exchange or automated quotation
system on which its securities are traded.
5.7 ADDITIONAL COVENANTS OF THE CONQUEST MEMBERS.
(a) Each Conquest Member acknowledges that: (i) he has occupied a
position of trust and confidence with Conquest and has become familiar with
Conquest's Confidential Information; (ii) Conquest's products and services are
marketed throughout the United States; (iii) Conquest competes with other
businesses that are or could be located in any part of the United States; and
(iv) the confidentiality obligations and covenant not to compete set forth below
are reasonable and necessary to protect and preserve the Conquest business.
(b) For purposes of this Agreement, "Confidential Information" shall
mean any and all of the following which are the subject of reasonable efforts to
maintain their secrecy and which derive independent economic value (whether
actual or potential) from not being generally known to other persons: compute
software and programs (including object code and source code); computer software
and database technologies, systems, structures and architectures (and related
processes, formulae, compositions, improvements, devices, inventions and other
information); inventions and ideas; successes and failures; specifications;
processes; past, current and planned research and development; price lists;
market studies; business plans; and other information relating to the business
operations of Conquest. The following information is not regarded as
confidential and is excluded from the definition of Confidential Information:
(i) information which at the time of disclosure to the
Conquest Member was in the public domain or which, after disclosure to the
Conquest Member, became part of the public domain through no action by, or fault
of, the Conquest Member;
(ii) information which can be shown by the Conquest Member
through tangible evidence to have been know to the Conquest Member at the time
of disclosure and not acquired directly or indirectly as a consequence of or
through his employment or ownership status with Conquest or Conquest Software,
Inc.; or
(iii) information which was received by the Conquest Member
from a third party having the legal right to transmit it.
(c) Each Conquest Member agrees that he will not disclose or use any
Confidential Information, except as required for the faithful performance of his
duties to the Company and that he will take reasonable precautions against the
unauthorized disclosure or use of Confidential Information.
(d) Each Conquest Member further covenants that, in order to protect
the value of the Conquest membership interests and other assets being
contributed to the
Company, he shall not for a period of two (2) years from the date of this
Agreement, directly or indirectly engage (whether as owner, partner,
investor, employee, advisor, consultant, contracting party, referring source
or otherwise) in any business anywhere in the United States that is in
competition with the Company's Business (as defined in the Investors' Rights
Agreement, attached hereto). This covenant not to compete includes, but is
not limited to, activities with respect to software object technology design,
development, sales or consulting involving systems for the filing, searching,
indexing and database management of Uniform Commercial Code documents,
corporation documents and records, real estate and land records, motor
vehicle registration, titles, licensing and records, court documents and
records, trademark registration, professional licensing and tax assessment.
Notwithstanding the foregoing, a Conquest Member may purchase or otherwise
acquire up to (but not more than) one percent of any class of securities of
any enterprise (but without otherwise participating in the activities of such
enterprise) if such securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934, as amended.
ARTICLE VI
CONDITIONS PRECEDENT TO CLOSING
6.1 CONDITIONS TO EACH PARTY'S CLOSING OBLIGATIONS. The respective
obligations of each party to consummate the transactions contemplated by this
Agreement shall be subject to the fulfillment of the following conditions on or
prior to the Closing Date:
(a) No statute, rule, regulation, executive order, decree, or
preliminary or permanent injunction shall have been enacted, entered,
promulgated or enforced by any state, federal or foreign court of competent
jurisdiction or governmental authority which prohibits consummation of the
transactions contemplated by this Agreement and the Related Agreements, whether
temporary, preliminary or permanent; provided, however, that the parties hereto
shall use their reasonable commercial efforts to have such order, decree or
injunction vacated; and
(b) all orders, consents and approvals of Governmental Authorities
legally required for the consummation of the transactions contemplated by this
Agreement shall have been obtained and be in effect at the Closing Date, except
those for which failure to obtain such consents and approvals would not,
individually or in the aggregate, have a material adverse effect on the assets,
business or condition (financial or otherwise) of the Company.
6.2 CONDITIONS TO THE CLOSING OBLIGATIONS OF NIC. The obligations of
NIC to consummate the transactions contemplated by this Agreement shall be
subject to the fulfillment of the following additional conditions:
(a) the Conquest Members shall have performed in all material respects
its obligations under this Agreement required to be performed by it at or prior
to the Closing Date, and the representations and warranties of the Conquest
Members set forth in this
Agreement shall be true and correct in all material respects at and as of the
Closing Date as if made at and as of such time, except to the extent that any
such representation or warranty specifically speaks to a specified date, in
which case such representation or warranty shall have been true and correct
as of such date; and
(b) the Company shall have all intellectual property rights necessary
to conduct its business, except for such rights the failure of which to have
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the assets, business or condition (financial or
otherwise) of the Company.
6.3 CONDITIONS TO THE CLOSING OBLIGATION OF THE CONQUEST MEMBERS. The
obligation of the Conquest Members to consummate the transactions contemplated
by this Agreement shall be subject to the fulfillment of the following
additional conditions:
(a) NIC shall have performed in all material respects its obligations
under this Agreement required to be performed by it at or prior to the Closing
Date, and the representations and warranties of NIC set forth in this Agreement
shall be true and correct in all material respects at and as of the Closing Date
as if made at and as of such time, except to the extent that any such
representation or warranty specifically speaks to a specified date, in which
case such representation or warranty shall have been true and correct as of such
date; and
(b) the Company shall have all intellectual property rights necessary
to conduct its business, except for such rights the failure of which to have
would not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the assets, business or condition (financial or
otherwise) of the Company.
ARTICLE VII
TERMINATION
7.1 TERMINATION. This Agreement may be terminated at any time prior to
the Closing by:
(a) the mutual written consent of NIC and the Conquest Members;
(b) either NIC or the Conquest Members if (i) any Governmental
Authority, the consent of which is a condition to the obligations of each party
hereto to consummate the transactions contemplated hereby, shall have determined
not to grant its consent (or imposes material conditions with respect thereto
such that the condition precedent set forth in Section 6.1(c) is incapable of
being satisfied) and all appeals of such determination shall have been taken and
have been unsuccessful; or (ii) any court of competent jurisdiction in the
United States shall have issued an order, judgment or decree (other than a
temporary restraining order) restraining, enjoining or otherwise prohibiting the
transactions contemplated hereby and such order, judgment or decree shall have
become final and nonappealable;
(c) NIC if there has been a material breach by a Conquest Member of any
representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within ten days following receipt by the
Conquest Members of notice of such breach;
(d) the Conquest Members if there has been a material breach by NIC of
any representation, warranty, covenant or agreement set forth in this Agreement,
which breach has not been cured within ten days following receipt by NIC of
notice of such breach; or
(e) either NIC or the Conquest Members by written notice to the other
on or after February 15, 2000 if the Closing has not occurred prior to receipt
of such notice.
7.2 EFFECT OF TERMINATION. In the event of termination of this
Agreement as provided in Section 7.1 hereof, this Agreement shall forthwith
become void (except this Section 7.2, and Sections 5.6 hereof, which shall
survive the termination) and there shall be no liability on the part of any
parties or their respective officers or directors except for any breach of any
of its obligations under Section 5.6 hereof. Notwithstanding the foregoing, no
party hereto shall be relieved from liability for any willful breach of this
Agreement.
ARTICLE VIII
INDEMNIFICATION
8.1 INDEMNIFICATION BY NIC AND THE CONQUEST MEMBERS. NIC and each
Conquest Member hereby agree to indemnify the Company and defend and hold it
harmless from and against any and all claims, demands, liabilities, costs,
expenses, penalties, damages and losses, including, without limitation,
attorneys' fees, resulting from any misrepresentation or breach of warranty or
breach of covenant made by such party in this Agreement or in any document,
certificate, or exhibit given or delivered to the Company pursuant to or in
connection with this Agreement.
8.2 SURVIVAL. The indemnification provisions of Section 8.1 shall
survive beyond the Closing. Notwithstanding the foregoing, the obligations to
indemnify the Company and to hold it harmless for misrepresentations and
breaches of warranties made in this Agreement shall terminate when the
applicable representation or warranty terminates pursuant to Section 4.3 hereof;
provided, however, that such obligation to indemnify and hold harmless shall not
terminate with respect to any item as to which the Company shall have, before
the expiration of the applicable period, previously made a claim by delivering a
notice (stating in reasonable detail the basis of such claim) to the
indemnifying party.
ARTICLE IX
GENERAL PROVISIONS
9.1 NOTICES. All notices required or permitted hereunder shall be in
writing and shall be deemed effectively given: (i) upon personal delivery to the
party to be notified; (ii) when sent by confirmed telex or facsimile if sent
during normal business hours of the recipient, if not, then on the next business
day; or (iii) one day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All
communications shall be sent to the respective parties at the addresses or
facsimile numbers set forth below:
If to the Conquest Members:
To the address set forth below the Conquest Member's signature
hereto
with a copy to:
Boardman, Suhr, Xxxxx & Field LLP
Xxxxxx Xxxxx
Xxx Xxxxx Xxxxxxxx Xxxxxx
P.O. Box 927
Madison, Wisconsin 53701-0927
Attention: Xxx X. Xxxxxxxxxx
Telecopier: (000) 000-0000
If to NIC:
Xxx Xxxx
President and Chief Executive Officer
National Information Consortium, Inc.
12 Corporate Xxxxx
00000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Telecopier: 000-000-0000
with a copy to:
Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx III, Esq.
Telecopier: 000-000-0000
9.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
understanding between the parties hereto with respect to the subject matter
hereof.
9.3 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.
9.4 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
9.5 INTERPRETATION OF AGREEMENT. The article, section and other
headings of this Agreement are for convenience of reference only and shall not
be construed to affect the meaning of any provision contained herein.
9.6 NO ASSIGNMENT; SUCCESSORS AND ASSIGNS. The parties' respective
rights and obligations hereunder may not be assigned, transferred, pledged, or
encumbered, in any manner, direct or indirect, contingent or otherwise, in whole
or in part, voluntarily or by operation of law, without the prior written
consent of the other parties, provided that the foregoing shall not apply to any
assignment by operation of law to any successor Person in any merger or
consolidations, This Agreement shall be binding on the parties hereto and their
respective successors and permitted assigns.
9.7 EXPENSES. Except as set forth in this Agreement, whether or not the
transactions contemplated by this Agreement are consummated, all legal and other
costs and expenses incurred in connection with this Agreement and the
transactions contemplated hereby shall be paid by the party incurring such
costs.
IN WITNESS WHEREOF, the parties hereto have entered into this Agreement
as of the date first set forth above.
NATIONAL INFORMATION CONSORTIUM, INC.
By: /s/ Xxxxx Childress
-------------------------------------------
XXXXX CHILDRESS
Chief Financial Officer
Address: National Information Consortium, Inc.
12 Corporate Xxxxx
00000 Xxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
Facsimile: __________
CONQUEST, INC., A NIC ENTITY
/s/ Xxxxxxx Xxxxxxxx
-------------------------------------------
By: Xxxxxxx Xxxxxxxx
Address: 000 Xxxxxx Xxxxxx, Xxxxx 0
Xxxxxxx, XX 00000
CONQUEST MEMBERS:
Xxxxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxxxxx
-------------------------------------------
Address: 00 Xxxxx Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
The Xxxxxx Family Foundation Inc.
/s/ Xxxxx Xxxxxx
-------------------------------------------
By: Xxxxx Xxxxxx
Address: 0000 X. Xxxxxxxx Xxxx Xxxx
Xxxxx 000
Xxxxxxxxxx, XX 00000
Xxxxx Xxxxx
/s/ Xxxxx Xxxxx
-------------------------------------------
Address: 000 Xxxxxxx Xxxx
Xxxxxxx, XX 00000
Xxxxxx Xxxxxxxx, Sr.
/s/ Xxxxxx Xxxxxxxx, Sr.
-------------------------------------------
Address: 0000 X. Xxxxxx Xxxxx Xxxx
Xxxxxx, XX 00000
Xxxxxxx Xxxxxx
/s/ Xxxxxxx Xxxxxx
-------------------------------------------
Address: 0000 Xxxxxxx Xxxx, #000
Xxxxxxx, XX 00000