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ASSET and STOCK PURCHASE AGREEMENT
between
DAVIDSON & ASSOCIATES, INC.
and
CAPITOL MULTIMEDIA, INC.
Dated: April 16, 1997
TABLE OF CONTENTS
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Page
ARTICLE I. SALE OF ASSETS AND ASSUMPTION OF LIABILITIES........... 1
Section 1.1 Sale of Assets......................................... 1
Section 1.2 Excluded Assets........................................ 2
Section 1.3 Assumption of Liabilities.............................. 4
Section 1.4 Purchase Price of Purchased Assets..................... 3
Section 1.5 Payment of Sales Tax and Related Taxes................. 4
Section 1.6 Allocation............................................. 4
ARTICLE II. REPRESENTATIONS AND WARRANTIES OF THE SELLER........... 4
Section 2.1 Organization and Authority of Seller................... 4
Section 2.2 Due Authorization of Seller............................ 4
Section 2.3 Organization; Qualification of ZAO AMI................. 5
Section 2.4 Capital Stock of ZAO AMI............................... 5
Section 2.5 Claims Against and Compliance with Laws Related to ZAO
AMI ................................................... 5
Section 2.6 Approvals and Consents................................. 6
Section 2.7 Ownership of Assets.................................... 6
Section 2.8 Financial Statements................................... 6
Section 2.9 No Undisclosed Liabilities............................. 6
Section 2.10 Massachusetts Bulk Sales Code.......................... 6
Section 2.11 No Litigation.......................................... 6
Section 2.12 Contracts.............................................. 6
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Section 2.13 Compliance with Laws................................... 7
Section 2.14 Intangible Assets...................................... 8
Section 2.15 Machinery and Equipment................................ 9
Section 2.16 Brokers................................................ 10
Section 2.17 Conflicting Instruments................................ 10
Section 2.18 Leases................................................. 10
Section 2.19 Environmental Matters.................................. 10
Section 2.20 Furniture and Fixtures; Miscellaneous Assets........... 11
Section 2.21 Warranties............................................. 11
Section 2.22 Information Accurate and Complete...................... 11
Section 2.23 SEC Reports............................................ 11
ARTICLE III. REPRESENTATIONS AND WARRANTIES OF THE BUYER............ 12
Section 3.1 Organization and Authority............................. 12
Section 3.2 Due Authorization...................................... 12
Section 3.3 Brokers................................................ 12
Section 3.4 Consents............................................... 12
Section 3.5 Litigation............................................. 12
Section 3.6 No Violation or Approval............................... 12
ARTICLE IV. EMPLOYEES AND CONSULTANTS.............................. 12
Section 4.1 Hiring of Xx. Xxxxxxx.................................. 12
Section 4.2 The Buyer's Obligations................................ 13
Section 4.3 Professional Service Agreement for Xxxxx Xxxxxxxxx,
Xxxxx Xxxxxx and Xxxxxxx Xxxxxxxxxx.................... 13
Section 4.4 The Buyer's Obligations................................ 13
Section 4.5 Employment of Other Employees.......................... 13
Section 4.6 Other Employees of Seller.............................. 13
ARTICLE V. OTHER COVENANTS OF THE SELLER AND THE BUYER............ 13
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Section 5.1 Covenant Not to Compete................................ 13
Section 5.2 Brokers, Advisors and Other Representatives............ 14
Section 5.3 Post-Closing Access to Records......................... 14
Section 5.4 Confidentiality........................................ 14
Section 5.5 Modification of the Blizzard Development Agreement..... 14
Section 5.6 Use by Seller of the Concord Facility.................. 14
Section 5.7 Use by Seller of the Purchased Assets Post Closing..... 14
Section 5.8 Post Closure Registration of the ZAO AMI Shares........ 15
ARTICLE VI. CLOSING................................................ 15
Section 6.1 Closing Date........................................... 15
Section 6.2 Conditions to Closing.................................. 15
Section 6.3 Deliveries by Seller................................... 15
Section 6.4 Deliveries by Buyer.................................... 16
Section 6.5 Subsequent Deliveries.................................. 17
ARTICLE VII. INDEMNIFICATION........................................ 17
Section 7.1 Indemnification by the Seller.......................... 17
Section 7.2 Limitation of Liability................................ 18
Section 7.3 Maximum Indemnification................................ 18
Section 7.4 Claims for Indemnification............................. 18
Section 7.5 Defense of the Claims.................................. 18
Section 7.6 Notice................................................. 19
Section 7.7 Waiver................................................. 19
Section 7.8 Materiality............................................ 19
Section 7.9 Survival............................................... 19
ARTICLE VIII. BINDING EFFECT......................................... 19
ARTICLE IX. GOVERNING LAW.......................................... 19
ARTICLE X. GENERAL................................................ 20
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Section 10.1 Further Assurances..................................... 20
Section 10.2 Severability........................................... 20
Section 10.3 Interpretation......................................... 20
Section 10.4 Expenses............................................... 20
Section 10.5 Counterparts........................................... 20
Section 10.6 Notices................................................ 20
Section 10.7 Exhibits and Schedules................................. 21
Section 10.8 No Waiver.............................................. 21
Section 10.9 Presumptions........................................... 21
Section 10.10 Conflicts Between Agreements........................... 22
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EXHIBITS AND SCHEDULES
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Exhibits
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Exhibit A Xx. Xxxxxxx Employment Contract
Exhibit B Xx. Xxxxxxx Covenant Not to Compete
Exhibit C Xx. Xxxxxxx Proprietary Information Agreement
Exhibit D Modification to the Blizzard Development Agreement
Exhibit E Professional Services Agreement
Exhibit F Assignment and Assumption Agreement
Exhibit G Engine License Agreement
Exhibit H Xxxx of Sale
Exhibit I Assignment and Release, Concord Facility
Exhibit J Third Party Software Assignment Agreement
Exhibit K Stock Power
Schedules
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Schedule 1.1 Purchased Assets
Part 1 Machinery and Capital Equipment
Part 2 Agreements, Contracts and Leases
Part 3 Third Party Software
Part 4 Furniture and Fixtures
Part 5 Intellectual Property
Part 6 Networking and Telephone Equipment
Part 7 Miscellaneous Assets
Schedule 1.2 Excluded Assets
Part 1 Accounts Receivable
Part 2 Cash Accounts
Part 3 Computer equipment, furniture, fixtures and personal items used
by Seller's Continuing Employees at the Concord facility
Part 4 Computer Software Engines and Tools
Part 5 Multimedia Products and Trademarks
Part 6 Distribution Agreements
Part 7 Software Development Capability
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Part 8 List of Seller's Employees continuing to utilize the Concord
Facility
Schedule 1.3 Liabilities
Part 1 Assumed Leases and Operating Costs
Part 2 Assumed Employees - US
Part 3 Assumed Employees - Russia
Part 4 Assumed Severance Arrangements
Part 5 Excluded Liabilities
Schedule 2.6 Approvals and Consents
Schedule 2.7 Ownership of Assets
Schedule 2.8 Changes to the Financial Statements
Schedule 2.9 Undisclosed Liabilities
Schedule 2.11 No Litigation
Schedule 2.14 Exceptions to Disclosure
Schedule 2.18 Leases
Schedule 2.19 Environmental Matters
Schedule 2.21 Warranties
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ASSET and STOCK PURCHASE AGREEMENT
This Asset and Stock Purchase Agreement (this "Agreement") is made and is
effective this 16 day of April, 1997, by and among Davidson & Associates, Inc.,
a California corporation (the "Buyers"), and Capitol Multimedia, Inc., a
Delaware corporation (the "Seller").
WHEREAS, the Seller is engaged in, among other things, the creation,
production and licensing of entertainment and educational software products for
the consumer market, primarily for the children's software market within the
CD-ROM interactive software industry. In addition, Seller is the sole owner of
all of the issued and outstanding capital stock of ZAO AMI, a company organized
and existing under the laws of Russia ("ZAO AMI"), which works with and assists
the Seller to create art, animation and video for interactive software for the
consumer market, particularly in cel animation, computer graphics and multimedia
software programming; and
WHEREAS, The Buyer is engaged in, among other things, the development
and distribution of educational and entertainment software products for the
education and consumer markets in a variety of formats and distribution
channels; and
WHEREAS, Seller desires to sell to Buyer, and Buyer desires to purchase
from Seller, certain assets, properties and other rights specifically identified
herein, used by Seller in production of the multimedia assets, including,
without limitation, all of the issued and outstanding capital stock of ZAO AMI,
but excluding all other assets of Seller including without limitation the
Excluded Assets (as defined below), on all the terms and subject to the
conditions set forth herein.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
contained herein, the parties mutually agree as follows:
ARTICLE I.
SALE OF ASSETS AND ASSUMPTION OF LIABILITIES
Section 1.1
(a) SALE OF STOCK. Upon the terms and subject to the conditions
of this Agreement and in reliance upon the representations, warranties and
agreements herein set forth, Buyer shall purchase and subscribe for, upon the
Closing Date, all of the authorized and issued shares of ZAO AMI common stock,
at a par value per share of 90,000 rubles , which 1,000 Shares shall comprise
all of the issued and outstanding shares of capital stock of ZAO AMI.
(b) SALE OF ASSETS. Subject to the terms and conditions of this
Agreement, at the Closing, the Buyer shall purchase from the Seller, and the
Seller shall sell, convey, and transfer to the Buyer, all of the assets listed
below (collectively, the "Purchased Assets"), except all other assets of Seller
including without limitation the Excluded Assets noted in Section 1.2 below,
including:
(i) MACHINERY AND CAPITAL EQUIPMENT. The machinery and
capital equipment listed on Part 1 of Schedule 1.1 hereto.
(ii) AGREEMENTS. All of the Seller's rights:
(a) to develop a software product for Buyer's
division Blizzard Entertainment and certain of its rights to a royalty
stream therefrom
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under a development agreement dated April 1, 1996 listed on Part 2 of
Schedule 1.1 hereto (the "Blizzard Development Agreement ");
(b) to the real property leases listed on Part 2
of Schedule 1.1 hereto (the "Leases") together with all fixtures and
improvements that inure to the benefit of Lessee under the Leases erected
thereon, and all rights that run with such real property interests;
(c) to the third party software resident on
Seller's computers listed on Part 3 of Schedule 1.1;
(iii) FURNITURE AND FIXTURES. The furniture and fixtures
listed on Part 4 of Schedule 1.1 hereto.
(iv) INTANGIBLE ASSETS.
(a) All intellectual property (collectively, the
"Intellectual Property Rights") related to Seller's Purchased Assets and
the purchase of the stock of ZAO AMI, including without limitation the
Seller's rights (including contractual rights), title and interest in and
to all: (1) trade secrets and proprietary or confidential business and
technical information; (2) proprietary "know-how," whether or not
protectable by patent, copyright or trade secret right; (3) the United
States and foreign trademark Animation Magic and associated goodwill, and
registrations or applications for registration of that xxxx or name; (4)
the claims by the Seller against any other party involving the Seller's
intellectual property, and (5) any other inventions, discoveries,
improvements, information and licenses, and process technology, including
without limitation the Intellectual Property Rights listed on Part 5 of
Schedule 1.1 hereto;
(b) All rights to use, on an exclusive, worldwide
basis the name "Animation Magic" and any combinations, contractions or
similar names using "Animation Magic" as a part thereof (together with
the Intellectual Property Rights the "Intangible Assets").
(c) Rights to license Seller's Magic Composer
Tool Suite Interactive Game Editor and Runtime Engine (" Engine")
currently being utilized under the Blizzard Development Agreement. The
terms for the license of the Engine are contained in and more
particularly described in the "Engine License" contained in Exhibit G,
attached hereto.
(v) NETWORKING AND TELEPHONE EQUIPMENT. All computer
networking and telephone system hardware and software listed on Part 6 of
Schedule 1.1 hereto;
(vi) MISCELLANEOUS ASSETS. The assets listed on Part 7 of
Schedule 1.1 hereto (the "Miscellaneous Assets").
Subject to any rights of any licensor of Seller with
respect to the Intangible Assets, the Purchased Assets shall be acquired by the
Buyer free and clear of all mortgages, pledges, liens, charges, security
interests, encumbrances or other restrictions or obligations of any kind except
with respect to obligations under the Leases.
Section 1.2 EXCLUDED ASSETS. The Purchased Assets shall not include any
other assets, properties or rights of the Seller not identified in Section 1.1
(collectively, the "Excluded Assets") including without limitation the following
listed assets of the Seller:
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(a) ACCOUNTS RECEIVABLE. Subject to Buyer's assumption of
certain receivables under the Blizzard Development Agreement, all accounts
receivable of the Seller existing on the Closing Date (the "Accounts
Receivable"), including without limitation the accounts receivable listed on
Part 1 of Schedule 1.2. hereto.
(b) CASH ACCOUNTS. All cash accounts of the Seller existing on
the Closing Date (the "Cash Accounts"), including without limitation the
accounts listed on Part 2 of Schedule 1.2 hereto.
(c) COMPUTERS, FURNITURE, FIXTURES AND PERSONAL ITEMS Any
computers that are currently being utilized by the three (3) employees of Seller
who are currently working at Seller's Concord, Massachusetts office ("Concord
Facility") and who shall remain employed by Seller after the Closing including
without limitation the computer equipment listed on Part 3 of Schedule 1.2
hereto.
(d) COMPUTER SOFTWARE ENGINES AND TOOLS. The Seller's rights in
and to its multimedia software engines, excluding any licensed rights of Buyer
under the Blizzard Development Agreement as amended and the Engine License. The
software engines and tools are listed on Part 4 of Schedule 1.2.
(e) TAX REFUNDS. Any refunds with respect to taxes paid by or
with respect to the Seller relating to periods prior to the Closing Date.
(f) ENGINEERS AT ZAO AMI. Two software engineers related to
Seller's software development business including Seller's supply chain
management business who will resign from ZAO AMI at the Closing.
(g) MULTIMEDIA PRODUCTS AND TRADEMARKS. The Seller's rights,
title and interest in and to all of its existing and partially completed
products and trademarks, including without limitation the products listed on
Part 5 of Schedule 1.2, together with all of the Seller's rights, title and
interest in characters and game designs related to such products, any
improvements and enhancements added to such products hereafter, and derivative
products and/or sequels, all plans and processes related to production, sale or
distribution of the products and all related United States and foreign
trademarks, service marks, trade names and associated goodwill, and registration
or applications for registration of any such marks or names.
(h) DISTRIBUTION AGREEMENTS. All the Seller's rights under all
of its distribution agreements including without limitation distribution
agreements listed in Part 6 of Schedule 1.2.
(i) SOFTWARE DEVELOPMENT CAPABILITY. The Sellers ownership in
Client Server Technologies, Inc., and assets, and business processes, and
intellectual property related to its software development capability, including
supply chain management software business including without limitation assets
and capabilities listed in Part 7 of Schedule 1.2.
Section 1.3 ASSUMPTION OF LIABILITIES
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(a) LIABILITIES ASSUMED. At the Closing, the Buyer will assume
only those liabilities specifically set forth on Parts 1,2,3 and 4 of Schedule
1.3 hereto (the "Liabilities Assumed").
(b) NO OTHER LIABILITIES ASSUMED. Other than the Liabilities
Assumed, the Seller shall not transfer to the Buyer and the Buyer shall not
assume or undertake any debts, obligations or liabilities of the Seller, whether
accrued, absolute, contingent or otherwise, including without limitation:
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(i) any liability or claim, recorded or unrecorded,
currently payable or payable in the future, arising from any claim,
action, proceeding, investigation or lawsuit against the Seller or its
Shareholders;
(ii) any liability or claim, recorded or unrecorded,
currently payable or payable in the future, arising from any violation of
law by the Seller prior to the Closing;
(iii) any trade payables, accounts payable, warranty claim
or obligation or other accrued liabilities of the Seller; and
(iv) any tax liability or claim, recorded or unrecorded,
currently payable or payable in the future by the Seller to any federal,
state, local or foreign taxing authority.
Section 1.4 PURCHASE PRICE OF PURCHASED ASSETS. The total purchase price
payable to the Seller (the "Purchase Price") shall be $2,500,000.00, payable in
cash at the time of closing in the form of a wire transfer to Seller's bank.
Section 1.6 PAYMENT OF SALES AND RELATED TAXES. The parties acknowledge
that this purchase and sale of assets does not constitute a tax-free
reorganization. Any and all state and local sales, transfer, or similar taxes
imposed on the transfer of the Purchased Assets to the Buyer (collectively,
"Sales Taxes") shall be the responsibility of and borne by the Seller. Any
capital gains or similar taxes, or any other taxes resulting from gain realized
on the sale of the Purchased Assets shall be the responsibility of and borne by
the Seller.
Section 1.6 ALLOCATION. The Buyer and the Seller agree and acknowledge
that the amount represented by the sum of the Purchase Price and the Liabilities
Assumed (as defined above) will be allocated in accordance with the joint
determination by the Buyer and the Seller of fair market value. The Buyer and
the Seller each agrees that the Allocation will be binding on all parties hereto
and that each will report the transactions contemplated by the Agreement for
federal, state and local income tax purposes in accordance with the results of
the Allocation.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF THE SELLER
The Seller, after due inquiry of the officers of Seller, represents and
warrants to the Buyer as follows:
Section 2.1 ORGANIZATION AND AUTHORITY. The Seller is duly
incorporated and organized and is validly existing as a corporation and is in
good standing under the laws of the state of its incorporation. The Seller is
qualified or licensed to conduct its multimedia business in each jurisdiction
where the nature of its activities or where the character of its properties
makes such qualification or licensing necessary and in which failure to so
qualify would have a material adverse effect on it. The Seller has the corporate
power and authority to own the ZAO AMI Shares and the Purchased Assets
attributed to it on Schedule 1.1, to operate and lease its properties, to carry
on its business as now being conducted, to enter into this Agreement, the Xxxx
of Sale (as hereinafter defined) and the Assignment and Assumption Agreement (as
hereinafter defined, together with the Agreement, the Xxxx of Sale, the
"Transaction Documents") and to consummate the transactions contemplated hereby
and thereby.
Section 2.2 Due Authorization of Seller.
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(a) This Agreement, the other Transaction Documents and all
agreements and instruments to be delivered by the Seller pursuant hereto and
thereto, have been (or upon delivery will have been) duly authorized by all
necessary corporate and other action, executed and delivered on behalf of the
Seller, and constitute (or upon delivery will constitute) legal, valid and
binding obligations of the Seller enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization or other laws affecting the enforcement of creditors'
rights generally, and except with respect to judicial limitations on equitable
remedies.
(b) No consent of the shareholders is necessary or required
under applicable law for the execution of this Agreement and other Transaction
Documents and for the consummation of the transactions contemplated hereby.
Section 2.3 ORGANIZATION; QUALIFICATION OF ZAO AMI. ZAO AMI is a duly
organized and validly existing legal entity under the laws of the Russian
Federation, it has the right to own its assets and property, to carry out its
activities and to fulfill its obligations under this Agreement and has taken all
legal steps required under the Foundation Documents and under Russian
Legislation (including, without limitation, the obtaining of all Required
Approvals) to enter into this Agreement and any other agreements to which it is
a party.
Section 2.4 CAPITAL STOCK OF ZAO AMI. The authorized and issued
capital stock of ZAO AMI consists of 1,000 shares of capital stock, with a par
value of 90,000 rubles per share ("ZAO AMI Shares"). The capital stock of ZAO
AMI is duly issued and registered under the laws of the Russian Federation
whether federal or local Seller, is the record and beneficial owner of all of
the stock of ZAO AMI and it is owned free and clear of all encumbrances. At the
Closing, the Seller will deliver or cause to be delivered to the Buyer good and
marketable title to the ZAO AMI Shares as are deliverable hereunder free and
clear of any encumbrances. All of the ZAO AMI Shares are duly and validly
authorized and issued, fully paid and nonassessable, and except as provided in
this Agreement, there is no contract, call or right of any nature whatsoever
with respect to the issuance, sale delivery or transfer of any of the ZAO AMI
Shares nor any impediment, to Buyer's right and ability to register, the ZAO AMI
Shares, in Buyer's name.
Section 2.5 CLAIMS AGAINST AND COMPLIANCE WITH LAWS RELATED TO ZAO
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AMI.
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(a) To the best of Seller's knowledge after due inquiry, no
claims are pending by any state authorities against ZAO AMI with respect to any
payments to the state with respect to employee taxes, pension fund, social
insurance fund, unemployment fund and mandatory medical insurance fund, and in
respect of any budgetary payments to such organizations, or registrations, nor
are there any pending investigations relating to same; and
(b) To the best of Seller's knowledge after due inquiry, ZAO
AMI is current on payment of all its tax obligations in accordance with
applicable legislation and ZAO AMI has filed all tax declarations and other tax
documentation which ZAO AMI is required to file with the tax authorities. ZAO
AMI is duly registered with all necessary tax authorities. No claims against or
investigations of ZAO AMI with respect to its tax obligations exist; and
(c) ZAO AMI has full title to all of its movable property,
there are no pledges or other encumbrances on such property, or claims by third
parties exist with respect to such property. ZAO AMI has the legal right to use
its current premises for purposes of its business, and no claim relating to the
same exists; and
(d) There is no ongoing or to the best knowledge of ZAO AMI,
threatened official investigation of ZAO AMI. ZAO AMI is not aware of any facts
or circumstances which, if disclosed, would give rise to any investigation of
ZAO AMI by state authorities, a claim against ZAO AMI by the state, or liability
of ZAO AMI to the state; and
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(e) ZAO AMI is not and has not been in breach of any currency
regulation and currency control legislation.
(f) The ZAO AMI Shares, when transferred to Seller and
registered in its name had been duly registered by all predecessors of Seller in
the ZAO AMI Shares including but not limited to Seller's subsidiary, Animation
Magic, Inc.
Section 2.6 APPROVALS AND CONSENTS. Except for those consents set
forth in Schedule 2.6 attached hereto (collectively, the "Required Consents"),
no consents, waivers, approvals, authorizations or orders of, or registrations
or qualifications with, any person, bank, corporation, association, governmental
body or court having authority or power to regulate, supervise or direct the
business and affairs of the Seller are necessary for the consummation by the
Seller of the transactions contemplated by this Agreement or the other
Transaction Documents.
Section 2.7 OWNERSHIP OF ASSETS. Except as set forth on Schedule 2.7,
the Seller has good and marketable title to each of the Purchased Assets
attributed to it on Schedule 1.1 hereto and owns such Purchased Assets,
including the ZAO AMI Shares, free and clear of all liens, encumbrances, leases,
security interests and third-party rights and claims whatsoever, and, upon
transfer of the Purchased Assets to the Buyer in accordance with this Agreement,
the Buyer will obtain good and marketable title to such Purchased Assets, free
and clear of any liens, encumbrances, leases, security interests, or claims
whatsoever.
Section 2.8 FINANCIAL STATEMENTS. The Seller has delivered to the
Buyer its statements of assets, liabilities and equity on an income tax basis as
of December 31, 1996, and March 31, 1996, and the related statements of revenue
and expenses on an income tax basis for the fiscal years then ended
(collectively, the "Financial Statements"). The Financial Statements (i) were
prepared in accordance with the books and records of the Seller; (ii) have been
prepared on the accounting basis used by the Seller for income tax purposes;
and; (iii) fairly present the Seller's financial condition and the results of
its operations as at the relevant dates thereof and for the periods covered
thereby. Except as listed on Schedule 2.8 hereto, since December 31, 1996, there
has not been any material adverse change to the financial condition of the
Company as set forth in the December 31, 1996 balance sheet.
Section 2.9 NO UNDISCLOSED LIABILITIES. As of the Closing Date, there
are no liabilities or obligations (whether fixed, accrued, absolute, contingent,
secured, unsecured or otherwise and whether due or to become due) of the Seller
related to the Purchased Assets, except for those obligations listed in the
Financial Statements or incurred in the ordinary course since the date of the
Financial Statements or in Schedule 2.9 attached hereto.
Section 2.10 MASSACHUSETTS BULK SALES CODE. The sale of the Purchased
Assets as contemplated hereunder does not constitute more than one half of the
total inventory and equipment of Seller as measured by the fair market value of
such inventory and equipment as of the date hereof.
Section 2.11 NO LITIGATION. Except as set forth in Schedule 2.11
hereof, there is no action, suit, investigation or proceeding pending against,
or, to the best knowledge of Seller, threatened against or affecting, any of the
Purchased Assets, the Seller, or any of the Seller's property or products before
any court, arbitrator or other tribunal or any governmental body, agency or
official.
Section 2.12 Contracts.
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(a) For purposes of this Agreement, "Contracts" means all
contracts and agreements, contract rights, executory commitments, license
agreements, purchase and sales
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orders, written or oral, relating to the operation of the Seller and ZAO AMI in
connection with the Purchased Assets. Part 2 of SCHEDULE 1.1 sets forth a true
and complete list of all Contracts to which the Seller is bound related to the
Purchased Assets (which have not expired or been terminated):
(i) Employment agreements and any written offers of
employment outstanding.
(ii) Royalty agreements.
(iii) License agreements.
(iv) Consulting agreements for the provisions of
consulting services to the Seller.
(v) Joint venture or partnership agreements with any
other entity.
(vi) Non-competition or similar agreements which prevent
the Seller from competing with any person or corporate entity.
(vii) Confidentiality or employee non-solicitation
agreements with any other person or corporate entity.
(viii) Data provider agreements.
(ix) Distributor agreements.
(x) Capitalized leases.
(xi) Any Contract, not previously listed on Part 2 of
SCHEDULE 1.1 herein, requiring the performance by the Seller of any
obligation for a period of time extending more than one year from the
date of this Agreement or calling for the Seller to pay a consideration
or incur costs of more than $25,000.
(b) The Seller has in all material respects performed, and is
now performing in all material respects, the obligations of, and the Seller is
not in default (nor to the Seller's knowledge, would by the lapse of time or the
giving of notice or both be in default) in respect of any Contract referred to
on Part 2 of Schedule 1.1. To the Seller's knowledge, each of the Contracts or
other instruments shown on Part 2 of Schedule 1.1 is in full force and effect
and is a valid and enforceable obligation against the Seller, and to the
knowledge of the Seller against the other party thereto in accordance with its
terms (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and similar laws affecting creditors'
rights, and, with respect to the remedy of specific performance, equitable
doctrines applicable thereto).
Section 2.13 COMPLIANCE WITH LAWS. The Seller has not been advised
that it is under investigation with respect to or has been threatened in writing
to be charged with or given written notice of any violation of, any law, rule,
ordinance or regulation, or judgment, order or decree entered by any court,
arbitrator or governmental authority, domestic or foreign, applicable to the
Purchased Assets.
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Section 2.14 Intangible Assets.
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(a) INTELLECTUAL PROPERTY. Part 5 of SCHEDULE 1.1 contains a
complete and true list of the following Intellectual Property Rights of the
Seller applicable to the Purchased Assets:
(i) United States and foreign patents and patent
applications;
(ii) copyrights in computer programs and other works of
authorship which are registered with any government agency, or for which
registration applications have been filed;
(iii) United States and foreign trademarks, service marks
and trade names, and all registrations or applications for registration
of any such marks or names;
(iv) proprietary know-how, technology and trade secrets;
(v) proprietary computer software material to the
Purchased Assets as presently conducted, source and object code,
documentation thereof, and other associated rights (the "Seller's
Software Products");
(vi) claims by the Seller against any other party
involving the Seller's intellectual property; and
(vii) other inventions, discoveries, improvements,
information and process technology.
(b) THIRD PARTY SOFTWARE. For purposes of this Agreement,
"Third Party Software" means all software licensed, leased or loaned by third
party vendors or contractors for use by the Seller in connection with its
internal business operations related to the Purchased Assets. To the best of
Seller's knowledge Part 3 of Schedule 1.1 contains a complete list of all Third
Party Software, and all corresponding license agreements (including title of
agreement, effective date, and names of all parties thereto) under which any
rights to use or distribute Third Party Software have been granted to the Seller
other than license agreements included in shrink-wrapped software packages. The
Seller has delivered to the Buyer true and complete copies of all such license
agreements except for those marked in the " License" column listed in Part 3 of
Schedule 1.1.
(c) DISCLOSURES. Except as set forth on Schedule 2.14(c) and
labeled "Exceptions to Disclosures",
(i) The Seller has the exclusive and unrestricted right
in the United States and Canada throughout the world, to possess, use,
modify, and prepare derivative works based on, manufacture, reproduce,
license, sell, distribute and dispose of all of the Intangible Assets,
free and clear of all encumbrances and rights of third parties, has valid
and enforceable rights in each of its Intangible Assets; has the
exclusive right to bring actions for the infringement of, and has taken
all necessary actions to perfect or protect its interest in all
Intellectual Property Rights, free and clear of all encumbrances; and has
received no claim that any of the Intangible Assets is in whole or in
part invalid, unenforceable, ineffective or in violation of the rights of
others.
(ii) There is no pending claim or litigation and to the
Seller's knowledge, there is no threatened claim or litigation,
contesting the right to use,
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sell, license or dispose of any of the Intangible Assets, nor is there
any fact or alleged fact which would reasonably serve as a basis for any
such claim that could materially limit the protection afforded by the
Intangible Assets.
(iii) Each person who participated in the creation of the
Intangible Assets, and Seller's other products either has executed an
assignment of rights of ownership to the Seller or ZAO AMI or was an
employee of the Seller or ZAO AMI acting within the scope of his or her
employment at the time of such creation.
(iv) The Seller is in material compliance with the terms
and conditions of all license agreements governing the use of Third Party
Software.
(v) All Third Party Software used by the Seller for its
internal business operations (including product development and testing)
is licensed for use only on computer equipment located at the Seller's
sites or on computers under control of the Seller's employees or
independent contractors.
(vi) The Seller has taken all reasonable steps to
safeguard and maintain the secrecy and confidentiality of all trade
secrets and proprietary or confidential business and technical
information included in the Intellectual Property Rights, including,
without limitation, entering into appropriate confidentiality or
disclosure agreements with all employees, officers, directors,
consultants, independent contractors and licensees that serve the Seller,
the forms of which have been delivered to the Buyer.
(vii) All documents and materials containing trade secrets
or proprietary or confidential business or technical information of the
Seller are presently and as of the Closing Date will be located at either
the Concord Facility or the offices of ZAO AMI in St. Petersburg, Russia
(the "St. Petersburg Facility"), and have not been used, divulged, or
appropriated for the benefit of any person or corporate entity other than
Seller or ZAO AMI, or to the detriment of the Seller.
(viii) To the Seller's knowledge, no third party is
infringing on any Intellectual Property Right in a manner that could
materially limit the protection afforded by the Intellectual Property
Rights.
(ix) The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
will not breach, violate or conflict with any material instrument or
material agreement governing any Intellectual Property Right, will not
cause the forfeiture or termination or give rise to a right of forfeiture
or termination of any material Intellectual Property Right or in any way
materially impair the right of the Seller to use, sell, license or
dispose of or bring any action for the infringement of, any Intangible
Assets.
Section 2.15 MACHINERY AND EQUIPMENT. Part 1 of Schedule 1.1 attached
hereto contains an accurate and complete list, by categories, of all equipment
and machinery related to the Purchased Assets. Each of the machinery and
equipment listed on Part 1 of Schedule 1.1 is in good operating and usable
condition and repair, subject to reasonable wear and tear, and is fit for its
intended use. The machinery and equipment listed on Part 1 of Schedule 1.1
attached hereto together constitute all the machinery and equipment necessary
for the operation of the Purchased Assets.
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Section 2.16 BROKERS. No broker, finder or other third party has any
right to a commission or other fee as the result of action by or on behalf of
any of the Sellers in connection with this Agreement.
Section 2.17 CONFLICTING INSTRUMENTS. The execution and delivery by
the Seller of this Agreement and the other Transaction Documents do not, and the
consummation of the transactions contemplated hereby and thereby will not,
result in the creation of any lien, charge, security interest or encumbrance
upon any of the Purchased Assets under, conflict with or result in a breach of,
create an event of default (or event that, with the giving of notice or lapse of
time or both, would constitute an event of default) under, or give any third
party the right to accelerate any obligation under, any permit, agreement,
mortgage, license, lease, indenture, instrument, order, arbitration award,
judgment or decree to which the Seller is a party or by which the Seller or the
Purchased Assets are bound or affected.
Section 2.18 LEASES. The Leases listed on Part 2 of Schedule 1.1
attached hereto are valid and existing leases and are in full force and effect.
All rent due under each such lease has been paid. In the case of each such
Lease, the Seller has been in quiet enjoyment (or remedied any claims relating
thereto) of the real property covered thereby since the commencement of the
original terms of such Leases. The Seller is not, and no other party is, in
material breach under the terms and conditions of any of the Leases, nor has any
event of default on the part of the Seller or on the part of any other party
thereto occurred under any of the Leases, and no condition or event has occurred
with respect to the Seller or with respect to any other party that, with the
giving of notice or lapse of time or both, would constitute such breach or event
of default. Except as set forth on Schedule 2.18 attached hereto, no waiver,
indulgence or postponement (i) of obligations of the Seller under any such Lease
has been granted by the lessor, or (ii) of the lessor's obligations thereunder
has been granted by the Seller. The Seller has full right and power to occupy or
possess, as the case may be, all of the real property covered by such Leases.
The Seller has full right and power, without the need to obtain the consent of
the lessor under such Leases or otherwise, or prior to the Closing will have
obtained such consent, to assign and transfer such Leases to the Buyer.
Section 2.19 Environmental Matters.
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(a) The Seller has not and to the best of Seller's knowledge no
previous owner or user of any real property located in the United States leased
by the Seller pursuant to the Leases (the "Real Property"), has engaged in or
permitted any activity upon any Real Property in any way involving any Hazardous
Materials (as defined in Schedule 2.19) on, under, in or abutting any Real
Property or transported any Hazardous Materials to, from or across any Real
Property, except as set forth on Schedule 2.19 hereto. Except as set forth on
Schedule 2.19 hereto, no Hazardous Materials currently are produced,
constructed, deposited, stored or otherwise located on, under, in or about any
Real Property.
(b) To the best of Seller's knowledge, no Hazardous Materials
have migrated from any Real Property to other properties, and no Hazardous
Materials have migrated or threatened to migrate from other properties to any
Real Property.
(c) To the best of Seller's knowledge, no asbestos in any form
that has become or threatens to become friable is located on any Real Property.
(d) To the best of Seller's knowledge, except as set forth on
Schedule 2.20 hereto, no underground improvement, including without limitation,
treatment or storage tank or water, gas or oil well, is or ever has been located
on any Real Property.
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(e) To the best of Seller's knowledge, no polychlorinated
biphenyls (PCBs) or any equipment that contains PCBs or insulating material
containing urea formaldehyde is located on any Real Property.
(f) To the best of Seller's knowledge, all Real Property and
all current and past activities thereon, currently comply and at all times in
the past have complied in all material respects with all Environmental
Requirements (as defined in Schedule 2.19).
(g) Neither the Seller nor to the best of Seller's knowledge,
any current or prior owner or occupant of any Real Property, has received any
notice or other communication concerning or has any knowledge of (i) any
violation of Environmental Requirements, or (ii) any alleged liability for
environmental damages in connection with any Real Property. No writ, injunction,
decree, order or judgment relating to the foregoing is outstanding. To the best
of Seller's knowledge, there is no lawsuit, claim, proceeding, citation,
directive, summons or investigation pending or threatened relating to the
ownership, use, maintenance or operation of any Real Property by the Seller, or
relating to any alleged violation of any applicable Environmental Requirements
or the presence of any Hazardous Material thereon.
Section 2.20 FURNITURE AND FIXTURES; MISCELLANEOUS ASSETS. The
furniture and fixtures and the Miscellaneous Assets listed on Schedule 1.1
hereto are in good operating and usable condition and repair, subject to normal
wear and tear, and are fit for their intended use.
Section 2.21 WARRANTIES. Schedule 2.21 attached hereto contains an
accurate and complete list of the forms of warranties and guaranties which have
been used by the Seller in the operation of the Purchased Assets. There are no
pending or threatened claims regarding any warranties or guaranties relating to
the Purchased Assets.
Section 2.22 INFORMATION ACCURATE AND COMPLETE. Without limiting the
specific language of any other representation or warranty in this Agreement, all
information furnished or to be furnished by the Seller to the Buyer pursuant to
this Agreement, in exhibits or schedules attached hereto, or otherwise delivered
or to be delivered by the Seller to the Buyer, taken as a whole, is or will be
accurate and complete in all material respects, includes or will include all
material facts required to be stated therein and does not or will not contain
any untrue statement of a material fact or omit any material fact necessary to
make the statements therein not misleading in light of the circumstances in
which they were made.
Section 2.23 SEC REPORTS. Except for those matters which, in the
aggregate, would not result in a material adverse effect on the Seller's
business, properties, prospects, condition (financial or otherwise) or results
of operations, (a) since March 31, 1994, Seller has filed all forms, reports and
documents with the Securities and Exchange Commission (the "SEC") required to be
filed by it pursuant to the federal securities laws and the rules and
regulations promulgated thereunder (such required forms, reports and documents,
together with all other forms, reports and documents filed with the SEC since
March 31, 1994, the "Seller SEC Reports"), all of which have complied as of
their respective filing dates, or in the case of registration statements, their
respective effective dates, in all material respects with all applicable
requirements of the Securities Act of 1933, as amended, and the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder, and (b) none of such Seller SEC Reports, including, without
limitation, any exhibits, financial statements or schedules included therein, at
the time filed, or in the case of registration statements, their respective
effective dates, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they were
made, not misleading.
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ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF THE BUYER
The Buyer represents and warrants to the Seller as follows:
Section 3.1 ORGANIZATION AND AUTHORITY. The Buyer is duly incorporated
and organized and is validly existing as a corporation under the laws of the
State of California. The Buyer has the corporate power and authority to enter
into this Agreement and the other Transaction Documents and to consummate the
transactions contemplated hereby and thereby.
Section 3.2 DUE AUTHORIZATION. This Agreement, the other Transaction
Documents to which the Buyer is a party and all agreements and instruments to be
delivered by the Buyer pursuant hereto, have been (or upon delivery will have
been) duly authorized by all necessary corporate and other action, executed and
delivered on behalf of the Buyer and constitute (or upon delivery will
constitute) legal, valid and binding obligations of the Buyer, enforceable in
accordance with their respective terms, except as enforceability may be limited
by bankruptcy, insolvency, reorganization or other laws affecting the
enforcement of creditors' rights generally, and except with respect to judicial
limitations on equitable remedies.
Section 3.3 BROKERS. No broker, finder or other third party has any
right to a commission or other fee as the result of action by or on behalf of
the Buyer in connection with this Agreement.
Section 3.4 Consents. No consent, waiver or approval of, or notice to,
any third party is required or necessary to be obtained by Buyer in connection
with the execution and delivery of this Agreement and the performance of Buyer's
obligations hereunder.
Section 3.5 LITIGATION. There is no action or proceeding or to the
knowledge of Buyer, threatened, challenging the transaction contemplated by this
agreement or seeking to restrain, prevent or change the transactions
contemplated hereby.
Section 3.6 NO VIOLATION OR APPROVAL. The execution, delivery and
performance of this Agreement and the other Transaction Documents and the
consummation of the transactions contemplated hereby and thereby will not result
in a breach or violation of, or a default under, Buyer's Articles of
Incorporation or bylaws, any statute applicable to it, any agreement to which it
is a party or by which it or any of its properties are bound, any fiduciary duty
or any order, judgment, decree, rule or regulation of any court or any
governmental agency or body having jurisdiction over it or its properties. No
consent, approval, order, or authorization of, or negotiation, declaration or
filing with, any governmental authority or other entity is required of it in
connection with the execution and delivery of this Agreement and the other
Transaction Documents or the consummation of the transactions contemplated
hereby and thereby.
ARTICLE IV.
EMPLOYEES AND CONSULTANTS
Section 4.1 HIRING OF XX. XXXXXXX. The Buyer shall offer,
conditioned on the Closing, to Xxxx Xxxxxxx ("Xx. Xxxxxxx") an employment
contract in the form attached hereto as Exhibit A (the "Employment Contract").
In exchange for his employment by Buyer, Xx. Xxxxxxx shall enter into a
Covenant Not To Compete and a Proprietary Information Agreement in the forms
attached hereto as Exhibits B and C respectively. The Employment Contract, the
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Covenant Not To Compete and the Proprietary Information Agreement will be
referred to collectively hereafter as "The Employment Contracts."
Section 4.2 THE BUYER'S OBLIGATIONS. Effective as of the Closing Date
and upon Xx. Xxxxxxx'x execution and delivery of the Employment Contracts, Xx.
Xxxxxxx shall be an employee of the Buyer for all purposes and the Buyer shall
be responsible for all salary, bonus, vacation and other employment obligations
with respect to Xx. Xxxxxxx, as set forth in the Employment Contract; and the
Seller shall have no further obligations with respect to Xx. Xxxxxxx, except to
the extent any such obligations arose prior to the Closing Date and those
continuing obligations related to his role as Seller's Chairman of its Board of
Directors.
Section 4.3 PROFESSIONAL SERVICES AGREEMENT FOR XXXXX XXXXXXXXX, XXXXX
XXXXXX, AND XXXXXXX XXXXXXXXXX. The Seller shall enter into, conditioned on the
Closing, a consulting services contract in the form attached hereto as Exhibit E
(the "Professional Services Agreement") for the services of Xxxxx Xxxxxxxxx,
Xxxxx Xxxxxx and Xxxxxxx Xxxxxxxxxx.
Section 4.4 The Buyer's Obligations. Effective as of the Closing Date
and upon execution and delivery of the Professional Services Agreements by
Seller, Xxxxx Xxxxxxxxx, Xxxxx Xxxxxx and Xxxxxxx Xxxxxxxxxx shall each become a
consultant of the Buyer for those purposes and upon those conditions set forth
in therein.
Section 4.5 EMPLOYMENT OF OTHER EMPLOYEES. The Buyer will offer,
conditioned upon the Closing, employment to the nine (9) individuals listed on
Parts 2 and 3 of Schedule 1.3 hereto at the same salary and as they currently
enjoy. Such employment will be subject to Buyer's receipt of acceptance of its
employment offer by each of the named individuals. The terms of employment will
be specified in the offer letters and these individuals will be eligible to
participate in all benefit plans of Buyer on the same terms and conditions as
all other similarly situated employees of Buyer.
Section 4.6 OTHER EMPLOYEES OF SELLER. Other than those individuals
listed on Parts 2 and 3 of Schedule 1.2 hereto, Buyer will be under no
obligation to offer employment to any other employees currently employed by
Seller. It shall be the obligation of Buyer to pay the costs attendent to and
required by severance arrangements for Xxxx Xxxxxxxxx and Xxxxx Xxxxxx as more
particularly described on Part 4 of Schedule 1.3 hereto if Seller will not
continue to employ them after the Closing.
ARTICLE V.
OTHER COVENANTS OF THE SELLER AND THE BUYER
Section 5.1 COVENANT NOT TO COMPETE. The Seller agrees that, for the
period ending three (3) years after the Closing it shall not, either directly or
indirectly, without the prior written consent of the Buyer, engage in any
business which is competitive with the portion of the business of Buyer
represented by the Purchased Assets, including without limitation any business
that distributes, develops or markets multimedia consumer computer software for
the entertainment or children's education market anywhere in the world,
including without limitation the Commonwealth of Massachusetts and the State of
California. The Seller further agrees that upon any breach of the covenant
contained in this Section 5.1, the Buyer shall be entitled to injunctive relief,
both PENDENTE lite and permanently, since the remedy at law would be inadequate
and insufficient. In addition, the Buyer shall be entitled to such damages as it
can show it has sustained by reason of such breach. From and after the Closing
Date, the Seller hereby agrees not to use the name "Animation Magic" or any
variant thereof. It is agreed and understood by both Buyer and Seller that it
shall not be deemed a breach of this provision for the Seller to engage in the
Seller's software development business including the supply chain management
business, but excluding the multimedia software development described herein or
to
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continue to distribute its existing and partially completed library of
entertainment and educational multimedia software titles listed on Part 5 of
Schedule 1.2 hereto or to license or sell the software engines listed on Part 4
of Schedule 1.2 hereto, except that Seller shall be required to offer to Buyer
the first right of refusal to any sales arrangement it wishes to enter into with
respect to any modified, updated or new version of the software engines for a
period to coincide with this Covenant Not To Compete provided that the Buyer
shall be obligated to elect to purchase such software engines within ten (10)
days of any offer from the Seller. The failure to respond within such ten day
period of time shall conclusively be deemed an election by the Buyer not to
purchase such software engines.
Section 5.2 BROKERS, ADVISORS AND OTHER REPRESENTATIVES. With respect
to the negotiation and consummation of the transactions described herein, the
Seller and the Buyer each shall be responsible for payment of its own brokers,
advisors and representatives.
Section 5.3 POST-CLOSING ACCESS TO RECORDS. At the Closing, the Buyer
shall take possession of the business records of the Seller related to the
Purchased Assets and Assumed Liabilities. Any such business records not present
on the Real Property subject to the Leases shall be delivered to the Buyer on or
before the Closing. Such business records shall be stored on the Real Property,
and the Seller shall be provided reasonable access to such business records. At
the Seller's option, such business records that do not pertain or relate to the
Purchased Assets or Assumed Liabilities may be removed by the Seller; provided,
that the Buyer shall have reasonable access to such removed records for a period
of seven (7) years from the date hereof should the Buyer need to refer to such
records to answer tax related inquiries or claims.
Section 5.4 CONFIDENTIALITY. The Buyer and the Seller, and their
respective agents, if any, will respectively keep confidential all information
and documents obtained from the other until the Closing pursuant to that
Confidentiality Agreement dated February 28, 1997 ("Confidentiality Agreement")
and in the event the Closing does not occur will promptly return such documents
and will not use such information for its own advantage pursuant to the
Confidentiality Agreement.
Section 5.5 MODIFICATION OF THE BLIZZARD DEVELOPMENT AGREEMENT. If,
but only if, this Agreement is consummated, the Buyer and the Seller will enter
into a modification of the Blizzard Development Agreement in the form of an
amendment dated as of the Closing which is attached hereto as Exhibit D and made
a part hereof (the "Blizzard Amendment").
Section 5.6 USE BY SELLER OF CONCORD FACILITY POST-CLOSING. For a
period not to exceed nine (9) months from the date of the Closing, Seller will
utilize office space in the Concord Facility for the benefit of three (3)
employees listed on Part 8 of Schedule 1.2 hereto. They will be entitled to the
benefit of the computer network, phone system and all other systems and
facilities in the Concord Facility as are reasonably necessary for them to
perform their duties to Seller, subject to the requirements of Buyer. Seller
agrees to pay Buyer the sum of $2,096.67 on a monthly basis as full and complete
consideration for the use of the premises as contemplated herein.
Section 5.7 USE BY SELLER OF PURCHASED ASSETS POST-CLOSING. Following
the Closing, at the request of the Seller, the Buyer agrees to provide the
Seller with sufficient personnel and equipment for completion of development
work for Seller's existing multimedia titles, including without limitation, the
sound effects for "Xxxxx Goes to Camp", "The Magic Acorns", and "The Pearls of
Wisdom" which at the time of Closing will only be partially completed. Such
services and equipment shall be provided in a timely manner in accordance with
Buyer's standard practices and the Seller shall reimburse the Buyer in full for
the direct costs associated with providing such equipment and services.
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Section 5.8 POST-CLOSING REGISTRATION OF THE ZAO AMI SHARES. Seller
will diligently assist Buyer to register the ZAO AMI Shares in Buyer's name
promptly after the Closing. In the event that it is determined by any agency
which has authority from a local ofr federal government office or body,
governing body, government entity or otherwise that previous registrations of
the ZAO AMI Shares were improperly effected or omitted entirely by Seller or any
of its predecessors in interest in the ZAO AMI Shares, Buyer shall immediately
notify Seller who shall be afforded a reasonable opportunity to cure any defect
or omission at its sole cost and expense. In the event Seller's efforts to cure,
are unsuccessful or Seller does not act promptly, and such acts or omissions,
threaten Buyer's perfect title to or rights under the ZAO AMI Shares in
accordance with the local or Federal law of the Russian Federation, Buyer will
take steps on its own to rectify the situation and any costs necessary to be
expended by Buyer, including costs, fees, taxes, fines and reasonable attorneys
fees related thereto shall be borne by Seller.
ARTICLE VI.
CLOSING
Section 6.1 CLOSING DATE. The transfer of the Purchased Assets by the
Seller to the Buyer, and all other transactions contemplated by this Agreement
and the other Transaction Documents (the "Closing") shall take place at the
offices of Xxxxxx, Xxxx & Xxxxxxxx, 000 Xxxxx Xxxxx Xxx. Xxx Xxxxxxx, XX 00000,
at 9:00 a.m. on April 16, 1997 (the "Closing Date") or such other mutually
agreeable date as the parties agree to in writing.
Section 6.2 CONDITIONS TO CLOSING. Notwithstanding any provision of
the Agreement to the contrary, neither party shall be required to execute or
deliver this Agreement, or any other agreement contemplated herein:
(a) if a statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or enforced
by any United States or Russian court, or United States or Russian governmental
authority which prohibits, restrains, enjoins or rejects the execution of this
Agreement;
(b) unless the representations and warranties of the other
party contained in this Agreement or in any other document delivered pursuant
hereto shall be true and correct in all material respects at and as of the
Closing, and at the Closing, each shall deliver to the other a certificate to
that effect; and
(c) unless each of the obligations of the other party to be
performed at or before the Closing pursuant to the terms of this Agreement shall
have been duly performed in all material respects at or before Closing and at
the Closing, each shall deliver to the other a certificate to that effect.
Section 6.3 DELIVERIES BY SELLER. Simultaneously with the execution
and delivery of this Agreement, Seller is delivering or causing to be delivered
to Buyer, the following:
(a) a duly executed xxxx of sale in the form of Exhibit H
attached hereto ("Xxxx of Sale");
(b) a duly executed assignment of the Contracts and Leases in
the form of Exhibit F attached hereto ("Assignment and Assumption Agreement");
(c) Certified board of directors' resolution authorizing the
Agreement;
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(d) a duly executed Professional Services Agreement in the form
of Exhibit E;
(e) Secretary's certificate to the effect:(i) that all
representations of Seller contained in this Agreement or in any other document
delivered pursuant hereto shall be true and correct in all material respects at
and as of the Closing; (ii) each of the obligations of Seller to be performed at
or before the Closing pursuant to the terms of this Agreement shall have been
duly performed in all material respects at or before the Closing; and (iii)
there shall have been no events, changes or effects with respect to Seller
having or which could reasonably be expected to have a material adverse effect
on Seller
(f) a duly executed amendment to the Blizzard Amendment in the
form of Exhibit D;
(g) a reasoned opinion of Seller's counsel that no shareholder
vote is required under Section 271 of the Delaware General Corporation Law in
order to consummate this transaction;
(h) possession and enjoyment of the Purchased Assets;
(i) a duly executed assignment and release of the lease for the
Concord Facility in the form of Exhibit I, attached hereto;
(j) proof of mailing of the consent letters required to assign
Seller's rights in all Third Party Software in possession of Seller related to
the Purchased Assets;
(k) a duly executed assignment of all of Seller's rights in all
Third Party Software in its possession related to the Purchased Assets in the
form of Exhibit J, attached hereto;
(l) a resolution of the Board of Directors to terminate the
current employment and non-compete agreements with Xxxx Xxxxxxx;
(m) Certification of the President that Seller's employees who
will be employed by Buyer including Xxxx Xxxxxxx will be allowed to communicate
proprietary and confidential information belonging to Seller and/or third
parties related to the Purchased Assets to Buyer under Seller's employee
confidentiality agreements;
(n) An original Stock Certificate for ZAO AMI accompanied by a
stock power duly executed in blank in the form of Exhibit K attached hereto;
(o) a duly executed Engine License in the form of Exhibit G;
and
(p) such other duly executed instruments reasonably
satisfactory to the Buyer (but which shall not affect the representations and
warranties of either party contained herein) as shall be necessary and effective
to transfer and convey to and vest in the Buyer title to the tangible property
and to transfer and convey to the Buyer the Seller's interest in all other
property included in the Purchased Assets.
Section 6.4 DELIVERIES BY BUYER. Simultaneously with the execution and
delivery of this Agreement, Buyer is delivering or causing to be delivered to
Seller the following:
(a) a counter-executed Xxxx of Sale;
(b) a counter-executed Assignment and Assumption Agreement;
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(c) the Purchase Price;
(d) the amounts due under the Blizzard Amendment;
(e) a counter-executed Blizzard Amendment;
(f) a Certified resolution of its Board of Directors
certifying: (i) that all representations of Buyer contained in this Agreement or
in any other document delivered pursuant hereto shall be true and correct in all
material respects at and as of the Closing and (ii) each of the obligations of
Buyer to be performed at or before the Closing pursuant to the terms of this
Agreement shall have been duly performed in all material respects at or before
the Closing;
(g) a counter-executed consent and assignment of the lease for
the Concord Facility; and
(h) a counter-executed Engine License;
(i) the amounts due Seller in a Closing adjustments list agreed
upon by the parties.
Section 6.5 SUBSEQUENT DELIVERIES. The Seller will execute,
acknowledge and deliver any further assignments, conveyances, and other
assurances, documents, and instruments of transfer, reasonably requested by the
Buyer, and will take any other action consistent with the terms of this
Agreement that may reasonably be requested for the purpose of assigning,
transferring, conveying, and confirming to the Buyer, or reducing to possession,
any or all property to be conveyed and transferred by this Agreement. If
requested by the Buyer, and without limiting the obligations of the Seller under
Section 10.1 hereof, the Seller further agrees to prosecute or otherwise enforce
in its own name for the benefit of the Buyer, and at Buyer's expense, any
claims, rights, or benefits that are transferred to the Buyer by this Agreement
and that require prosecution or enforcement in the Buyer's name.
ARTICLE VII.
INDEMNIFICATION
Section 7.1. INDEMNIFICATION BY THE SELLER. Subject to the Threshold
set forth in Section 7.3, the Seller shall indemnify and hold harmless the
Buyer, its parent and affiliated companies and their respective officers,
directors, agents, representatives and attorneys (individually, the "Buyer
Party" and collectively, the "Buyer Parties") in respect of any and all claims,
losses, damages, liabilities and expenses (including, without limitation,
settlement costs and any legal or other expenses for investigating or defending
any actions or threatened actions), reasonably incurred by a Buyer Party in
connection with each and all of the following (collectively, "Buyer's Damages"):
(a) Any breach of any representation or warranty of the Seller
contained in this Agreement, the other Transaction Documents or any other
instrument required to be delivered at the Closing;
(b) Any breach of any covenant, agreement or obligation of the
Seller contained in this Agreement, the Transaction Documents or any other
instrument contemplated by this Agreement;
(c) Any claims, losses, or damages arising out of or resulting
from the failure of the Buyer or the Seller to comply with the Massachusetts
Bulk Sales Act, or the failure of the Buyer or the Seller to comply with or
perform any actions in connection with, preparation
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for, or incident to the transactions provided for in this Agreement which might
be required under the terms and provisions of any Bulk Sales Act or similar law
of any applicable state or jurisdiction other than the Commonwealth of
Massachusetts or which may be asserted to be applicable; and
(d) Any claims, losses, damages, fines or penalties arising
from a determination by any governmental agency or body that the Seller (i) was
required to have, and, prior to the Closing, did not have, any federal, state,
local or municipal permit, license or governmental authorization, or (ii) prior
to the Closing, failed to be in compliance with any law, decree, order or
regulation.
(e) Any claims, losses, damages, fines or penalties arising
from a determination by any court that the Seller was required to have, and,
prior to the Closing, did not have the requisite authority under the Delaware
Corporation Law to consent to consummating the Purchase Agreement including
without limitation failure to obtain the necessary consent of its shareholders.
Section 7.2 LIMITATION OF LIABILITY. A Buyer Party's right to
indemnification under this Article VII shall be the exclusive remedy for any of
Buyer's Damages or any other claim hereunder. Buyer shall not be permitted to
enforce any claim for indemnification which is less than $2,000 in value until
the aggregate of all individual claims for indemnification exceeds the amount of
$25,000.00 (the "Threshold"). Once claims in excess of the Threshold have been
asserted by the Buyer Parties , all claims, including those below the Threshold
amount, may be pursued by the parties asserting such claims except as otherwise
limited by this Agreement.
Section 7.3 MAXIMUM INDEMNIFICATION. Soley as it relates to Buyer's
Damages arising out of a breach of Seller's representations and warranties,
excluding those contained in Sections 2.2,2.9 and 5.8 above, the maximum
indemnification to be paid by the Seller hereunder, shall be limited to
$2,500,000.00.
Section 7.4 CLAIMS FOR INDEMNIFICATION. Claims for indemnification
made under this Agreement for which there is a maximum as specified in Section
7.3 above may be made only during the period from the Closing Date until the
date which is two (2) years after the Closing Date. Whenever any claim shall
arise for indemnification, the Buyer shall notify Seller of the claim pursuant
to Section 7.7 hereunder and, when known, the facts constituting the basis for
such claim and the amount or an estimate of the amount of the liability arising
from such claim. Claims for indemnification are subject to the Threshold as
defined in Section 7.2 above and the maximum amount set forth in Section 7.3.
Buyer shall not settle or compromise any claim by a third party which is
entitled to indemnification hereunder without the prior written consent of
Seller unless (i) suit shall have been instituted against Buyer and (ii) Seller
shall not have taken control of such suit within sixty (60) days after
notification thereof as provided in Section 7.6.
Section 7.5 DEFENSE OF THE CLAIMS. In connection with any claim giving
rise to indemnity hereunder resulting from or arising out of any claim or legal
proceeding by a person other than the Buyer or the Seller, the indemnifying
party, at its sole cost and expense, upon written notice to the party seeking
indemnification, may assume the defense of any such claim or legal proceeding
without prejudice to the right of the indemnifying party thereafter to contest
its obligation to indemnify the party seeking indemnification in respect of the
claims asserted therein. If the indemnifying party assumes the defense of any
such claim or legal proceeding, the indemnifying party shall select counsel to
conduct the defense of such claims or legal proceedings and at its sole cost and
expense shall take all steps necessary in the defense or settlement thereof. The
indemnifying party shall not consent to a settlement of, or the entry of any
judgment arising from, any such claim or legal proceeding, without the prior
written consent of the party seeking indemnification, unless the indemnifying
party admits in writing its liability
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to hold the party seeking indemnification harmless from and against any and all
losses, damages, expenses and liabilities arising out of such settlement and
concurrently with such settlement the indemnifying party pays into court the
full amount of all losses, damages, expenses and liabilities to be paid by the
indemnifying party in connection with such settlement. The party seeking
indemnification shall be entitled to participate in (but not control) the
defense of any such action, with its own counsel and at its own expense. The
indemnifying party shall be entitled to participate in the defense of any action
by the party seeking indemnification, which participation shall be limited to
contributing information to the defense and being advised of its status. If the
indemnifying party does not assume the defense of any such claim or litigation
resulting therefrom in accordance with the terms hereof, the party seeking
indemnification may defend against such claim or litigation in such manner as it
may deem appropriate, including without limitation settling such claim or
litigation, after giving notice of the same to the indemnifying party, on such
terms as the party seeking indemnification may deem appropriate.
Section 7.6 NOTICE. The Buyer and the Seller agree that in the event
of any occurrence which may give rise to a claim of indemnification hereunder,
the party seeking indemnification will give notice thereof to the parties in
accordance with Section 10.6 within the later of thirty (30) days of such
occurrence, or five (5) days after the party seeking indemnification discovers
such occurrence.
Section 7.7 WAIVER. The Buyer and the Seller agree that they will not
waive any statute of limitations or defense that would increase the liability of
any of the parties hereto without the written consent of such parties.
Section 7.8 MATERIALITY. The parties agree that for all purposes of
this Agreement, unless specifically stated to the contrary, the dollar amounts
set forth in various provisions hereof, other than the Purchase Price, shall not
affect or determine the meaning of the term "material" or have any bearing
thereon.
Section 7.9 SURVIVAL. The covenants, agreements, warranties and
representations entered into or made pursuant to this Agreement, the other
Transaction Documents and any other document, list, exhibit or instruments
furnished in connection herewith or therewith shall be continuing and shall
survive the Closing for a period co-extensive with the statute of limitations
applicable to any action or claim in accordance with the Governing Law specified
herein except for those representations and warranties that are limited in time
as specified in Section 7.4
ARTICLE VIII.
BINDING EFFECT
This Agreement shall be binding on the parties and inure to the benefit
of the Seller, the Buyer, and their respective legal representatives, successors
and assigns. This Agreement shall not be assigned or modified, and no duties or
responsibilities hereunder shall be delegated, by any party hereto without the
express written consent of the other parties and any such purported delegation
or assignment or modification without the written consent of the parties hereto
shall be null and void.
ARTICLE IX.
GOVERNING LAW
This Agreement, any Exhibits and Schedules hereto and any referenced
attachments, shall constitute the entire understanding between the parties and
supersede any previous communications, representations or agreements, whether
oral or written. This
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Agreement shall be governed by and construed in accordance with the laws of the
State of Delaware.
ARTICLE X.
GENERAL
Section 10.1 FURTHER ASSURANCES. The parties hereto agree to do such
further acts and to execute and deliver such additional agreements and
instruments as may be required to consummate, evidence or confirm the
transactions and agreements contained in this Agreement.
Section 10.2 SEVERABILITY. In the event any provision of this
Agreement shall be held to be void, violable or unenforceable, the remaining
provisions shall remain in full force and effect.
Section 10.3 INTERPRETATION. The headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
Section 10.4 EXPENSES. Each of the parties shall pay all costs and
expenses, including legal fees, incurred by it in negotiating and preparing this
Agreement, and in closing and carrying out the transactions contemplated hereby.
Section 10.5 COUNTERPARTS. This Agreement may be executed in one or
more counterparts, each of which when executed and delivered shall be an
original, and all of which when executed shall constitute one and the same
instrument.
Section 10.6 NOTICES. All notices, requests, demands, consents,
approvals and other communications required or permitted to be given hereunder
("Notices") shall be in writing and shall be deemed given if delivered
personally, sent by courier, sent by telecopy, or mailed by certified or
registered mail, postage prepaid, return receipt requested, addressed as
follows:
If to the Buyer, addressed to:
Xxxxxxxxxxx XxXxxx
Chief Executive Officer
Davidson & Associates, Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
with a copy to:
Xxxxx X. Xxxxx, Esq.
Secretary and Vice President
Davidson & Associates, Inc.
00000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
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If to the Seller, addressed to:
Xxxx Xxxxxxxxx
President
Capitol Multimedia, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, XX 00000
or such other addresses as the parties specify by written notice pursuant
hereto. Notice shall be deemed given on the date of service if personally
served, sent by same-day courier or sent by telecopy. Notice sent by overnight
courier shall be deemed given on the date delivered. Notice mailed as provided
herein shall be deemed given on the third business day following the date of
mailing.
Section 10.7 EXHIBITS AND SCHEDULES. Each of the Exhibits and
Schedules hereto are incorporated herein and made a part hereof by this
reference.
Section 10.8 NO WAIVER. No breach of any covenant, agreement,
warranty or representation shall be deemed waived unless expressly waived in
writing by the party which is entitled to assert such breach. No waiver of any
right hereunder shall operate as a waiver of any other right or of the same or
a similar right on another occasion.
Section 10.9 PRESUMPTIONS. Because the parties hereto have
participated in drafting this Agreement, there shall be no presumption against
any party on the ground that such party was responsible for preparing this
Agreement or any part of it.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
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Section 10.10 CONFLICTS BETWEEN AGREEMENTS. Except as specifically
provided herein, in the event that any provisions of this Agreement conflict
with any provisions of any other Transaction Document, the provisions of this
Agreement shall take precedence over such other provisions.
IN WITNESS WHEREOF, this Agreement is hereby executed by a duly
authorized representative of each party as of the date first written above.
CAPITOL MULTIMEDIA, INC. DAVIDSON & ASSOCIATES, INC.
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxx
---------------------- --------------------------
Xxxx Xxxxxxx Xxxxxxxx X. Xxxxx
Title: Chairman and CEO Title: President
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EXHIBIT A
---------
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Employment Agreement") is made and
entered into as of the 28 day of April, 1997, by and between (1) Davidson &
Associates, Inc., a California corporation ("Employer"), and (ii) Xxxx Xxxxxxx,
an individual ("Employee"), with reference to the following facts:
RECITALS
A. Employer has agreed to engage Employee as a full-time employee of
Employer and Employee has agreed to such engagement.
B. Employer and Employee desire to set forth in writing in this
Employment Agreement all of their understandings and agreements concerning
Employee's employment.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
set forth herein, the parties hereto agree as follows:
1. Employment; Term of Employment
------------------------------
Employee has agreed to be employed by Employer, and Employer has agreed
to employ Employee, for a term commencing as of the date of this Employment
Agreement and continuing for a period of two (2) years, expiring on April 28,
1999, unless sooner terminated pursuant to Section 4 hereof (the "Employment
Term"). If Employee continues as an Employee after the Employment Term, such
employment shall be deemed an employment at will unless Employer and Employee
enter into a written extension of this Employment Agreement or a new written
employment agreement. For purposes hereof, the Employment Term shall not include
any period of employment after April 28, 1999.
2. Title and Duties
----------------
2.1 TITLE. Employee shall have the title and serve in the capacity of
Vice President of CUC Software and President of Animation Magic and, in such
capacity, shall be subject to the control and direction of the Board of
Directors of Employer and the management of CUC Software, an operating unit of
CUC International Inc., consisting of Employer, Sierra On-Line, Inc., and
Knowledge Adventure, Inc.
2.2 AUTHORITY; DUTIES. Employee's primary duties and responsibilities
hereunder shall be to perform all reasonable duties customarily performed by a
Vice President of an operating unit as may be prescribed by the Board of
Directors and the management of CUC Software. Employee hereby agrees to perform
such duties and
30
satisfy such responsibilities throughout the Employment Term and thereafter so
long as he is employed by Employer.
2.3 PERFORMANCE BY EMPLOYEE. During the Employment Term and thereafter
so long as employed by Employer, Employee shall devote his full time and efforts
to the performance of his duties hereunder and serve Employer diligently and to
the best of his abilities. Notwithstanding the foregoing however Employer agrees
and understands that Employee will be required to perform responsibilities in
his capacity as Chairman of Capitol Multimedia, Inc., for no more than five(5)
hours a week during the Employment Term. During the Employment Term Employee
shall be located in Massachusetts absent necessary business travel and without
Employee's consent Employer will not be entitled to re-locate Employee during
the term of this Employment Agreement.
3. Compensation.
------------
3.1 BASE SALARY. Employer hereby agrees to pay Employee, on a
semi-monthly basis, a base salary of one hundred eighty thousand dollars
($180,000) for the first year of the Employment Term (the "Base Salary").
Thereafter, Employee shall be reviewed on a once a year basis. Any compensation
changes shall be in accordance with Employer's established guidelines for
employees of a similar rank. In no event shall any subsequent yearly
compensation during the Employment Term be any less than the Base Salary.
3.2 FRINGE BENEFITS AND VACATION. During the Employment Term, Employee
shall be entitled to (i) four (4) weeks paid annual vacation, (ii) a fully paid
medical plan, (iii) disability insurance, (iv) a term life insurance policy on
Employee's life with a face amount of five hundred thousand dollars ($500,000)
fully paid by Employer, and (v) other fringe benefits in accordance with
Employer's policies as they may exist from time to time for similarly situated
employees. Employee shall be entitled to schedule or take vacation time subject
to the requirements of the business. Employee shall not be eligible for any
other compensation, stock or bonus plan, unless specifically agreed to in
writing by the Chief Executive Officer of CUC Software.
3.3 EXPENSES. In addition to all other compensation provided
hereunder, Employee shall be entitled to reimbursement for all reasonable and
necessary travel and other expenses incurred in the performance of his duties
hereunder, all in accordance with Employer's standard policies and procedures as
they may exist from time to time. All claims for expenses shall be reasonable
and documented in accordance with Employer's standard policies and procedures
with respect thereto.
3.4 BONUS OR OPTION PLANS. At the end of each full year of the
Employment Term, Employee shall be entitled to a cash bonus of up to forty
percent (40%) of his Base Salary for that year, dependent on the achievement of
specific written performance goals for the business unit for which Employee is
responsible which will be agreed upon by Employee and Employer at the beginning
of each such year or upon employment of Employee. Employer is part of a stock
option plan adopted by its parent company CUC
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International Inc. ("CUC") (the "CUC Stock Option Plan"). Employee shall be
entitled to participate in the CUC Stock Option Plan on the same terms and
conditions applicable to other similarly situated executives of Employer, it
being understood and agreed that over the Employment Term, Employee will be
granted options on thirty thousand (30,000) shares of common stock of CUC, which
shall vest in accordance with the terms of the CUC Stock Option Plan over a
period of five (5) years of employment. The grant of options under the CUC Stock
Option Plan will be made pursuant to a resolution of the Stock Option Committee
of CUC's Board of Directors. Except as specifically set forth above, nothing
herein shall obligate Employer to pay Employee any bonus or to grant any options
to him or to continue any such bonus or stock option plan.
4. Termination
-----------
4.1 Termination for Cause
---------------------
4.1.1 Upon written notice to Employer, Employee shall be entitled
to terminate the Employment Term for Cause. Cause with respect to Employer shall
mean Employer's material violation of its contractual obligations hereunder and
Employer's failure to cure such violation within fifteen (15) days after written
notice from Employee specifying such violation. Termination by Employee under
this Section 4.1.1 shall not be deemed a breach of this Employment Agreement by
Employee hereunder, but shall be deemed a breach by Employer hereunder.
4.1.2 Upon written notice to Employee, Employer shall be entitled
to terminate the Employment Term for Cause. Cause with respect to Employee shall
mean (i) conviction of Employee of a felony involving moral turpitude or
otherwise affecting or relating to the business of Employer (including without
limitation his entering of any plea of nolo contendere in connection with any
such felony proceeding); (ii) Employee's willful acts resulting in material
damage to Employer or Employer's business reputation (including without
limitation his material breach of any of the provisions of the Covenant Not to
Compete dated April , 1997 or of his Proprietary Information Agreement with
Employer); (iii) Employee's failure or neglect to obey the good faith directions
of the Board of Directors of Employer after expiration of a twenty (20) day
period after written notice specifying the nature of such failure or neglect,
during which Employee failed to cure the breach; (iv) any other act or omission
deemed cause under the law of the State of Massachusetts; or (v) the good faith
determination of the Board of Directors that Employee is performing his duties
in a manner which is not commensurate with reasonable standards for employees in
similar circumstances and with similar duties to those of Employee hereunder
("Substandard Performance"); provided that Employee may not be terminated for
Substandard Performance unless and until (a) the Board of Directors has provided
Employee with notice of Substandard Performance, which notice specifies with
particularity the areas of Substandard Performance and the action needed to cure
same, (b) Employee is given at least thirty (30) days (the "Cure Period") to
improve his performance in the specified areas, (c) the Board of Directors
determines after the Cure Period that Employee is still providing Substandard
Performance in the specified areas
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(or new areas of Substandard Performance) and (d) the Board then provides its
written notice to Employee of its determination to terminate his employment
forthwith.
4.2 TERMINATION WITHOUT CAUSE. Upon written notice to the other,
either party may terminate the Employment Term without cause for any reason, by
giving at least thirty (30) days prior written notice of such termination to the
other. In the case of Employee the right to give notice of such a termination
shall begin only after a date six (6) months from the effective date of this
Employment Agreement, it being understood that Employee's right to do so shall
give rise to no obligation on the part of Employer to pay any severance benefits
as specified in Section 4.4 below. If Employer determines not to extend
Employee's employment past the term of this Employment Agreement, a minimum of
six (6) months notice shall be given to Employee. The requirement of thirty (30)
days notice shall not, however, apply to the termination of Employee's
employment for Cause under Section 4.1 above. Should Employer terminate
Employee's employment during the Employment Term for any reason other than for
Cause, Employer shall become entitled to certain severance benefits as specified
in Section 4.4 below for services rendered prior to such termination.
4.3 DEATH OR DISABILITY. This Employment Agreement shall automatically
terminate, without notice, upon the death or permanent disability of Employee.
For purposes of this Section 4.3, Employee shall be deemed to be permanently
disabled if he shall be unable, due to illness or injury, to perform his duties
hereunder for eighty percent (80%) or more of the full regular business days
during any three (3) consecutive month period. Employee shall be deemed to be
permanently disabled on the last day of such three (3) month period.
4.4 SEVERANCE BENEFITS. Employee shall be entitled to receive the
severance benefits specified below in the event Employee's employment with
Employer should be terminated by Employer for any reason other than for Cause
(as defined in Section 4.1 above) during the Employment Term.
4.4.1 SALARY CONTINUATION. Employee shall continue to receive
salary continuation payments, at the Base Salary in effect under Paragraph 3.1
at the time of termination, for a period equal to the lesser of one (1) year
from the date of termination or the number of months remaining in the Employment
term. Such salary continuation payments shall be paid semimonthly and shall be
subject to all applicable withholding requirements.
4.4.2 Employee shall be eligible for a pro-rated portion of his
annual bonus for the period of salary continuation referenced in 4.4.1 above in
accordance with the achievement of the goals referenced in 3.4 above.
4.4.3 HEALTH COVERAGE. Employee shall be provided continued
health coverage, under Employer's medical plan for himself and his eligible
dependents until the earlier of (i) six (6) months after the effective date of
Employee's termination and (ii) the
4
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first date that Employee and his eligible dependents are covered under another
employer's health benefit program without exclusion for any pre-existing medical
condition. Such coverage shall be in lieu of all rights Employee and his
dependents may otherwise have under Internal Revenue Code Section 4980B to
receive such coverage for a longer period but at their own expense.
4.4.4 OTHER INSURANCE COVERAGE. Employee shall be provided,
without charge, continued insurance coverage under Paragraph 3.2 for a period of
six (6) months following the date of termination.
5. Miscellaneous
-------------
5.1 NOTICES. Any notice, request, or other communication required to
be given pursuant to the provisions of this Employment Agreement shall be in
writing and shall be deemed to be duly given if delivered in person or mailed by
registered or certified United States mail, postage prepaid, and mailed to
Employee at the address indicated below or to Employer at its principal office
in California. The parties hereto may change the above addresses from time to
time by giving notice thereof to each other in conformity with this Section 5.1.
5.2 CONSTRUCTION. This Employment Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed in
accordance with the internal laws of the Commonwealth of Massachusetts
applicable to the construction and enforcement of contracts wholly executed in
Commonwealth of Massachusetts by residents of that state and wholly performed in
Massachusetts.
5.3 CAPTIONS. The section headings and captions contained herein are
for reference only and shall not in any way affect the meaning or interpretation
of this Employment Agreement.
5.4 SEVERABILITY. If any provision of this Employment Agreement shall
be unlawful, void, or for any reason unenforceable, it shall be deemed stricken
from, and shall in no way affect the validity or enforceability of the remaining
provisions of this Employment Agreement. If any provision of this Employment
Agreement shall be determined, under applicable law, to be overly broad in
duration, geographical coverage or substantive scope, such provision shall be
deemed narrowed to the broadest term permitted by applicable law.
5.5 WAIVER. The waiver by either party hereto of a breach of any
provision of this Employment Agreement by the other shall not operate or be
construed as a waiver of any subsequent breach of the same provision or any
other provision of this Employment Agreement.
5.6 LIFE INSURANCE. To the extent that Employer desires to obtain
insurance on Employee's life, Employee shall cooperate and do all acts necessary
to enable Employer
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to obtain said insurance. Should such an insurance policy be obtained upon
expiration or termination of the Employment Agreement. Employee shall be given
the right to purchase the policy for its cash value and unexpired premiums.
5.7 REPRESENTATION REGARDING PRIOR CONTRACTS. Employee represents and
warrants that no prior contract or agreement of any kind entered into by
Employee or any prior or other performance by Employee will interfere in any
manner with Employee's complete performance of Employee's duties hereunder or
with Employee's compliance with the other terms and conditions hereof.
5.8 ENTIRE AGREEMENT. This Employment Agreement represents the entire
agreement and understanding between the parties hereto regarding Employee's
employment with Employer, and discussions between the parties and any other
person or legal entity concerning said employment.
5.9 BINDING AGREEMENT. The rights and obligations of the parties under
this Employment Agreement shall inure to the benefit of and shall be binding
upon the successors and assigns of such parties.
5.10 COUNTERPARTS. This Employment Agreement may be executed in one or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
5.11 AMENDMENTS. This Employment Agreement shall not be modified,
amended, or in any way altered except by an instrument in writing and signed by
both of the parties hereto.
5.12 COSTS AND EXPENSES. If either party to this Employment Agreement
brings an action against the other party to enforce his or its rights under this
Employment Agreement, the substantially prevailing party shall be entitled to
recover his or its costs and expenses, including without limitation, attorneys'
fees and costs, incurred in connection with such action, including any appeal of
such action.
IN WITNESS WHEREOF, the undersigned have executed this Employment
Agreement as of the date first written above.
EMPLOYEE: EMPLOYER:
Davidson & Associates, Inc.,
a California corporation
/s/ Xxxx Xxxxxxx By: /s/ Xxxxxxxx X. Xxxxx
------------------------- -----------------------------
Xxxx Xxxxxxx Xxxxxxxx X. Xxxxx
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EXHIBIT B
---------
COVENANT NOT TO COMPETE
THIS COVENANT NOT TO COMPETE (this "Covenant") is made and entered into
as of the day of April 28, 1997 by and between (i) Davidson & Associates, Inc.,
a California corporation ("Davidson"), and (ii) Xxxx Xxxxxxx ("Razboff"), an
individual residing in Massachusetts and the Chairman and CEO of Capitol
Multimedia, Inc., a Delaware corporation ("Capitol"), with respect to the
following:
RECITALS
The following provisions are made a part of and form the basis for this
Covenant:
A. Concurrently herewith, (i) Capitol is selling to Davidson certain
assets in exchange for the consideration set forth in, and in accordance with
the other terms and conditions of, that certain Asset and Stock Purchase
Agreement dated April 16, 1997, by and among Davidson and Capitol (the
"Agreement"), and (ii) Davidson and Razboff are entering into an employment
agreement dated April 28, 1997 whereby Davidson will employ Razboff as Vice
President of CUC Software and Chairman of Animation Magic ("Employment
Agreement").
B. An important factor in Davidson's decision to enter into the
Agreement is Razboff's covenant not to be involved, for a specified period of
time, in any business that competes with the business as conducted by the
portions of Capitol purchased by Davidson and Davidson or its successors. But
for Razboff's agreement to execute this Covenant, Davidson would not have
entered into the Agreement or the related transactions.
C. Razboff is executing and delivering this Covenant in accordance
with the terms and conditions of the Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises, the covenants,
conditions, representations, and agreements contained in the Agreement, and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Razboff covenants and agrees with Davidson as follows:
1. Non-Competition.
---------------
A. Subject to the terms of the Covenant and Razboff's continued
role as Chairman of Capitol, Razboff agrees that, for a period commencing on the
date hereof and (i) continuing for three (3) years should Razboff choose to
terminate his employment with Davidson prior to the expiration date of the
Employment Agreement or if neither
36
party chooses to continue Razboff's employment past the expiration date of the
Employment Agreement or if Razboff is terminated by Davidson for cause during
the term of the Employment Agreement or, (ii) for a period of one (1) year,
should Razboff's employment be terminated by Davidson without cause during the
term of the Employment Agreement or should Razboff remain employed for any
period of time past the date of his Employment Agreement (the "Covenant
Period"), Razboff shall not directly or indirectly (whether for compensation or
otherwise) own, manage, operate or control, or join or participate in the
ownership, management, operation or control of, or furnish any capital to or be
connected in any manner with, any Competing Business (as hereinafter defined)
that is located in or doing business in the Designated Regions (as hereinafter
defined), either as a general or limited partner, proprietor, common or
preferred shareholder, officer, director, agent, employee, consultant, trustee,
affiliate, or otherwise. Nothing contained in this Covenant shall be construed
to prohibit Razboff from (i) continuing to hold his shares in Capitol and act as
its Chairman as long as he devotes no more than five (5) hours per week to such
a role and otherwise devotes his full time and energy to his employment by
Davidson in accordance with the terms and conditions of the Employment
Agreement; (ii) purchasing or owning, as a passive investment, up to two percent
(2%) of the issued and outstanding shares of any publicly traded class of
securities of any corporation engaged in any business described above, provided
that Razboff does not render any advice of any kind to the management of such
corporation or actively participate in or control, directly or indirectly, any
activities of such corporation or otherwise participate in its business or
operations; (iii) acting as a passive investor of less than 20% of the total
assets in any company through a blind pool or independently managed investment
vehicle such as a venture capital partnership.
B. During the Covenant Period irrespective of Razboff's employment
with Davidson or its affiliates, Razboff will not use his status with Xxxxxxxx,
XXX Software or any of its affiliates to obtain loans, goods or services from
another organization on terms that would not be available to him in the absence
of his relationship to Davidson or any of its affiliates.
C. During the Covenant Period, Razboff without express written
approval from the Board of Directors of Xxxxxxxx, xxxx not (i) solicit any
customers of Davidson or CUC Software for or on behalf of any Competing Business
as hereinafter defined or (ii) persuade or attempt to persuade any customer,
supplier, contractor or any other person or party to cease doing business with
Davidson or CUC Software or to reduce the amount of business it does with
Davidson or CUC Software.
D. During the Covenant Period, Razboff will not knowingly solicit
or induce any person who is an employee of Davidson or CUC Software to terminate
any such relationship such person may have with Davidson or CUC Software as then
currently configured nor shall Razboff during such period directly or indirectly
offer employment to or compensate or cause or permit any person with which
Razboff may be affiliated to offer employment to or compensate, any employee of
Davidson, or CUC Software, or any person who had been employed by Davidson or
CUC Software within sixty (60) days of
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such offer or compensation. Razboff hereby represents and warrants that Razboff
has not entered into any agreement, understanding or arrangement with any
employee of Davidson or CUC Software pertaining to any business in which Razboff
has participated or plans to participate, or to the employment, engagement or
compensation of any such employee.
2. COMPETING BUSINESS DEFINED. For the purposes of this Covenant,
"Competing Business" shall mean any business other than Davidson which is
competitive with the portion of the business of Davidson represented by the
assets purchased and licensed under the Agreement (the "Business"), including
without limitation any business which distributes, develops or markets
multimedia consumer computer software for the entertainment or children's
education markets. The parties acknowledge and agree that Davidson has been and
Davidson will continue to be engaged in the Business and that Davidson is
acquiring the assets of Capitol so that Davidson may further pursue and expand
such business. The parties further acknowledge that subject to the limitations
contained in the Agreement the assets of Capitol and its subsidiaries, not
purchased by Davidson, including, without limitation, the assets related to its
currently existing or partially developed multimedia software products, its
software development capability and its supply chain management business, shall
not constitute a Competing Business as defined hereunder.
3. DESIGNATED REGIONS DEFINED; RELATED ACKNOWLEDGMENTS. For purposes
of this Covenant, "Designated Regions" shall mean all counties, cities, states
and countries throughout the world in which Davidson distributes its products.
Razboff hereby acknowledges and agrees that Davidson has heretofore conducted
Business in various places throughout the world, and that any Competing Business
throughout the world in such places shall be competitive with the Business.
Razboff also expressly agrees that, should a court of competent jurisdiction
determine that the Designated Regions are broader than may be permitted under
applicable law, such court shall nevertheless enforce this Covenant in the
broadest geographical areas permitted by such applicable law as provided under
Section 9 of this Covenant.
4. EQUITABLE REMEDIES. Razboff hereby acknowledges and agrees that
the obligations under this Covenant are such that Davidson cannot adequately be
compensated by damages for breach of such obligations. As a result, Razboff
hereby acknowledges and agrees that, in the event of any breach or threatened
breach of this Covenant, Davidson shall be entitled not only to damages or other
relief at law but also to seek equitable relief to enforce the breached
obligations, including, without limitation, specific performance and preliminary
and permanent injunctive relief (including temporary restraining orders).
5. BINDING AGREEMENT. This covenant and all its terms, provisions,
and conditions shall be binding upon and inure to the benefit of each party to
the Covenant and his or its respective successors and permitted assigns, it
being agreed that only an
3
38
express written termination and waiver of this covenant by Davidson can relieve
Razboff of his personal obligations hereunder.
6. COST AND EXPENSES. If either party to this Covenant brings an
action against the other party to this Covenant to enforce his or its rights
under this Covenant, or for a determination thereof, the prevailing party shall
be entitled to recover his or its reasonable costs and expenses, including,
without limitation, reasonable attorneys' fees and costs, incurred in connection
with such action, including any appeal of such action.
7. APPLICABLE LAW. This Covenant shall be construed and enforced in
accordance with the law of the Commonwealth of Massachusetts or the law of such
other state of the United States of America in which Razboff, at the time of an
asserted breach hereof, shall be involved, or propose or plan to be involved, in
a substantial or material manner with any Competing Business in the manner
described in Section 1 hereof, whichever such laws shall permit the broadest
possible enforcement of the provisions of the Covenant.
8. CAPTIONS. The Section headings and captions contained in this
Covenant are for reference purposes and convenience only and shall not in any
way affect the meaning or interpretation of this Covenant.
9. ENFORCEABILITY. If any provision of this Covenant shall be
determined, under applicable law, to be overly broad in duration, geographical
coverage, substantive scope, or otherwise, such provision shall be deemed
narrowed to the broadest term permitted by applicable law and shall be enforced
as so narrowed. If any provision of this Covenant nevertheless shall be
unlawful, void, or unenforceable, it shall be deemed severable from and shall in
no way affect the validity or enforceability of the remaining provisions of this
Covenant.
10. CONSIDERATION. Razboff has been compensated for the covenants
provided herein by, among other things, the execution of Razboff's employment
agreement with Davidson and performance thereof by Davidson.
11. NOTICE. Any notices hereunder shall be deemed to be properly given
if provided to Razboff in the manner provided in the Agreement.
12. WAIVER. The waiver by either party to this Covenant of a breach of
any provision of the Covenant by the other party to this Covenant shall not
operate or be construed as a waiver of any subsequent breach of the same
provision or of any other provision of this Covenant.
13. AMENDMENT. This Covenant may be altered, amended, or terminated
only by an instrument in writing executed by both parties hereto.
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39
14. COUNTERPARTS. This Covenant may be executed in one or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, Davidson and Razboff have caused this Covenant to be
duly executed as of the date set forth above.
Davidson & Associates, Inc.,
a California corporation
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxxx
------------------------------- -------------------------------
Xxxxxxxx X. Xxxxx Xxxx Xxxxxxx, an individual
5
40
SCHEDULE "B"
TERMINATION CERTIFICATION
This is to certify that I do not have in my possession, nor have I failed
to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, specifications, drawings, blueprints, sketches, materials,
equipment, other documents or property, or reproductions of any aforementioned
items belonging to Davidson & Associates, Inc., its subsidiaries, affiliates,
successors or assigns or any other relevant third party described in Xxxxxxxxx
0x of the Davidson & Associates, Inc. Proprietary Information Agreement
(together, the "Company").
I further certify that I have complied with all the terms of Company's
Proprietary Information Agreement signed by me.
I further agree that, in compliance with Company's Proprietary Information
Agreement, I will preserve as confidential all trade secrets, confidential
knowledge, data or other proprietary information relating to products,
processes, know-how, designs, formulas, developmental or experimental work,
computer programs, data bases, other original works of authorship, customer
lists, business plans, financial information or other subject matter pertaining
to any business of Company or any of its clients, consultants or licensees.
Date: ---------------------------
------------------------------
8
41
EXHIBIT C
---------
DAVIDSON & ASSOCIATES, INC.
PROPRIETARY INFORMATION AGREEMENT
In consideration of my hiring by Davidson & Associates, Inc. ("Company")
as a full-time employee thereof and the compensation now and hereafter paid to
me, I agree to the terms and conditions contained within this Proprietary
Information Agreement ("Proprietary Agreement") herein below:
1. Maintaining Confidential Information
------------------------------------
a. COMPANY INFORMATION. I agree at all times, both during and after
the termination of my employment for any reason whatsoever (whether with or
without cause), to hold in strictest confidence, and not to use or to disclose
or make accessible to any person or entity, without the prior written
authorization of the Board of Directors of Company, any trade secrets whenever
received, confidential knowledge, data or other proprietary information relating
to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, employee information, business plans, financial
information or other subject matter pertaining to any business of Company or any
of its affiliates, clients, consultants, licensees or licensors (collectively,
"Company Information"). I agree that Company may in its reasonable discretion
list specific information as being Company Information from time to time and I
will acknowledge any such listings in writing upon request. The fact that any
specific information is listed as Company Information will not in any way impair
Company's right to claim that any other information constitutes Company
Information. I understand that Company Information shall be solely owned by
Company, its successors and assigns, and that I may use Company Information
solely for the benefit of Company as directed by Company. I agree not to
reproduce or remove from Company's premises originals or copies of any notes,
data, reference materials, sketches, drawings, memoranda, documentation or
records owned by the Company except as is necessary to fulfill my duties to the
Company or as otherwise authorized by Company. I agree to take whatever steps
are reasonably necessary to preserve the confidentiality of any and all Company
Information I have received or do receive by virtue of my employment with
Company at the Company's expense.
b. FORMER EMPLOYER INFORMATION. I agree that I will not during my
employment with Company, use or disclose any confidential or proprietary
information or trade secrets of my former or concurrent employers or companies,
if any, and that I will not bring onto the premises of Company any unpublished
document or any property belonging to my former or concurrent employers or
companies, if any, unless consented to in writing by said employers or
companies.
42
c. THIRD PARTY INFORMATION. I recognize that Company has received and
in the future will receive from third parties their confidential or proprietary
information subject to a duty on Company's part to maintain the confidentiality
of such information and to use it only for certain limited purposes. I
understand and agree that such information is the sole property of such third
parties and that I owe Company and such third parties, both during the term of
my employment and thereafter, a duty to hold all such confidential or
proprietary information in the strictest confidence and not to disclose it to
any person or entity (except as necessary in carrying out my work for Company
consistent with Company's agreement with such third party) or to use it for the
benefit of anyone other than for Company or such third party (consistent with
Company's agreement with such third party) without the express written
authorization of the Board of Directors of Company and the governing body of
such third party.
d. EXCEPTIONS. My obligations under this Section shall not apply to
information which: (i) I can clearly demonstrate is previously known or becomes
generally known other than through my acts in violation of this Proprietary
Agreement; or (ii) is required to be disclosed by administrative or judicial
action provided that immediately after receiving notice of such action I will
notify Company of such action to give Company the opportunity to seek any other
legal remedies to maintain such Confidential Information in confidence; or (iii)
information I can demonstrate was developed independently of any Company
Disclosure of Company Information; or (iv) information I received from a third
party free of any obligations to the Company.
2. Disclosing and Assigning Inventions and Original Works
------------------------------------------------------
a. PRIOR INVENTIONS AND ORIGINAL WORKS. I have attached hereto, as
Schedule A, a list describing all inventions, original works of authorship,
developments, improvements, and trade secrets which were made by me prior to
February 1, 1996, which belong to me alone or jointly with others, which relate
to Company's proposed business, in developing, publishing and distributing
educational and entertainment software products (the "Company's Business"), and
which are not assigned to Company; if no such list is attached, I represent that
there are no such inventions, works of authorship, developments, improvements or
trade secrets.
b. INVENTIONS AND ORIGINAL WORKS ASSIGNED TO COMPANY. Subject to the
terms and conditions of the Covenant Not To Compete dated April 28, 1997, I
agree that I will promptly make full written disclosure to Company, will hold in
trust for the sole right and benefit of Company, and I hereby assign to Company
all my right, title, and interest in and to any and all inventions (and patent
rights with respect thereto), original works of authorship (including all
copyrights with respect thereto), developments, improvements or trade secrets
which I may solely or jointly conceive that relate to the business of Company
and (i) discuss with Company; (ii) reduce to an outline or treatment or develop
or reduce to practice, or cause to be conceived and reduced to a treatment
and/or discussed with Company or developed or reduced to practice, during the
period of time I am in the employ of Company. I acknowledge and agree that the
business of the
2
43
Company will likely change and its scope may be expanded during the period of
time I am in the employ of Company.
c. WORKS FOR HIRE. I acknowledge that all original works of
authorship which are made by me (solely or jointly with others) within the scope
of my employment and which are protectible by copyright are "works made for
hire," as that term is defined in the United States Copyright Act (17 USCA,
Section 101) and that I am an employee as defined under that Act. To the extent
that all or any part of such work product does not qualify as a "work made for
hire" under applicable law, I without further compensation therefor do hereby
irrevocably assign, transfer and convey in perpetuity to Company and its
successors and assigns the entire worldwide right, title, and interest in and to
any work product including, without limitation, all patent rights, copyrights,
mask work rights, trade secret rights and other proprietary rights therein. Such
assignment includes the transfer and assignment to Company and its successors
and assigns of any and all moral rights which I may have in any work product. I
acknowledge and understand that moral rights include the right of an author: (i)
to be known as the author of a work; (ii) to prevent others from being named as
the author of the works; (iii) to prevent others from falsely attributing to an
author the authorship of a work which he/she has not in fact created; (iv) to
prevent others from making deforming changes in an author's work; (v) to
withdraw a published work from distribution if it no longer represents the views
of the author; and (vi) to prevent others from using the work or the author's
name in such a way as to reflect on his/her professional standing. I further
agree from time to time to execute written transfers to Company of ownership of
specific original works of authorship (and all copyrights therein) made by me
(solely or jointly with others) within the scope of my employment which may,
despite the preceding sentence, be deemed by a court of law not to be works made
for hire, and which are being assigned by me to Company pursuant to this
Proprietary Agreement in such form as is acceptable to Company in its reasonable
discretion.
d. INVENTIONS ASSIGNED TO THE UNITED STATES. I agree to assign to the
United States government all my right, title, and interest in and to any and all
inventions, original works of authorship, developments, improvements or trade
secrets whenever such full title is required to be in the United States by a
contract between Company and the United States or any of its agencies, provided
I have been advised in writing prior to creation of such works that same is
required.
e. OBTAINING LETTERS PATENT AND COPYRIGHT REGISTRATIONS. I agree to
assist Company at Company's expense to obtain United States or foreign letters
patents and copyright registrations (as well as any transfers of ownership
thereof) covering inventions and original works of authorship assigned hereunder
to Company. Such obligation shall continue beyond the termination of my
employment, but Company shall compensate me at a reasonable rate for time
actually spent by me at Company's request on such assistance after such
termination. If Company is unable for any reason whatsoever, including my mental
or physical incapacity, to secure my signature to apply for or to pursue any
application for any United States for foreign letters patent or copyright
registrations (or on
3
44
any document transferring ownership thereof) covering inventions or original
works of authorship assigned to Company under this Proprietary Agreement, I
hereby irrevocably designate and appoint Company and its duly authorized
officers and agents as my agent and attorney in fact, to act for and in my
behalf and stead to execute and file any such applications and documents and to
do all other lawfully permitted acts to further the prosecution and issuance of
letters patent or copyright registrations or transfers thereof with the same
legal force and effect as if executed by me, provided however, that Company has
notified me of its intention to do so in writing. This appointment is coupled
with an interest in and to the inventions and work of authorship and shall
survive my death or disability. I hereby waive and quitclaim to Company any and
all claims, of any nature whatsoever, which I now or may hereafter have for
infringement of any patents or copyright resulting from or relating to any such
application for letters patent or copyright registrations assigned hereunder to
Company.
3. Returning Company Documents
---------------------------
I agree that, at the time of leaving the employ of Company (or at any
prior time at the request of Company), I will deliver to Company ( and will not
keep in my possession or deliver to anyone else) any and all devices, records,
data, notes, reports, proposals, lists, correspondence, specifications,
drawings, blueprints, sketches, materials, equipment, other documents or
property, or reproductions of any aforementioned items belonging to Company, its
successors or assigns. In the event of the termination of my employment, I agree
to sign and deliver the "Termination Certification" attached hereto as Schedule
B.
4. Representations
---------------
I agree to execute any proper oath or verify any proper document required
to carry out the terms of this Proprietary Agreement. I represent that my
performance of all the terms of this Proprietary Agreement and of my employment
with Company will not breach any agreement to keep in confidence proprietary
information acquired by me in confidence or in trust prior to my employment by
Company. I have not entered into, and I agree I will not enter into, either
during or after termination of my employment with Company, any oral or written
agreement in conflict herewith.
5. Injunctive Relief
-----------------
I agree that it would be difficult to measure the damage to Company from
any breach by me of the covenants set forth in Sections 1, 2, 3 or 4 herein,
that injury to Company from any such breach would be impossible to calculate,
and that money damages would therefore be an inadequate remedy for any such
breach. Accordingly, I agree that if I breach Sections 1, 2, 3 and 4 or any of
them, Company shall be entitled, in addition to all other remedies it may have,
to immediate injunctions or other appropriate orders to restrain any such
breach.
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6. General Provisions
------------------
a. GOVERNING LAW. This Proprietary Agreement will be governed by the
laws of the Commonwealth of Massachusetts applicable to contracts between
residents of Massachusetts which are wholly executed and performed in
Massachusetts.
b. ENTIRE AGREEMENT. This Proprietary Agreement sets forth the entire
agreement and understanding between Company and me relating to the subject
matter herein and merges all prior discussions between us. No modification of or
amendment to this Proprietary Agreement, nor any waiver of any rights under this
Proprietary Agreement, will be effective unless in writing signed by the party
to be charged. Any subsequent change or changes in my duties, salary or
compensation will not affect the validity or scope of this Proprietary
Agreement. This Proprietary Agreement is not intended to limit any rights that
Company may have under any other agreement or at law with respect to inventions,
original works or authorship, trade secrets or other proprietary rights.
c. ENFORCEABILITY. If any provisions of this Proprietary Agreement
shall be determined, under applicable law, to be overly broad in duration,
geographical coverage, substantive scope, or otherwise, such provisions shall be
deemed narrowed to the broadest term permitted by applicable law and shall be
enforced as so narrowed. If any provision of this Proprietary Agreement
nevertheless shall be unlawful, void, or unenforceable, it shall be deemed
severable from and shall in no way affect the validity or enforceability of the
remaining provisions of this Covenant.
d. SUCCESSORS AND ASSIGNS. This Proprietary Agreement will be binding
upon my heirs, executors, administrators and other legal representatives and
will be for the benefit of Company, its successors, and its assigns.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
5
46
e. EXPENSES. The prevailing party in any action or proceeding between
myself and Company arising out of or related to this Proprietary Agreement shall
be entitled to recover from the other party all of its costs and expense
including without limitation reasonable attorney's fees, incurred in connection
with such action or any appeal of such action.
Date:
DAVIDSON & ASSOCIATES, INC.
By: /s/ Xxxxxxxx X. Xxxxx /s/ Xxxx Xxxxxxx
-------------------------------- ----------------------------
Title: President Xxxx Xxxxxxx
6
47
SCHEDULE "A"
LIST OF PRIOR INVENTIONS
AND ORIGINAL WORKS OF AUTHORSHIP
Identifying Number
Title Date or Brief Description
----- ---- --------------------
NONE N/A N/A
Name _________________________________
7
48
Exhibit D to the Asset and Stock Purchase Agreement
ADDENDUM 1
TO THE
DEVELOPMENT AGREEMENT
This document ("Addendum 1") shall, as of the date of complete execution of that
certain Asset and Stock Purchase Agreement dated April 16, 1997 (the "Purchase
Agreement"), serve to amend that certain DEVELOPMENT AGREEMENT dated April 1,
1996 ("Agreement") by and between Davidson & Associates, Inc. and its wholly
owned subsidiaries, by and through its Blizzard Entertainment division
("Blizzard"), and Capitol Multimedia, Inc. ("Developer").
WHEREAS, Davidson & Associates, Inc. ("Davidson") and Developer are
parties to the Purchase Agreement, whereby Davidson is purchasing certain
assets and assuming certain liabilities of Developer; and
WHEREAS, As a result of the parties' execution of the Purchase Agreement,
Developer will cease further development of the Work which is the subject of the
Agreement and Developer shall be compensated for royalties relating to the Work,
if any, at the lower rate set forth below.
NOW THEREFORE, by reason of the foregoing premises and in consideration of the
mutual covenants and premises hereinafter set forth, the parties hereto agree as
follows:
THE AGREEMENT SHALL BE AMENDED IN THE FOLLOWING RESPECTS ONLY:
1. Paragraph 3(e), entitled "License for Blizzard materials," shall be deleted
in its entirety.
2. Paragraph 6(b) shall be deleted in its entirety.
3. Paragraph 12, entitled "Modification Services," shall be deleted in its
entirety.
4. The following sentence shall be deleted from Paragraph 13(c), entitled
"Effects of Termination": " (i) In the event this Agreement is terminated
in accordance with Paragraph 13(b)(ii) above, the Engine License granted in
Paragraph 3 hereinabove, shall be revoked and Blizzard shall pay to
Developer a termination fee in the amount of one hundred, twenty-five
thousand dollars ($125,000)."
5. Paragraph 15, entitled "Internal Development of Product Ports," shall be
deleted in its entirety.
6. The following sentence shall be deleted from Paragraph 16, entitled
"Promotional Copies": "Developer may purchase additional copies of the
Product from Blizzard for internal and promotional uses at Blizzard's cost
of goods."
7. Milestone #6 contained in Exhibit A to the Agreement shall be replaced with
the following: "MILESTONE #6 (FINAL MILESTONE)- ONE HUNDRED, SIXTY-SEVEN
THOUSAND, FIVE HUNDRED DOLLARS ($167,500) Delivery of all materials
relating to the Work- April 16, 1997
8. Milestones 7 through 11 contained in Exhibit A to the Agreement shall be
deleted in their entirety.
9. Section 3 contained in Exhibit A to the Agreement, entitled "Royalties and
Development Fees," shall be deleted and replaced with the following new
Section 3:
"3. Royalties and Development Fees:
------------------------------
(a). Subject to the termination provisions contained in Paragraph 13,
Blizzard shall pay Developer a non-refundable development fee of six
hundred, twenty-five thousand dollars ($625,000) to be paid according to
the payment schedule set forth in Section 2 above.
49
(b). Blizzard shall pay Developer a royalty against the aggregate of Net
Receipts and Net Proceeds of the Product created hereunder, as follows:
Up to five million dollars ($5,000,000) zero
From five million ($5,000,000) up to ten million dollars ($10,000,000) two point five percent (2.5%)
From ten million ($10,000,000) up to fifteen million dollars ($15,000,000) three point seven-five percent (3.75%)
From fifteen million dollars ($15,000,000) and above five percent (5%)
(c). Royalties due Developer regarding revenue received from the sale
and/or licensing of Ports shall be treated identical to that of a Product
if created by Developer, otherwise royalties regarding Ports shall be paid
to Developer at a rate of twenty-five percent (25%) of that set forth in
Section 3(b) above.
NOTWITHSTANDING THE FOREGOING, ALL OTHER TERMS AND CONDITIONS OF THE AGREEMENT
WILL REMAIN IN FULL FORCE AND EFFECT.
Davidson & Associates, Inc. Capitol Multimedia, Inc.
By: /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxx Xxxxxxx
----------------------------- -----------------------------------
Xxxx Xxxxxxx
Title: President Chairman & CEO
--------------------------
Date Signed: 4/16/97 Date Signed: 4/16/97
--------------------- --------------------------
50
Exhibit E to the Asset and Stock Purchase Agreement
PROFESSIONAL SERVICES AGREEMENT
Beginning on the 16 day of April 1997, Capitol Multimedia, Inc. ("Contractor")
agrees to provide certain named individuals to perform services for Davidson &
Associates, Inc. ("Davidson") pursuant to the following terms and conditions:
1. Acting as an independent contractor, Contractor will provide the services
of the individuals named in Exhibit A (these individuals being collectively
referred to hereinafter as the "Service Providers") who will render their
services as stated in Exhibit A ("Services"). It is expressly agreed by the
parties that such individuals will be employed by Contractor in its own name,
and at its own risk and expense. Such employees of Contractor shall have no
claim against Davidson for salaries, commission, or other items of income, cost,
or expense. Contractor and the Service Providers will take direction from and
report to Xxxx Xxxxxxx. Contractor will use its best efforts to maintain the
employment of the Service Providers, including diligent attention to immigration
documentation and related materials. Contractor will immediately notify Davidson
of any event which may affect Contractor's ability to continue to provide the
services of any of the Service Providers on a long-term basis.
2. In consideration for providing the services of the Service Providers,
Contractor will receive from Davidson a fee which is payable in accordance with
Exhibit A.
3. Contractor understands that neither it nor the Service Providers is
authorized to incur any expenses on behalf of Davidson without prior written
consent, and all statements for the Services and expenses shall be in the form
prescribed by Davidson and shall be approved by Xxxx Xxxxxxx.
4. Davidson has the right, in its sole discretion, to terminate this Agreement
for any reason with seven (7) days prior written notice. In the event of such a
termination, Davidson's sole obligation will be to pay Contractor, pro rata, for
the Services which shall have been provided as of that date by the Service
Providers. Davidson will have no further obligation, whether financial or
otherwise, including but not limited to obligations to the Service Providers,
and Contractor's employment obligations and expenses described in Paragraph 1
above, to Contractor after such cancellation. Davidson may terminate this
Agreement immediately upon Contractor's refusal or inability to perform under,
or Contractor's breach of, any provision of this Agreement.
5. Contractor will not, either during or subsequent to the term of this
Agreement, directly or indirectly disclose any information designated as
confidential by Davidson; nor will Contractor disclose to anyone other than a
Davidson employee or use in any way other than in the course of the performance
of this Agreement any information regarding Davidson, including but not limited
to Davidson's product, market, financial or other plans, product designs and any
other information not known to the general public whether acquired or developed
by Contractor during performance of this Agreement or obtained from Davidson
employees; nor will Contractor, either during or subsequent to the term of this
Agreement, directly or indirectly disclose or publish any such information
without prior written authorization from Davidson to do so. Unless otherwise
specifically agreed to in writing, all information about and relating to
projects under development by Davidson and/or parties doing work under contract
to Davidson including the Services rendered hereunder by Contractor shall be
considered confidential information. Contractor acknowledges and agrees that all
of the foregoing information is proprietary to Davidson, that such information
is a valuable and unique asset of Davidson, and that disclosure of such
information to third parties or unauthorized use of such information would cause
substantial and irreparable injury to Davidson's ongoing business for which
there would be no adequate remedy at law. Accordingly, in the event of any
breach or attempted or threatened breach of any of the terms of this Paragraph
5, Contractor agrees that Davidson shall be entitled to seek injunctive and
other equitable relief, without limiting the applicability of any other
remedies.
6. Contractor will return to Davidson any Davidson property that has come into
its possession during the term of this Agreement, when and as requested to do so
by Davidson and in all events upon termination of Contractor's engagement
hereunder, unless Contractor receives written authorization from Davidson to
keep such property.
7. As part of this Agreement, and without additional compensation, Contractor
acknowledges and agrees that any and all tangible and intangible property and
work products, ideas, inventions, discoveries and improvements, whether or not
patentable, which are conceived/developed/created/obtained or first reduced to
practice by Contractor for Davidson in connection with the performance of the
Services (collectively referred to as the "Work Product"), including, without
limitation, all technical notes, schematics, software source and object code,
prototypes, breadboards, computer models, artwork, sketches, designs, drawings,
paintings, illustrations, computer generated artwork, animations, video, film,
artistic materials, photographs and any film from
================================================================================
DAVIDSON & ASSOCIATES, INC. PSA AGREEMENT (revised 1/97) Page 1
Page Acknowledgment: DAVIDSON ______________ CONTRACTOR ________________
51
which the photographs were made, literature, methods, processes, voice
recordings, vocal performances, narrations, spoken word recordings and unique
character voices, shall be considered "works made for hire" and therefore all
right, title and interest therein (including, without limitation, patents and
copyrights) shall vest exclusively in Davidson. To the extent that all or any
part of such Work Product does not qualify as a "work made for hire" under
applicable law, Contractor without further compensation therefor does hereby
irrevocably assign, transfer and convey in perpetuity to Davidson and its
successors and assigns the entire worldwide right, title, and interest in and to
the Work Product including, without limitation, all patent rights, copyrights,
mask work rights, trade secret rights and other proprietary rights therein. Such
assignment includes the transfer and assignment to Davidson and its successors
and assigns of any and all moral rights which Contractor may have in the Work
Product. Contractor acknowledges and understands that moral rights include the
right of an author: to be known as the author of a work; to prevent others from
being named as the author of the works; to prevent others from falsely
attributing to an author the authorship of a work which it has not in fact
created; to prevent others from making deforming changes in an author's work; to
withdraw a published work from distribution if it no longer represents the views
of the author; and to prevent others from using the work or the author's name in
such a way as to reflect on his/her professional standing.
8. None of the Work Product is to be used by Contractor on any other project
or with any other client except with Davidson's written consent. If any part of
such Work Product is the work of a subcontractor employed by Contractor, then
Contractor will require such subcontractors to execute an assignment document in
the form attached hereto as Exhibit B so as to secure for Davidson exclusive
ownership in such Work Product. In the event Contractor is unable to obtain
exclusive ownership from such subcontractors, Exhibit C must be signed to obtain
a license for the benefit of Davidson. Contractor shall promptly thereafter
deliver such originally executed assignment or license documents to Davidson.
9. With respect to all subject matter including ideas, processes, designs and
methods which Contractor discloses or uses in the performance of the Services:
a) Contractor warrants that Contractor has the right to make disclosure and use
thereof without liability or compensation to others; b) to the extent that
Contractor has patent applications, patents or other rights in the subject
matter, if any, Contractor hereby grants Davidson, its parent, subsidiaries,
affiliates and assigns, a royalty-free, irrevocable world-wide, non-exclusive
license to make, have made, sell, use and disclose such subject matter in any
form now or hereafter known, which is set forth in writing in Section 5 of
Exhibit A; and c) Contractor agrees to defend indemnify and hold Davidson
harmless from any claims, litigations, actions, damages or fees of any kind
(including reasonable attorney's fees) arising from Davidson's or Contractor's
use or disclosure of subject matter which Contractor knows or reasonably should
know others have rights in, except, however, for subject matter and the identity
of others having rights therein that Contractor discloses to Davidson in writing
before Davidson uses the subject matter.
10. It is understood and agreed that in performing the Services for Davidson
hereunder, Contractor shall act in the capacity of an independent contractor and
not as an employee or agent of Davidson. Contractor agrees that it shall not
represent itself as the agent or legal representative of Davidson for any
purpose whatsoever. When Contractor is working on the premises of Davidson,
Contractor shall observe the working hours, working rules, and security
procedures established by Davidson. No right or interest in this Agreement shall
be assigned by Contractor without the prior written permission of Davidson, and
no delegation of the performance of the Services or other obligations owed by
Contractor to Davidson shall be made without the prior written consent of
Davidson. This Agreement shall be deemed to have been made and executed in the
State of California and any dispute arising hereunder shall be resolved in
accordance with the law of California. This Agreement may be amended, altered or
modified only by an instrument in writing, specifying such amendment, alteration
or modification, executed by both parties. This Agreement constitutes and
contains the entire agreement between the parties with respect to the subject
matter hereof and supersedes any prior oral or written agreements. Nothing
herein contained shall be binding upon the parties until this Agreement has been
executed by an officer or agent of each and has been delivered to the parties.
Agreed to and Accepted:
DAVIDSON & ASSOCIATES, INC. CONTRACTOR
By: /s/ Xxxxxxxx X. Xxxxx Signature /s/ Xxxx Xxxxxxx
------------------------- --------------------
Title: President 00-0000000
---------------------- ------------------------------
Federal Tax ID #
Date: 4/16/97 Date: 4/16/97
----------------------- ------------------------
================================================================================
DAVIDSON & ASSOCIATES, INC. PSA AGREEMENT (revised 1/97) Page 2
Page Acknowledgment: DAVIDSON ______________ CONTRACTOR ________________
52
EXHIBIT A
1. SERVICES
Subject to early termination in accordance with Paragraph 4 of this Agreement,
Contractor will provide the services of the three (3) individuals listed below
from the effective date of this Agreement through December 31, 1998. Each
individual will perform Services for Davidson as assigned by Xxxx Xxxxxxx at the
monthly rates set forth below.
Name Biweekly price of Services
---- --------------------------
Xxxxx Xxxxxxxxx $2,364.50
Xxxxx Xxxxxx $1,983.09
Xxxxxxx Xxxxxxxxxx $1,983.09
2. PAYMENT
Contractor shall be paid for the Services as set forth above.
3. EXPENSES
The following authorized expenditures are the maximum that Contractor shall be
eligible to receive as a reimbursement. Contractor must produce receipts for all
preapproved expenses for which Davidson will reimburse Contractor within fifteen
(15) business days of receiving such receipts and expense reports. All expenses
incurred by Contractor not specifically approved herein shall be the sole
responsibility of Contractor.
Amount Approved Expenses
------ -----------------
None None
4. PAYMENT SCHEDULE
Contractor will submit an invoice for the payment of Services on a monthly
basis. Davidson will pay Contractor within fifteen (15) business days following
the receipt of Contractor's invoice. All invoices must be sent to Davidson &
Associates, Inc. attention: Controller at 00000 Xxxxxxx Xxxxxx, Xxxxxxxx, XX
00000.
5. WORK FOR HIRE EXCLUSIONS
The following includes all subject matter that is excluded from the assignment
of rights granted in Section 7, but which is licensed under Section 9(b):
1. NONE
================================================================================
DAVIDSON & ASSOCIATES, INC. PSA AGREEMENT (revised 1/97) Page 3
Page Acknowledgment: DAVIDSON ______________ CONTRACTOR ________________
53
EXHIBIT F
---------
ASSUMPTION AGREEMENT
--------------------
THIS ASSUMPTION AGREEMENT, dated as of April 16, 1997 (this "Agreement"),
is made between CAPITOL MULTIMEDIA, INC., a Delaware corporation ("Seller"), and
DAVIDSON & ASSOCIATES, INC., a California corporation ("Buyer").
R E C I T A L S
- - - - - - - -
A. The parties have entered into an Asset and Stock Purchase
Agreement dated as of April 16, 1997 (the "Purchase Agreement"), pursuant to
which, on the date hereof, Seller will sell, assign, transfer and convey to
Buyer, and Buyer will purchase and accept from Seller, all of Seller's right,
title and interest in and to the Purchased Assets. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the Purchase
Agreement.
B. As part of the consideration for the sale by Seller to Buyer of
the Purchased Assets as contemplated by the Purchase Agreement, Buyer has agreed
to assume certain debts, liabilities and obligations of Seller.
A G R E E M E N T
- - - - - - - - -
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:
1. ASSUMPTION OF OBLIGATIONS. Buyer, for itself and its successors
and assigns, hereby assumes and agrees to pay, perform and discharge when due,
all of the following debts, liabilities and obligations of Seller, whether
absolute, contingent, accrued or otherwise:
(a) all liabilities and obligations of Seller arising under the
Liabilities Assumed as more particularly set forth in Parts 1, 2, 3 and 4
of Schedule 1.3 to the Agreement;
(b) all debts, liabilities and obligations relating to, or
arising out of, the Purchased Assets from and after the date hereof; and
(c) all liabilities for taxes relating to, or arising out of,
the operation of ZAO AMI from and after the date hereof; and
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
54
2. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the internal laws of the State of Delaware, excluding the
laws pertaining to conflicts or choice of law.
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the first date written above.
DAVIDSON & ASSOCIATES, a California corporation
By: /s/ Xxxxxxxx X. Xxxxx
---------------------------------------------
Xxxxxxxx X. Xxxxx
Title: President
------------------------------------------
CAPITOL MULTIMEDIA, INC., a Delaware corporation
By: /s/ Xxxx Xxxxxxx
---------------------------------------------
Xxxx Xxxxxxx
Title: Chairman and CEO
------------------------------------------
2
55
EXHIBIT G
---------
ENGINE LICENSE
--------------
This document ("Agreement") is entered into as of the closing date for that
certain Asset and Stock Purchase Agreement dated April 16, 1997 (the "Purchase
Agreement"), by and between Davidson & Associates, Inc.
("Buyer"), and Capitol Multimedia, Inc. ("Seller").
WHEREAS, Buyer and Seller are parties to the Purchase Agreement, whereby Buyer
is purchasing certain assets and assuming certain liabilities of Seller; and
WHEREAS, as partial consideration for the purchase price paid by Buyer to Seller
under the Purchase Agreement, Seller hereby grants to Buyer the following
license.
NOW THEREFORE, by reason of the foregoing premises and in consideration of the
mutual covenants and premises hereinafter set forth, the parties hereto agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms will have the
meanings set forth below:
a) "Intellectual Property Rights" shall mean any and all rights existing
from time to time under patent law, copyright law, trade secret law, moral
rights law, and any and all other similar proprietary rights and any renewals
and extensions thereof, now or hereafter in force and effect in the United
States and throughout the universe.
b) "Engine" shall mean the Magic Composer Tool Suite Interactive Game
Editor, Runtime Engine and Line Tester Software. The Magic Composer Tool Suite
includes the Magic Composer and the Magic Composer Windows and Macintosh Runtime
Engines. The Magic Composer is a tool which allows non-programmers to assemble
animation intensive interactive multimedia titles. The tool includes editors for
animation, bitmaps, fonts, hotspots, text strings, sound placement, and events.
It also has a highly developed scripting language which accommodates the
creation of complex interactive designs. The tool is written in C++ and runs on
Win95 and WinNT computers. It has a modular design which allows the easy
inclusion of new data types, editors, and functionality. The Magic Composer
generates one set of resource files which can be used by both the Windows and
Macintosh versions of the Runtime Engines. The Line Tester Software displays
pencil animation on a computer screen and allows the frames to be edited and/or
rearranged.
c) "CUC Group" shall mean the subsidiaries and unincorporated divisions
of CUC International, Inc., whether now existing or hereafter acquired or
created, and their respective successors and assigns.
56
2. GRANT OF LICENSE. For good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Seller hereby grants to Buyer and
Buyer hereby accepts a non-exclusive, perpetual, royalty-free, worldwide license
in and to the Engine only in combination with multimedia software products
developed by and/or for the CUC Group:
(a) including but not limited to any and all Intellectual Property Rights
therein and thereto, including the right to display, perform, reproduce,
distribute, prepare derivative works, use, advertise, promote, market, sell,
lease, rent, manufacture and/or otherwise exploit the Engine, any and all
derivative works thereof, and any and all elements of any of the foregoing, in
any and all media throughout the universe, whether now known or hereafter
devised, including but not limited to any exploitation in any configuration
including but not limited to optical disk-, magnetic disk-, floppy-, tape-, and
cartridge-based platforms, coin-activated platforms, electronic distribution via
broadband and/or narrow band networks, satellite transmission, and bundling with
other products produced by Buyer or third parties and the right to adapt,
change, revise, edit, abridge or rearrange the Engine, any and all derivative
works thereof, and any and all elements of the foregoing, and to combine same
with other works; and
(b) including the right to sublicense the Engine, and any and all
derivative works and improvements thereof, to third parties engaged by the Buyer
for the purpose of developing products for the Buyer, including, without
limitation, any Intellectual Property Rights claimed by Seller with respect to
the Engine.
Seller hereby waives, for itself and on behalf of any authors and their heirs,
executors, administrators and assigns, the benefit of any law, doctrine or
principle known as "Droit Moral," or "moral rights of authors" or any similar
law, doctrine or principle however denominated throughout the universe.
3. OWNERSHIP OF THE PRODUCT The Seller owns and will retain all title,
copyright, trademark and other proprietary rights in and to the Engine. This
Agreement is NOT a sale of the Engine or any copy of it. Notwithstanding the
foregoing, however, Licensee shall own all title and Intellectual Property
Rights in and to any derivative works or improvements to the Engine made by the
CUC Group and its sublicensees.
3.1 Buyer will not sell, license, sublicense, rent, or otherwise
transfer the Engine, as a stand alone product outside the CUC Group without the
written permission of the Seller. The Seller will not withhold permission to
assign this Agreement as long as the Seller will permanently transfer its future
rights to the entire Engine (including all components and archival copies, if
any, but excluding all derivative works and improvements of the Engine), and the
entity which wishes to assume the rights and obligations granted to Buyer
hereunder agrees to the terms and conditions of this Agreement.
4. TERMINATION. The Seller may terminate this license in the event of any
failure or default in the performance of any provisions of this license with a
written notice to the
57
Buyer and if the Buyer fails to cure said failure or default to the satisfaction
of the Seller within 30 days after such notice. Upon the termination of this
license, the Buyer will promptly return to the Seller or destroy all copies of
the Engine and related documentation covered by this license.
5. Limitation of Liability. THE BUYER HEREBY ACKNOWLEDGES RECEIPT OF THE
ENGINE IN THE "AS IS" CONDITION. THE SELLER SHALL NOT BE LIABLE FOR SPECIAL,
TORT, CONSEQUENTIAL, COLLATERAL OR INCIDENTAL, PERSONAL OR PROPERTY DAMAGE AS A
RESULT OF ANY BREACH OF WARRANTY, EXPRESSED OR IMPLIED, ARISING OUT OF THE
LICENSE OF THE ENGINE HEREUNDER AND THE SOLE AND EXCLUSIVE REMEDY AGAINST THE
SELLER SHALL BE LIMITED TO THE COST OF REPLACEMENT OF THE DAMAGED MEDIA, BUT IN
NO EVENT SHALL THE SELLER BE LIABLE FOR ANY DAMAGES AS A RESULT OF THE COST OF
REMOVAL OR REINSTALLATION, OUTSIDE COMPUTER TIME, LABOR COSTS, LOSS OF GOOD
WILL, LOSS OF PROFITS, LOSS OF SAVINGS, LOSS OF USE OR INTERRUPTION OF BUSINESS.
THE COLLECTIVE LIABILITIES OF THE SELLER ARE SUBJECT TO THE LIMITATION OF
LIABILITIES DESCRIBED IN THIS AGREEMENT.
6. GENERAL The terms of this license shall be construed in accordance with
the substantive laws of the State of Delaware.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first above written.
SELLER BUYER
BY: /s/ Xxxx Xxxxxxx BY: /s/ Xxxxxxxx X. Xxxxx
---------------------------- -------------------------
Xxxx Xxxxxxx Xxxxxxxx X. Xxxxx
DATE: 4/16/97 DATE: 4/16/97
-------------------------- -----------------------
58
EXHIBIT H
---------
FORM OF XXXX OF SALE
XXXX OF SALE, made, executed and delivered effective as of the 16th day
of April, 1997, by Capitol Multimedia, Inc., a Delaware corporation ("SELLER"),
to Davidson & Associates, Inc., a California corporation ("BUYER").
WITNESSETH:
WHEREAS, Buyer and Seller are parties to an Asset and Stock Purchase
Agreement, effective as of April 16, 1997, (the "AGREEMENT"), providing for,
among other things, the transfer and sale to Buyer of the Purchased Assets, as
that term is defined in the Agreement and all as more fully described therein,
for consideration in the amount and on the terms and conditions provided in the
Agreement; and
WHEREAS, the parties now desire to carry out the intent and purpose of
the Agreement by Seller's execution and delivery to Buyer of this instrument
evidencing the sale, conveyance, assignment, transfer and delivery to the Buyer
of all of the Purchased Assets to be conveyed under the Agreement;
NOW, THEREFORE, in consideration of the foregoing premises and for other
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged:
Seller has, effective from and after the date hereof, sold, conveyed,
assigned, transferred and delivered, and by this Xxxx of Sale does, effective
from and after the date hereof, sell, convey, assign, transfer and deliver unto
Buyer, its successors and assigns, forever, all of Seller's right, title and
interest in the Purchased Assets to have and to hold all of such Purchased
Assets unto Buyer, its successors and assigns forever.
59
Seller hereby covenants and agrees that, from time to time after the
delivery of this instrument, at Buyer's request and without further
consideration, Seller will execute and deliver to Buyer such documents and take
such other action as Buyer may reasonably request in order to consummate the
transactions contemplated by the Agreement and to vest in Buyer full right,
title and interest in and to the Purchased Assets being transferred hereby and
thereby.
IN WITNESS WHEREOF, this Xxxx of Sale has been duly executed and
delivered by a duly authorized officer of Seller effective as of the date first
above written.
CAPITOL MULTIMEDIA, INC.
By: /s/ Xxxx Xxxxxxx
----------------------------
Name: Xxxx Xxxxxxx
Title: Chairman and CEO
CORPORATE ACKNOWLEDGMENT
------------------------
STATE OF MASSACHUSETTS)
:ss:
COUNTY OF MIDDLESEX)
On the 16 day of April, 1997, before me personally came Xxxx Xxxxxxx,
to me known, who, by me being duly sworn, did depose and say that deponent is
the Chairman and CEO of Capitol Multimedia, Inc., the corporation described in
the within document; and the deponent executed such document on behalf of said
corporation with full authority to do so.
[NOTARY SEAL] /s/ Xxxxxxx Xxxxx
---------------------------
Notary Public
2
60
EXHIBIT I
LEASE ASSIGNMENT AND RELEASE
----------------------------
AGREEMENT, made upon the Effective Date (as defined below) by and between
Concord Office Realty Associates (hereinafter called "LESSOR"), Capitol
Multimedia, Inc., a Delaware corporation with its principal place of business in
Concord, Massachusetts (hereinafter called "LESSEE") and Davidson & Associates,
Inc., with its principal place of business in Torrance, California (hereinafter
called "ASSIGNEE").
Reference is made to a lease dated September 5, 1996 (the "Lease"),
between LESSOR and LESSEE covering certain premises consisting of portions of
the building described in Appendix A of the Lease containing approximately 5443
square feet, which building is known as and numbered 000 Xxxxx Xxxxxx, Xxxxxxx,
Xxxxxxxxxxxxx (hereinafter called the "leased premises"); and
Reference is further made to the fact that each of the parties hereto
desire that the interest of LESSEE in the Lease be assigned by LESSEE to
ASSIGNEE and that LESSEE be fully released from all future obligations under the
Lease.
Accordingly, in consideration of the foregoing and mutual covenants
hereinafter set forth, the parties hereto do agree each with the other as
follows:
1. LESSEE hereby assigns and transfers all of its rights, title and interest
in the Lease and the leased premises to ASSIGNEE effective upon the closing
date for that certain Asset and Stock Purchase Agreement dated April 16,
1997 (the "Effective Date").
2. ASSIGNEE hereby accepts the foregoing assignment and assumes and agrees to
perform all of the obligations of LESSEE under the Lease arising or
accruing on or after the Effective Date. In no event shall ASSIGNEE be
responsible for any damages, costs, expenses, claims or liabilities arising
out of any acts, omissions or occurrences arising or accruing before the
Effective Date.
3. LESSOR hereby consents to the assignment of LESSEE's interest in the Lease
and security deposit to ASSIGNEE notwithstanding any language to the
contrary in the Lease.
4. LESSOR and LESSEE further warrant and represent to ASSIGNEE that (i) the
Lease attached hereto as Exhibit I-4 is a true and complete copy thereof
and there are no amendments or modifications thereto; (ii) the Lease has
been duly authorized and is the legal, valid and binding obligation of the
parties thereto; and (iii) LESSEE's interest in the Lease is free and clear
of any liens, encumbrances or adverse interests of any third parties. The
representations and warranties contained in this Section 4 shall survive
after the date hereof.
61
5. LESSEE will indemnify ASSIGNEE against and hold ASSIGNEE harmless from any
and all loss, liability and expense (including reasonable attorney's fees
and court costs) arising out of any breach by LESSEE of its representations
and warranties contained in the Agreement and ASSIGNEE will indemnify
LESSEE against and will hold LESSEE harmless from any loss, liability and
expense (including reasonable attorney's fees and court costs) arising out
of any breach by ASSIGNEE of its agreements contained in this Agreement on
or after the date hereof.
6. This Agreement may not be modified or terminated orally or in any manner
other than by agreement in writing signed by the LESSOR and ASSIGNEE or
their respective successors and assigns.
EXECUTED as a sealed instrument on the day and year first above written in
three counterpart copies, each of which shall be deemed to be an original and
all together but one and the same instrument.
LESSOR:
By: /s/ Xxxxx Xxxxxx
-----------------------------
Xxxxx Xxxxxx
LESSEE:
By: /s/ Xxxx Xxxxxxx
-----------------------------
Xxxx Xxxxxxx
Title: Chairman and CEO
ASSIGNEE:
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Xxxxxxxx X. Xxxxx
Title: President
62
LEASE BETWEEN: CONCORD OFFICE REALTY ASSOCIATES &
CAPITOL MULTIMEDIA, INC. DATED: 9/5/96
EXHIBIT I-4
-----------
LEASE BETWEEN
CONCORD OFFICE REALTY ASSOCIATES
AND
CAPITOL MULTIMEDIA, INC.
FOR PREMISES LOCATED AT:
000 XXXXX XXXXXX, XXXXXXX, XXXXXXXXXXXXX
DATED: SEPTEMBER 5, 1996
63
LEASE BETWEEN: CONCORD OFFICE REALTY ASSOCIATES &
CAPITOL MULTIMEDIA, INC. DATED: 9/5/96
TABLE OF CONTENTS
-----------------
PAGE #
------
1.1 REFERENCE SUBJECTS 1
2.1 PREMISES AND TERMS 3
2.2 LANDLORD WORK 3
2.3 TENANT WORK 3
3.1 ANNUAL BASE RENT 4
3.2 ADDITIONAL RENT - TAXES AND OPERATING EXPENSES 4
4.1 TENANT'S COVENANTS 5
4.1.1 MAINTENANCE 6
4.1.2 USE AND COMPLIANCE WITH LAW 6
4.1.3 LIENS AND ENCUMBRANCES 6
4..1.4 INDEMNITY 6
4.1.5 LANDLORD'S RIGHT TO ENTER 6
4.1.6 PERSONAL PROPERTY AT TENANT'S RISK 7
4.1.7 OVERLOADING, NUISANCE, ETC 7
4.1.8 YIELD UP 8
4.1.9 HOLDING OVER 8
4.1.10 ASSIGNMENT 8
5.1 BUILDING SERVICES 9
5.1.1 LANDLORD'S REPAIR 9
5.1.2 OFFICE IDENTIFICATION 9
5.1.3 GROUNDS MAINTENANCE 9
5.1.4 ELEVATOR, HEAT AND AIR CONDITIONING, WATER 9
5.2 INTERRUPTIONS 10
6.1 TENANT'S INSURANCE 10
6.2 DAMAGE OR DESTRUCTION OF PREMISES 10
6.3 EMINENT DOMAIN 11
7.1 EVENTS OF DEFAULT 11
7.2 REMEDIES CUMULATIVE; JURY WAIVER 14
7.3 EFFECT OF WAIVERS OF DEFAULT 14
7.4 LANDLORD'S CURING AND ENFORCEMENT 14
7.5 LANDLORD'S DEFAULT 14
8.1 NOTICE 15
8.2 QUIET ENJOYMENT 15
8.3 LIMITATION OF LANDLORD'S LIABILITY 15
8.4 EXCUSABLE DELAY 15
8.5 APPLICABLE LAW AND CONSTRUCTION 15
8.6 RELOCATION 16
8.7 SECURITY DEPOSIT 16
9.1 BROKERS 16
10.1 LANDLORD'S FINANCING 17
2
64
LEASE BETWEEN: CONCORD OFFICE REALTY ASSOCIATES &
CAPITOL MULTIMEDIA, INC. DATED: 9/5/96
1.1 REFERENCE SUBJECTS. Each reference to any of the following
------------------------ subjects shall incorporate the following
information.
DATE: September 5, 1996
PREMISES: Portions of the Building described on
Exhibit A. The rentable area of the Premises
for purposes of this Lease is 5,443 Sq. Ft.
BUILDING: The building, including surrounding land,
parking areas and other appurtenances located
at:
000 Xxxxx Xxxxxx, Xxxxxxx, XX 00000
LANDLORD: Concord Office Realty Associates
ORIGINAL ADDRESS OF LANDLORD: X.X. Xxx 000, Xxxxxxx, XX 00000
LANDLORD'S MANAGING AGENT: Concord Property Management, Inc.
LEASE PAYMENTS: Rent checks should be made payable to:
Concord Office Realty Associates
TENANT: Capitol Multimedia, Inc.
ORIGINAL ADDRESS OF TENANT: 0000 Xxxxxxxxx Xxx., Xxxxx 000 Xxxx
Xxxxxxxx, XX 00000
TERM BEGINNING DATE: November 1, 1996
TERM ENDING DATE: October 31, 1999
ANNUAL BASE RENT: Annually Monthly
-------- -------
$100,695.50 $8,391.29
1
65
LEASE BETWEEN: CONCORD OFFICE REALTY ASSOCIATES &
CAPITOL MULTIMEDIA, INC. DATED: 9/5/96
BASE TAXES AND OPERATING
EXPENSE AMOUNT: $5.50 multiplied by the rentable area of the
Building of 52,281 Sq. Ft. ($287,545.50)
TENANT'S PERCENTAGE SHARE: 10.41%
PERMITTED USES: Office
SECURITY DEPOSIT: $8,391.29
PUBLIC LIABILITY INSURANCE: $2,000,000
BROKER: Concord Property Management, Inc.
Whittier Partners
APPENDICES RIDERS:
EXTENSION TERM RIDER
LANDLORD'S WORK RIDER
EXHIBITS: EXHIBIT A - Premises Sketch Plan
EXHIBIT B - Landlord Services
SPECIAL PROVISIONS: If Landlord is unable to provide premises
by 12/31/96 the Tenant may terminate lease
without penalty to Landlord.
2
66
LEASE BETWEEN: CONCORD OFFICE REALTY ASSOCIATES &
CAPITOL MULTIMEDIA, INC. DATED: 9/5/96
2.1 PREMISES AND TERM. Landlord leases to Tenant for the Term beginning on
the Beginning and Ending Dates in Section 1.1., and Tenant leases from Landlord,
the Premises together with the right to use with others subject to Landlord's
rules the common areas of the Building. Landlord reserves the right to install,
repair and relocate within the Premises pipes and other equipment, to make
additions to the Building and to relocate any common areas. IF Tenant occupies
any portion of the Premises prior to the Term Beginning Date, then the Term will
begin with such occupancy (and end on the Ending Date). Tenant accepts the
Premises in the condition they are now in, or may be in on the Commencement
Date, it being agreed that Landlord will have no obligation whatsoever except as
expressly set forth herein. Tenant acknowledges that neither Landlord nor any
agent of Landlord has made any representations or warranties express or implied
concerning the Premises or this Lease. If Landlord is unable to deliver
possession due to a holding over or other cause beyond its reasonable control,
then Tenant's sole remedy will be a proportionate abatement of Annual Base Rent
and additional rent based on the area not delivered until the same is delivered;
and the terms of this Lease (including the Ending Date) will not otherwise be
affected.
2.2 LANDLORD WORK. Except as otherwise expressly provided herein
("Landlord's Work"), Landlord will not be required to perform any work in
connection with Tenant's occupancy of the Premises. Landlord shall:
1) Paint the Premises
2) Shampoo carpets
If Landlord fails to deliver possession of the Premises at the Term
Beginning Date, the Landlord shall not be liable for any damages caused thereby,
nor shall this lease be void or voidable, but the Commencement Date shall be
extended and no rent shall be due until Landlord delivers possession. Provided,
however, that notwithstanding the fact that the Commencement Date has been so
extended, the Term Ending Date shall remain the same and all the other terms and
conditions of this Lease, including, without limitation, all dates and time
periods contained herein, shall also remain as stated herein. Notwithstanding
the foregoing, Landlord agrees that Landlord will deliver the Premises
substantially complete "or" substantial Completion" shall mean that Landlord's
improvements to the Premises as defined in Exhibit A have been completed with
the exception of minor punch list items which can be completed without
reasonable interference with the conduct of Tenant's business.
2.3 TENANT WORK. Tenant will be responsible for all work (other than
Landlord's Work, if any) including demolition, improvements and alterations, to
the Premises appropriate to Tenant's occupancy ("Tenant Work"), all of which is
subject to Landlord's prior written approval. No Tenant Work costing in excess
of $10,000 shall be done except in accordance with plans and specifications. The
identity of any contractor will also be subject to Landlord's prior written
approval. Tenant will procure all necessary governmental approvals and will
perform all Tenant Work in compliance with all applicable laws and in a
3
67
LEASE BETWEEN: CONCORD OFFICE REALTY ASSOCIATES &
CAPITOL MULTIMEDIA, INC. DATED: 9/5/96
good and workmanlike manner. Tenant will require its contractors to maintain
insurance and provide lien waivers as reasonably required by Landlord.
3.1 ANNUAL BASE RENT. Tenant covenants to pay Annual Base Rent to Landlord
in advance in equal monthly installments prior to the first day of each calendar
month during the Term at the amount(s) per annum stated in Section 1.1. Tenant
will make ratable payment of Annual Base Rent for any portion of a year in which
the same accrues, all payments to be in current U.S. exchange at the Original
Address of Landlord or such other place as Landlord may by notice in writing to
Tenant direct, without demand, set-off or deduction whatsoever.
3.2 ADDITIONAL RENT - TAXES AND OPERATING EXPENSES. Tenant covenants to pay
to Landlord, as additional rent, Tenant's Percentage Share of Base Taxes and
Operating Expenses in excess of the Base Taxes and Operating Expenses Amount for
each calendar year of Landlord included in the Term; such amount to be paid in
monthly installments in advance on the first day of each month in amounts
reasonably estimated by Landlord, and with a final payment adjustment between
the parties within 14 days after Landlord provides Tenant a statement of Taxes
and Operating Expenses for the calendar year. (For periods less than a full
fiscal year at the beginning and end of the Term, such amounts will be
respectively pro-rated.)
"Taxes" means all taxes, assessments, betterments, excises, user fees and
other governmental charges or payments in lieu thereof or voluntary payments
made in connection with the provision of governmental services or improvements
of benefit, incurred with respect to the Building (including personal property
taxes) or upon Landlord, other than a federal or state income tax of general
application. Landlord's Taxes also includes reasonable expenses, including fees
of attorneys and appraisers, incurred in connection with efforts to obtain
abatements or to assure maintenance of Taxes, whether or not successful and
whether or not such efforts involve filing of actual abatement applications.
"Operating Expenses" means all costs paid or incurred in operating,
maintaining, managing and repairing the Building including: (i) supplies,
materials and labor costs (including indirect and fringe benefits); (ii)
utilities including Tenant's electricity charge in section 1.1 and services
(including gas, electricity, water, sewer, snow removal, trash removal,
landscaping and parking maintenance and repair) and any other cost described in
Section 5.1; (iii) casualty, liability and other insurance expenses (including
the amount of any deductible in the event of an insured loss); (iv) management
fees which do not exceed those customarily paid with respect to buildings in the
area similar to the Building, and fees for testing, licenses or permits; and (v)
rental or reasonable depreciation of equipment used in the operation of the
Building. In addition, if Landlord replaces any existing improvements or
equipment or installs any new improvements or equipment to the Building
(including energy conservation improvement that will directly benefit Tenant by
reducing operating expenses), then the cost of such items amortized over their
reasonable life together with an imputed interest rate at the level then being
charged by institutional first mortgagees for permanent first mortgage loans on
buildings similar to the Building will be included in Operating Expenses. Costs
will be
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ascertained in accordance with generally accepted accounting principles,
including allowance for reasonable reserves, and allocated to appropriate fiscal
periods on the accrual method of accounting. If less than all of the Building is
occupied by tenants, or if Landlord is not supplying all tenants with the
services being supplied hereunder, then Operating Expenses will be reasonably
extrapolated by Landlord to determine Operating Expenses which would have been
incurred if the Building were fully occupied for such year and/or such services
were being supplied to all tenants, and such extrapolated amount will be deemed
to be the Operating Expenses for such period.
4.1 TENANT'S COVENANTS. Tenant will do the following, all at its sole cost:
4.1.1 MAINTENANCE. The Tenant agrees to maintain the leased premises in
good condition, damage by fire and other casualty only excepted, and if damaged
resultant of Tenant's negligence, to replace plate glass and other glass
therein, acknowledging that the leased premises are now in good order and the
glass whole. The Tenant shall not permit the leased premises to be overloaded,
damaged, stripped, or defaced, nor suffer any waste.
4.1.2 USE AND COMPLIANCE WITH LAW. Tenant will use the Premises
continuously only for the Permitted Uses and then only as permitted under
applicable laws, and will procure all governmental approvals. Tenant will keep
the Premises equipped with adequate safety appliances and comply with all
requirements of insurance rating bureaus. If Tenant's use of the Premises
results in any increase in the premium for any insurance carried by Landlord,
then upon notice Tenant will pay the same to Landlord as additional rent.
4.1.3 LIENS AND ENCUMBRANCES. Tenant will within 10 days commence to and
within 30 days remove any lien, notice of contract or other encumbrance of
Landlord's property or Tenant's leasehold which arises for any reason,
voluntarily or involuntarily, specifically caused by acts or omissions of
Tenant, its employees, vendors, or invited guests.
4.1.4 INDEMNITY. Upon assuming control of Premises, Tenant will assume all
tort liabilities incident thereto; and Tenant will indemnify, save harmless and
defend Landlord and its trustees, beneficiaries, partners, mortgagees, officers,
directors, employees, agents, independent contractors, invitees and other
persons acting under Landlord ("Indemnitees") from all liability, claim or cost
(including reasonable attorneys' fees of counsel of an Indemnitee's choice
against whom Tenant makes no reasonable objection) arising in whole or in part
out of any injury, loss, theft or damage (unless such is due solely and directly
to the negligence of Landlord or its employees) to any person or property while
on or about the Premises or out of any condition within the Premises or out of
any breach of any Lease covenant or from any act or omission of Tenant or
persons claiming under Tenant (or any of their agents, employees, independent
contractors or invitees).
4.1.5 LANDLORD'S RIGHT TO ENTER. Upon such notice if any as is reasonable
under the circumstances Landlord may enter the Premises for the purpose of
exercising any of its rights or protecting its property or of showing the
Premises to prospective purchasers or lenders,
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and during the last 12 months of the Term to prospective tenants (and may keep
affixed notices for letting and selling). Except in an emergency, Landlord will
be subject in entering to reasonable security conditions, if any, set forth in
writing to Landlord by Tenant.
4.1.6 PERSONAL PROPERTY AT TENANT'S RISK. All of the furnishings, trade
fixtures, equipment, effects and property which during the occupancy by Tenant
(or persons claiming under Tenant) may be on the Premises or elsewhere on
Landlord's property, shall be at the sole risk of Tenant. Except to the extent
damage is caused solely and directly by the negligence of Landlord or its
employees, Landlord will not be liable for damage to person or property
sustained by Tenant or any person claiming under Tenant.
4.1.7 OVERLOADING, NUISANCE, ETC. Tenant will not, either with or without
negligence, overload or otherwise damage Landlord's property or the Premises;
commit any nuisance; allow the release or other escape of any biologically or
chemically active or other toxic or hazardous substances so as to affect even
temporarily any element of Landlord's property or the Premises, or allow the
storage or use of such substances in any manner not sanctioned by law or by the
highest standards prevailing in the industry for the storage and use of such
substances; nor shall Tenant bring onto the Premises any such substances except
to use in the ordinary course of its business and then only after written notice
is given to Landlord of the identity of such substances; permit the occurrence
of objectionable noise or odors; or suffer any waste to Landlord's property or
the Premises. Hazardous substances include those described in any local, state
or federal law or regulations, including the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Resource Conservation and
Recovery Act, the Massachusetts Hazardous Waste Management Act and the
Massachusetts Oil and Hazardous Material Release Prevention Act. Tenant will
execute affidavits from time to time at Landlord's request concerning Tenant's
knowledge of hazardous substances on the Premises or Landlord's property. In all
events, Tenant will indemnify Landlord and its mortgagees in the manner
elsewhere provided from any release of hazardous substances on the Premises
occurring while Tenant is in possession or elsewhere due to any act or omission
of Tenant or persons claiming under Tenant (or any of their agents, employees,
independent contractors or invitees). (At the request of Landlord, Tenant will
confirm such indemnity directly with mortgagees.)
4.1.8 YIELD UP. At the expiration or earlier termination of the Term,
Tenant (and all persons claiming under it) will, without any notice surrender
the Premises (including all Tenant Work and equipment and fixtures used in
connection with Tenant's occupancy except such items as Landlord may direct to
be removed, which items shall then be removed by Tenant and the Premises
restored to their pre-existing condition) and all keys (or security system
codes), remove all of its property not bolted or otherwise attached to the
Premises (and such property bolted or attached to the Premises as Landlord may
direct), and all Tenant's signs wherever located, in each case repairing damage
which results from such removal and restoring the Premises to a fully functional
and tenantable condition (including filling of all floor holes, removal of all
disconnected wiring back to junction boxes and replacement of all damaged
ceiling tiles). Tenant shall yield up the Premises broom clean
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and in good order with allowance for reasonable wear and tear. Any property not
so removed will be deemed abandoned and may be removed and disposed of by
Landlord, and Tenant will pay to Landlord the cost of removal and disposition.
4.1.9 HOLDING OVER. If Tenant (or anyone claiming under Tenant) remains in
possession of any part of the Premises after the termination of the Term, then
Tenant will be deemed a tenant at sufferance, will thereafter pay prorated
Annual Base Rent at double the amount payable for the twelve month period
immediately preceding such termination, will pay all additional rent and will
perform all covenants and will also be liable for all damages, including
consequential damages.
4.1.10 ASSIGNMENT. Tenant will not assign this Lease, or sublet or license
any portion of the Premises (collectively, "transfer") without obtaining on each
occasion the prior written consent of Landlord. If the consideration, rent or
other charges payable to Tenant under any consent to transfer exceed the rent to
be paid hereunder (pro-rated based on floor area in the case of any occupancy of
less than the entire Premises), then Tenant shall pay to Landlord, as additional
rent, the amount of such excess when and as received. Tenant may deduct from
increase, the cost of any required Tenant fit up and associated brokerage.
Without limitation, any lump-sum payment or series of payments (including the
purchase of so-called leasehold improvements on account of any transfer) will be
deemed to be in excess of rent). Notwithstanding any consented to transfer of
this Lease, Tenant's (and any guarantor's) liability will remain direct and
primary. In the case of any requested consent, Tenant will deliver at the time
(i) a true and complete copy of the proposed instrument containing all of the
terms of the transfer, and (ii) a written agreement of the transferee agreeing
directly with Landlord jointly and severally with Tenant to observe all of the
terms of this Lease. Landlord may collect rent and other charges from such
transferee (and upon notice the transferee will pay the same directly to
Landlord) and apply the net amount collected to the rent herein. No consented to
transfer shall be deemed the acceptance of the transferee as a tenant or a
release of Tenant or any guarantor from direct and primary liability for this
Lease. Consent to any transfer will not relieve Tenant from obtaining consent to
any modification of the transfer or a further transfer, nor will Landlord's
consent alter the terms of this Lease, to which any transfer will always be
subject. The breach by Tenant of any covenant in this Section will be a default
for which there is no cure period. Tenant may assign lease to a directly related
entity of equal or greater worth with landlord's reasonable consent.
5.1 BUILDING SERVICES. Landlord will furnish, in addition to those services
in Exhibit B, the following, subject to the other provisions of this Lease as
outlined in Exhibit B.
5.1.1 LANDLORD'S REPAIR. Landlord will reasonably repair the foundations,
exterior walls, structural floors, non structural floors, plumbing, electrical,
roof, heating, ventilating and air conditioning systems, and common areas
(including elevators if any) of the Building insofar as such elements affect the
Premises; but in no event will Landlord repair glass, windows or doors of the
Premises if damaged by Tenant's negligence.
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5.1.2 OFFICE IDENTIFICATION. Landlord will provide at Tenant's expense
Tenant's name on entry doors to the Premises, all to be in Building standard
graphics. If Office Directories and outdoor signs are provided they shall be in
Building standard graphics with the cost being shared by Tenant on the basis of
the percentage share stated in 1.1.
5.1.3 GROUNDS MAINTENANCE. Landlord will reasonably maintain the grounds
and parking areas adjacent to the Building, including snow removal.
5.1.4 ELEVATOR, HEAT AND AIR CONDITIONING, WATER. Landlord will: (i)
provide, elevator service 24 hours each day. (ii) furnish heat and air
conditioning during the normal heating and cooling season on business days; and
(iii) provide hot and cold water for domestic purposes. If Tenant requires
additional air conditioning and/or electricity for business machines, meeting
rooms or other purposes, or because of occupancy or unusual electrical loads
beyond normal office use including lights, typewriters, personal computers and
coffee machines, and additional air conditioning units, chillers, condensers,
compressors, ducts, piping and other equipment will be installed and maintained
by Landlord at Tenant's sole cost, including a separate electrical meter, but
only to the extent that the same are compatible with the Building and its
mechanical systems. Landlord shall supply tenant electric for normal office use
including lights, typewriters, coffee machine and personal computers not
requiring additional air conditioning. Landlord may institute reasonable rules
for the conservation of energy.
5.2 INTERRUPTIONS. Landlord will not be liable in damages or by reduction
of rent for inconvenience or loss of business arising from its exercising any
rights or performing any duty, or on account of any delay described in Section
8.4; nor will the same give rise to a claim of constructive eviction. In case of
emergency, Landlord reserves the right to stop any service or utility when
necessary.
6.1 TENANT'S INSURANCE. Tenant will maintain comprehensive public liability
insurance naming Landlord and if requested Landlord's mortgagees, as additional
insureds in an amount at least equal to the amount set forth in Section 1.1.
Such insurance will provide that it will not be canceled, terminated or changed
except after at least 30 days prior written notice to Landlord (and its
mortgagees). The policy or certificates will be deposited with Landlord at the
beginning of the Term, and renewals will be so deposited not less than 30 days
prior to expiration. Any insurance carried by Tenant with respect to the
Premises will include provisions denying the insurer subrogation rights against
Landlord, and Tenant waives any claim against Landlord for injury or loss
covered by its insurance.
6.2 DAMAGE OR DESTRUCTION OF PREMISES. If through no act or neglect of
Tenant (or persons acting under Tenant) any part of the Premises are damaged by
fire or other insured casualty, then Landlord will proceed with diligence,
subject to then applicable laws and to insurance proceeds being received and
made available by mortgagees, to repair such damage, excluding any items which
Tenant is permitted to remove upon expiration (which items will be Tenant's
responsibility to repair.) If any substantial part (meaning more than 25% of
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insurable value) of the Premises or the Building (even if not including any
portion of the Premises) are damaged by casualty, or if any casualty occurs to
the Premises during the last year of the Term and its repair will reasonably
cost in Landlord's opinion more than $10,000, then at Landlord's election the
Term of this Lease may be terminated by written notice to Tenant within six (6)
months following adjustment of the casualty loss. Tenant will be entitled to a
just abatement of Annual Base Rent so long as such damaged was not caused by its
(or such persons') act or neglect. If any mortgagee refuses without fault by
Tenant (or such persons) to permit insurance proceeds to be applied to repair of
the Premises and Landlord has not otherwise commenced such repair within six
months following adjustment of the casualty loss, then Tenant may until any such
replacement commences terminate this Lease by giving at least thirty days prior
written notice to Landlord. Except as provided in this paragraph, Tenant's
obligation to pay all rent and to perform all other terms of this Lease will not
be affected by any casualty.
6.3 EMINENT DOMAIN. If all or any substantial part of the Premises or the
Building (meaning in either case more than 25% of floor area) are taken by power
of eminent domain, then by written notice given to the other within six months
following such taking the Term of this Lease may be terminated at either
Landlord's or Tenant's election. If this Lease is not so terminated then
Landlord will within a reasonable time diligently restore what may remain of the
Premises (excluding any items which Tenant is permitted to remove upon
expiration) to a tenantable condition and Annual Base Rent will be equitably
adjusted.
7.1 EVENTS OF DEFAULT. If Tenant fails to pay Annual Base Rent, additional
rent or any other sum when due and such default continues for ten days after
notice is given; or if more than two default notices are properly given in any
twelve month period, or if Tenant vacates substantially all of the Premises, or
if Tenant (or any transferee of Tenant) makes any transfer of the Premises in
violation of this Lease, or if a petition is filed by Tenant (or any transferee
or guarantor) for insolvency or for appointment of a receiver, trustee or
assignee or for adjudication, reorganization or arrangement under any bankruptcy
act or if any similar petition is filed against Tenant (or any transferee or
guarantor) and such petition is not dismissed within thirty days thereafter, or
if any representation or warranty made by Tenant is untrue in any material
respect, or if Tenant fails to perform any other covenant or condition hereunder
and such default continues longer than any period expressly provided for the
correction thereof (and if no period is expressly provided then for fifteen days
after notice is given, provided, however, that such fifteen day period shall be
reasonably extended in the case of a non-monetary default if the matter
complained of can be cured but the cure cannot be completed within such period
and Tenant begins promptly and thereafter diligently completes the cure; but if
such matters cannot be cured then there will be no cure period), then, and in
any such case, Landlord and its agents lawfully may, in addition to any remedies
for any preceding breach, immediately or at any time thereafter, without demand
or notice and with or without process of law, enter upon any part Premises in
the name of the whole or mail or deliver a notice of termination of the Term of
this Lease addressed to Tenant at the Premises or at any other address herein,
and thereby terminate the Term and repossess the Premises as of Landlord's
former estate. At Landlord's election such notice of termination
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may be included in any notice of default. Upon such entry or mailing the Term
shall terminate, all executory rights of Tenant and all obligation of Landlord
will immediately cease, and Landlord may expel Tenant and all persons claiming
under Tenant and remove their effects without any trespass and without prejudice
to any remedies for arrears of rent or prior breach; and Tenant waives all
statutory and equitable rights to its leasehold (including rights in the nature
of further cure or redemption, if any). If any payment of Annual Base Rent,
additional rent, or other sum is not paid when due, then Landlord may at its
option in addition to all other remedies hereunder impose an administrative late
charge on Tenant equal to 5% of the amount in question, which late charge will
be due upon demand as additional rent.
Rent forgivenesses, allowances for (and/or Landlord expenses in designing and
constructing) Tenant initial finish work and leasehold improvements to ready the
Premises for Tenant's occupancy and the like (collectively "Tenant
Inducements"), if any, have been agreed to by Landlord as inducements for Tenant
faithfully to perform all of its obligations. For all purposes, upon the
occurrence of any default and the lapse of the applicable cure period, if any,
any Tenant Inducements shall be deemed void as of the date hereof as though such
had never been included, and the aggregate amounts (or value) thereof will be
deemed to be additional rent then immediately due. The foregoing will occur
automatically without any further notice by Landlord, whether or not the Term is
then or thereafter terminated and whether or not Tenant thereafter corrects such
default.
If the Term is terminated for default, the Tenant covenants, as an additional
cumulative obligation after such termination, to pay all of Landlord's
reasonable costs, including attorneys fees, related thereto and in collecting
amounts due and all reasonable expenses in connection with reletting, including
tenant inducements, brokerage commissions, fees for legal services, expenses of
preparing the Premise for reletting and the like ("Reletting Expenses"). It is
agreed that Landlord may (i) relet the Premises or part or parts thereof for a
term or terms which may be equal to, less than or exceed the period which would
otherwise have constituted the balance of the Term, and may grant such tenant
inducements, including free rent, as Landlord in its sole discretion considers
advisable, and (ii) make such alterations to the Premises as Landlord in its
sole discretion considers advisable, and no failure to relet or to collect rent
under any reletting shall operate to reduce Tenant's liability. Any obligation
to relet imposed by law will be subject to Landlord's reasonable objectives of
developing its property in a harmonious manner with appropriate mixes of
tenants, uses, floor areas, terms and the like Landlord's Reletting expenses
together with all other sums provided for whether incurred prior to or after
such termination will be due upon demand.
If the Term of this Lease is terminated for default, then unless and until the
Landlord elects lump sum liquidated damages described in the next paragraph
below, Tenant covenants, as an additional cumulative obligation after any such
termination, to pay punctually to Landlord all the sums and perform all of its
obligations in the same manner as if the Term had not been terminated. In
calculating such amounts Tenant will be credited with the net proceeds of any
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rent then actually received by Landlord from a reletting of the Premises after
deducting all sums to be paid by Tenant and not then paid.
If this Lease is terminated for default, then Tenant covenants, as an additional
cumulative obligation after termination, to pay forthwith to Landlord at
Landlord's election made by written notice at any time after termination, as
liquidated damages a single lump sum payment equal to the sum of (i) all sums to
be paid by Tenant and not then paid at the time of such election, plus (ii) the
excess of all of the rent reserved for the residue of the Term (with additional
rent on account of Taxes and Operating Expenses deemed to increase 10% in each
year on a compounding basis) over all of the rent which Tenant shows by clear
and convincing evidence will be received on account of reletting the Premises
during such period, which rent will be reduced by reasonable projections of
vacancies and by Landlord's Reletting expenses to the extent not then paid to
Landlord.
7.2 REMEDIES CUMULATIVE; JURY WAIVER. All rights and remedies of Landlord
will be cumulative. Landlord and Tenant each waive trial by jury in any summary
proceeding or in any action based on non-payment of rent; and Tenant further
agrees that it will not interpose any counterclaim or set-off in any such
proceeding.
7.3 EFFECT OF WAIVERS OF DEFAULT. Any consent or waiver by Landlord to any
act or omission which otherwise would be a default will only be done in writing
and will not be deemed to permit other similar acts or omissions. The failure to
seek redress for any default or the receipt of rent with knowledge of any
default will never be deemed a consent to or waiver of such default. Delivery of
keys or rent to Landlord following any default will not be deemed an acceptance
of surrender of the Premises or a waiver of the default. No acceptance by
Landlord of a lesser sum than the amount then due will be deemed to be other
than an account of the earliest installment of such amount due; nor shall any
endorsement on any check be deemed an accord and satisfaction, and Landlord may
negotiate such check without prejudice to recovering the balance due.
7.4 LANDLORD'S CURING AND ENFORCEMENT. If any default by Tenant continues
after any applicable cure period, then Landlord without waiving its claim may
cure such default for the account of Tenant, and any cost incurred will be
reimbursed by Tenant, together with an administrative charge of fifteen per cent
of the amount thereof, on demand as additional rent. Tenant will pay on demand
as additional rent all costs, including such administrative charge and
reasonable attorneys' fees, incurred in enforcing this Lease. Without limiting
any of its other rights, any sum due will bear interest from the date due at one
and one-half per cent for each month (or ratable portion thereof) the same
remains unpaid.
7.5 LANDLORD'S DEFAULT. In no event will Landlord be in default unless
notice has been given to it and it fails to perform within thirty days
(provided, however, that such thirty day period will be reasonably extended if
Landlord begins curing within such period and diligently pursues, or if any
mortgagee notifies Tenant within such period that it intends to cure on behalf
of Landlord and thereafter diligently pursues such cure).
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8.1 NOTICE. All notices will be in writing and will be deemed duly given if
mailed by certified mail, postage prepaid, addressed, if to Tenant, at the
Original Address of Tenant or such other address as Tenant shall have last
designated by notice in writing to Landlord and, if to Landlord, at the Original
Address of Landlord or such other address as Landlord shall have last designated
by notice in writing to Tenant. Any notice so sent will be deemed duly given on
the second business day following the say of such mailing.
8.2 QUIET ENJOYMENT. Upon Tenant's paying all rent and performing all
covenants, it may peaceably and quietly enjoy the Premises during the Term
without disturbance by Landlord, subject always to the terms of this Lease,
provisions of law and rights of record to which this Lease is or may become
subordinate.
8.3 LIMITATION OF LANDLORD'S LIABILITY. Landlord will be liable only for
defaults occurring while it is owner of the fee of which the Premises are a
part. Tenant (and all persons claiming under Tenant) agrees to look solely to
Landlord's interest from time to time in the fee of which the Premises are a
part for satisfaction of any claim or recovery of any judgment from Landlord; it
being agreed that neither Landlord nor any trustee, beneficiary, partner,
officer, director, employee or agent of Landlord will every be personally or
individually liable to Tenant (or such persons). In no event will Landlord ever
be liable to Tenant (or such persons) for indirect or consequential damages.
8.4 EXCUSABLE DELAY. In any case where either party is required to do any
act (other than the payment of Annual Base Rent, additional rent or any other
sum), delays resulting from war, civil commotion, fire flood or other casualty,
labor difficulties, unavailability of labor, materials, equipment, energy or
utility services, unusually severe weather, or other causes beyond such party's
reasonable control will not be counted in determining the time during which such
act is to be completed.
8.5 APPLICABLE LAW AND CONSTRUCTION. This Lease may be executed in
counterpart copies and will be construed as a sealed instrument under the laws
of The Commonwealth of Massachusetts. If any provision is to any extent be
invalid, the remainder will not be affected. Other than contemporaneous
instruments executed and delivered of even date if any, this Lease contains all
of the agreements between Landlord and Tenant with respect to the Premises and
supersedes all prior dealings. This Lease may be amended only by an instrument
in writing executed by Landlord and Tenant. The enumeration of specific examples
of a general provision will not be construed as a limitation of the general
provision. Unless a party's approval or consent is required by its terms not to
be unreasonably withheld, such approval or consent may be withheld in the
party's sole discretion. If Tenant is granted any extension or other option,
time is of the essence and the exercise thereof must be unconditional. The
submission of a form of this Lease or a summary of its terms will not constitute
an offer, and the parties will only be bound when this Lease is executed and
delivered by both. Within one week of either party's request, each agree in
favor of the other,
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to execute, acknowledge and deliver a statement in writing certifying as to
matters under this Lease.
8.7 SECURITY DEPOSIT. On execution, Tenant will pay the Security Deposit
amount specified in Section 1.1. The Security Deposit may be mingled with other
funds and no fiduciary relationship will be created, nor will Landlord be liable
to pay interest thereon. If Tenant defaults then Landlord may, but will not be
required, to apply the Security Deposit to the extent necessary to cure the
default, and Tenant will reinstate such Security Deposit to the original amount
upon demand. Within 30 days after the expiration or earlier termination of the
Term the Security Deposit, to the extent not applied, will be returned to the
Tenant.
9.1 BROKERS. Tenant warrants to Landlord that it has not dealt with any
broker (other than Landlord's Agent and the person identified as the Broker in
Section 1.1, if any) in connection with the Premises, and agrees to indemnify
Landlord from any breach of this warranty. The fees of Landlord's Agent (and any
Broker named in Section 1.1) will be paid by Landlord.
10.1 LANDLORD'S FINANCING. Tenant agrees that its rights will be
subordinate to present or future mortgages and to all advances thereunder and
all modifications, renewals, replacements, extensions and consolidations
thereof. Tenant agrees that any mortgagee may at its option elect to subordinate
to this Lease. Until a mortgagee forecloses Landlord's equity of redemption, no
mortgagee will be liable for failure to perform any of Landlord's obligations
(and such mortgagee will thereafter be liable only after it succeeds to and
holds Landlord's fee interest and then only as limited herein). No mortgagee
will be bound by any payment of rent more than one month in advance. Tenant will
if requested by Landlord or any mortgagee give notice of any default by Landlord
to such mortgagee; and Tenant agrees that such mortgagee will have a separate,
consecutive reasonable cure period of no less than thirty days (to be reasonably
extended in the same manner as Landlord's cure period) following Landlord's cure
period during which such mortgagee may, but need not, cure such default. If
Landlord assigns this Lease or the rents, whether the assignment is conditional
in nature or otherwise such assignment will not be deemed an assumption by the
assignee of any obligations of Landlord; but the assignee will be responsible
only for Landlord's defaults which occur after it succeeds to and only while it
holds Landlord's fee interest in the Premises. The provisions of this Section
will be self-operative; nevertheless, Tenant agrees to execute, acknowledge and
deliver any subordination or other instruments conforming to
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these provisions whenever requested by Landlord or any mortgagee, and further
agrees that its failure to do so within ten days after demand will be default
without further cure period.
WITNESS the execution hereof under seal as of the date first set forth above.
TENANT: Capitol Multimedia, Inc. LANDLORD: Concord Office Realty Assoc.
BY: /s/ Xxxx Xxxxxxx BY: /s/ Xxxxx X. Xxxxxx
------------------------ ----------------------------
Xxxx Xxxxxxx Xxxxx X. Xxxxxx
President General Partner
DATE: 9/5/96 9/5/96
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EXHIBIT J
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FORM OF SOFTWARE ASSIGNMENT AND ASSUMPTION AGREEMENT
This SOFTWARE ASSIGNMENT AND ASSUMPTION AGREEMENT is effective as of the
16th day of April, 1997, by and between CAPITOL MULTIMEDIA, INC., a Delaware
corporation, ("Assignor") and DAVIDSON & ASSOCIATES, INC., a California
corporation ("Assignee"), with reference to the following facts:
A. Assignor and Assignee are parties to that certain Asset and Stock
Purchase Agreement, effective as of April 16, 1997 (the "Agreement").
B. In connection with the transactions contemplated by the Agreement,
Assignor shall transfer to Assignee all of Assignor's right, title and interest
as licensee in and to all license agreements pursuant to which Assignor is
permitted to use the Third Party Software (as that term is defined in the
Agreement) (the "Software Licenses"), and Assignee shall assume all of
Assignor's responsibilities and obligations as licensee thereunder which arise
after the date hereof.
In consideration of the foregoing recitals and the mutual covenants
contained herein and in the Agreement, Assignor and Assignee hereby agree as
follows:
1. Effective as of the date hereof, Assignor hereby assigns, transfers,
sets over unto Assignee all of the right, title and interest of Assignor as
licensee in, to and under the Software Licenses, to have and to hold the same
unto Assignee, its successors and assigns, for the remainder of the term and
renewal terms, if any, referred to therein.
2. Assignee hereby covenants and agrees with Assignor that it accepts and
assumes and agrees to pay, perform, observe and discharge all of the covenants,
conditions, agreements, terms and obligations on the part of licensee to be
performed under the Software Licenses accruing from and after the date hereof.
3. This Software Assignment and Assumption Agreement is subject to all
the terms, representations, warranties, covenants and conditions contained in
the Agreement.
4. Assignor hereby indemnifies and agrees to defend and hold Assignee
harmless from and against all costs (including reasonable attorney's fees),
claims, suits, and damages arising from the Software Licenses occurring prior to
the date hereof.
79
5. Assignee hereby indemnifies and agrees to defend and hold Assignor
harmless from and against all costs (including reasonable attorney's fees),
claims, suits, and damages arising from the Software Licenses occurring from and
after the date hereof.
6. Assignor agrees to execute and deliver such other or further
instruments of transfer or assignment as Assignee may reasonably require to
confirm the foregoing, or as may be otherwise reasonably requested by Assignee
to carry out the intent and purposes hereof.
7. This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same document.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
ASSIGNOR:
CAPITOL MULTIMEDIA, INC.
By: /s/ Xxxx Xxxxxxx
-----------------------------
Name: Xxxx Xxxxxxx
Title: Chairman and CEO
ASSIGNEE:
DAVIDSON & ASSOCIATES, INC.
By: /s/ Xxxxxxxx X. Xxxxx
-----------------------------
Name: Xxxxxxxx X. Xxxxx
Title: President
2
80
Exhibit K
Stock Assignment
----------------
FOR VALUE RECEIVED, Capitol Multimedia, Inc., a Delaware corporation, the
undersigned hereby sell, assign and transfers 1,000 shares of the capital stock
of ZAO, AMI, unto Davidson & Associates, Inc., which stock is standing in the
name of Capitol Multimedia, Inc. on the books and record of Capitol Multimedia,
Inc. represented by Certificate No. AOL-1740, and do hereby irrevocably
constitute and appoint, Xxxxx Xxxxx as attorney-in-fact to transfer the said
stock on the books of the company with full power of substitution in the
premises.
Dated: 4/16/97
BY: Capitol Multimedia, Inc.
By: /s/ Xxxx Xxxxxxx
Title: Chairman and CEO
81
Schedule 1.1 - Purchased Assets
Part 1 - Machinery and Capital Equipment
ADMIN/
DECAL # MAKE MODEL SN PRODUCTION LOCATION COMMENTS
--------------------------------------------------------------------------------------------------------------------------------
1029 Electro Mechanical Concepts 9606500001 P 2 P120/16/1Gig
--------------------------------------------------------------------------------------------------------------------------------
1031 TCP P120 13846 P 3 P120/16/1Gig
--------------------------------------------------------------------------------------------------------------------------------
1178 NEC Notebook PC-6220-91753 67004816 P 4 P130/16/.5Gig w/CD-ROM/EX. BAT
--------------------------------------------------------------------------------------------------------------------------------
1187 Micron Millennia Plus P 4 P150/32M/1Gig
--------------------------------------------------------------------------------------------------------------------------------
1039 Nikon LS-3510AF 211887 P 6 Slide Scanner
--------------------------------------------------------------------------------------------------------------------------------
1040 UMAX UC630 P 6 Color Scanner
--------------------------------------------------------------------------------------------------------------------------------
1043 Electro Mechanical Concepts P5120020111210 P 6 P120/16/1Gig
--------------------------------------------------------------------------------------------------------------------------------
1045 Micron Millennia Plus P 7 P120/32/1Gig
--------------------------------------------------------------------------------------------------------------------------------
1095 Urei LA-22 908 P 9 Compressor
--------------------------------------------------------------------------------------------------------------------------------
1103 Xxxxxx A-80 ZD74389H P 9 MIDI Keyboard Interface
--------------------------------------------------------------------------------------------------------------------------------
1104 Korg WS-AD 300565 P 9 Wavestation AD
--------------------------------------------------------------------------------------------------------------------------------
1105 Beyerdynamic MC740N(C)P48 16199 P 9 MicroPhone
--------------------------------------------------------------------------------------------------------------------------------
1106 Xxxxxx TLM193 1225 P 9 MicroPhone
--------------------------------------------------------------------------------------------------------------------------------
1108 Whisper Room P 9 Sound Booth
--------------------------------------------------------------------------------------------------------------------------------
1135 Sony PVM-1344Q 2004160 P 10 13" Monitor
--------------------------------------------------------------------------------------------------------------------------------
1136 JVC BRS800-U 10910116 P 10 SVHS Recorder
--------------------------------------------------------------------------------------------------------------------------------
1137 JVC BRS500-U 10910086 P 10 SVHS Player
--------------------------------------------------------------------------------------------------------------------------------
1138 JVC RM-G800 10910255 P 10 Edit Controller
--------------------------------------------------------------------------------------------------------------------------------
1139 Korg 01R/W 500242 P 10 Keyboard
--------------------------------------------------------------------------------------------------------------------------------
1144 Tascam DA-60 30181 931 P 10 DAT Deck
--------------------------------------------------------------------------------------------------------------------------------
1146 Soundcraft Delta P 10 Large Mixer
--------------------------------------------------------------------------------------------------------------------------------
1152 Sony BVE-800 10351 P 11 Edit Controller
--------------------------------------------------------------------------------------------------------------------------------
1154 Sony DPS-R7 800107 P 11 Digital Reverb
--------------------------------------------------------------------------------------------------------------------------------
1159 DigiDesign 888 Audio Interface P 11 Audio Interface
--------------------------------------------------------------------------------------------------------------------------------
1023 Toshiba 1710 HI1237254 P 14 PhotoCopier
--------------------------------------------------------------------------------------------------------------------------------
1025 TCP P-120 11690 P 14 P120/16/1Gig
--------------------------------------------------------------------------------------------------------------------------------
1027 HP C2040A (4MP) USCB004179 P 14 Production Laser Printer
--------------------------------------------------------------------------------------------------------------------------------
1015 Seagate ST12400N P 15 1 Gigabyte HD in enclosure
--------------------------------------------------------------------------------------------------------------------------------
1060 Zeos Pantera 10152851 P 15 P90/40/16Gig (Capture PC)
--------------------------------------------------------------------------------------------------------------------------------
1068 Sony PVM-1944Q 2001153 P 15 13" Monitor
--------------------------------------------------------------------------------------------------------------------------------
1070 Sony PVW2800 12702 P 15 Betacam Recorder
--------------------------------------------------------------------------------------------------------------------------------
1072 Sony BVW15 10167 P 15 Betacam Player
--------------------------------------------------------------------------------------------------------------------------------
1073 TimeLine 910 P 15 MicroLynx Systems Unit
--------------------------------------------------------------------------------------------------------------------------------
1074 Nova 950 13178 P 15 Transcoding Time Base Corrector
--------------------------------------------------------------------------------------------------------------------------------
1075 Grass Valley Group P 15 Distribution Amp
--------------------------------------------------------------------------------------------------------------------------------
1076 Grass Valley Group CV20 P 15
--------------------------------------------------------------------------------------------------------------------------------
1078 Tektronix TSG-300 B031979 P 15 Signal Generator
--------------------------------------------------------------------------------------------------------------------------------
1080 DigiDesign 888 Audio Interface A04115 P 15 Audio Interface
--------------------------------------------------------------------------------------------------------------------------------
1082 DigiDesign 888 Audio Interface A002362 P 15 Audio Interface
--------------------------------------------------------------------------------------------------------------------------------
1167 Apple Quadra 700 P 15 (Neptune)
--------------------------------------------------------------------------------------------------------------------------------
1172 Magni WFM 560 29080737 P 16 Waveform Monitor
--------------------------------------------------------------------------------------------------------------------------------
1118 HP C2009A USFB378883 P 25 HP LaserJet 4Si
--------------------------------------------------------------------------------------------------------------------------------
1052 Micron Millennia Plus P 8a P120/32/2Gig
--------------------------------------------------------------------------------------------------------------------------------
1054 Micron Millennia Plus P 8b P120/32/2Gig
--------------------------------------------------------------------------------------------------------------------------------
1057 TCP P 8b P120/16/1Gig
--------------------------------------------------------------------------------------------------------------------------------
1058 PlayWrite CDR-4000 P 8c CD-ROM Recorder
--------------------------------------------------------------------------------------------------------------------------------
1059 Alea Systems CD-Maker 95/26/UD251 P 8c CD Copier
--------------------------------------------------------------------------------------------------------------------------------
Non-Decaled
Protools Interface Cards (3)
Installed in Audio MACs
82
Schedule 1.1 -Purchased Assets
Part 1 - ZAO, AMI - Machinery and Capital Equipment
----------------------------------------------------------------
N NAME CPU RAM HDD
----------------------------------------------------------------
1 Ambra 486 DX 50 8Mb 410Mb
----------------------------------------------------------------
2 Ambra 486 SX 25 8Mb 240Mb
----------------------------------------------------------------
3 AST 486 SX 33 8Mb 210Mb
----------------------------------------------------------------
4 CDI
----------------------------------------------------------------
5 CDI
----------------------------------------------------------------
6 CDI
----------------------------------------------------------------
7 CDI
----------------------------------------------------------------
8 Compaq 486 DX 33 8Mb 410Mb
----------------------------------------------------------------
9 Electromechanical Concept Pentium 120 32Mb 4Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 32Mb 4Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 32Mb 2Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 32Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 32Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 24Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 24Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 24Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 24Mb l,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 24Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 24Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 24Mb 1,6Gb
----------------------------------------------------------------
# Electromechanical Concept Pentium 120 16Mb 1,6Gb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 8Mb 350Mb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 8Mb 350Mb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 8Mb 350Mb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 8Mb 350Mb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 8Mb 350Mb
----------------------------------------------------------------
# Gateway 2000 486 DX2/50 16Mb 425Mb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 16Mb 410Mb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 16Mb 350Mb
----------------------------------------------------------------
# Gateway 2000 486 DX 33 16Mb 350Mb
----------------------------------------------------------------
# Gateway 2000 486 DX2/50 12Mb 410Mb
----------------------------------------------------------------
# MAC
----------------------------------------------------------------
# MAC
----------------------------------------------------------------
# MAC
----------------------------------------------------------------
# MAC
----------------------------------------------------------------
# MAC
----------------------------------------------------------------
# Micron Millennia Plus Pentium 133 32Mb 4Gb
----------------------------------------------------------------
# Micron Millennia Plus Pentium 120 32Mb 4Gb
----------------------------------------------------------------
# Micron Millennia Plus Pentium 133 32Mb 4Gb
----------------------------------------------------------------
# NetPowerSymetra PPro 200*2 128Mb 2Gb
----------------------------------------------------------------
# No Brand 486 DX 40 8Mb 240Mb
----------------------------------------------------------------
# No Brand 486 DX 40 8Mb 240Mb
----------------------------------------------------------------
# Notebook Toshiba 486 SX 33 8Mb 120Mb
----------------------------------------------------------------
# Notebook ZEOS Pentium 75 16Mb 800Mb
----------------------------------------------------------------
# Packard Xxxx 486 SX 25 8Mb 210Mb
----------------------------------------------------------------
# Packard Xxxx 486 SX 25 8Mb 210Mb
----------------------------------------------------------------
# Packard Xxxx 486 DX2/66 16Mb 410Mb
----------------------------------------------------------------
# Packard Xxxx 486 DX2/66 12Mb 410Mb
----------------------------------------------------------------
# PIONEX 486 DX 50 8Mb 510Mb
----------------------------------------------------------------
# XXXXXX 000 XX 00 0Xx 000Xx
----------------------------------------------------------------
Page 1
83
----------------------------------------------------------------
# PIONEX 486 DX 50 16Mb 410Mb
----------------------------------------------------------------
# PIONEX 486 DX 50 16Mb 410Mb
----------------------------------------------------------------
# TCP 486 DX2/66 16Mb 410Mb
----------------------------------------------------------------
# TCP 486 DX2/66 16Mb 410Mb
----------------------------------------------------------------
# TCP 486 DX2/66 16Mb 4l0Mb
----------------------------------------------------------------
# TCP Pentium 120 16Mb 1Gb
----------------------------------------------------------------
# TCP Pentium 120 16Mb 1Gb
----------------------------------------------------------------
# ZEOS 486 DX2/66 8Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 8Mb 425Mb
----------------------------------------------------------------
# ZEOS Pentium 66 16Mb 520Mb
----------------------------------------------------------------
# ZEOS Pentium 66 16Mb 520Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
# ZEOS 486 DX2/66 16Mb 425Mb
----------------------------------------------------------------
Page 2
84
SCHEDULE 1.1 - PURCHASED ASSETS
PART 2 - AGREEMENTS, CONTRACTS AND LEASES
1. WORK-FOR-HIRE AGREEMENT WITH BLIZZARD ENTERTAINMENT DATED APRIL 1, 1996.
2. REAL PROPERTY LEASE AGREEMENT FOR 000 XXXXX XXXXXX, XXXXX 000, XXXXXXX,
XXXXXXXXXXXXX, XXXXXX XXXXXX (SEE EXHIBIT F)
3. REAL PROPERTY LEASE AGREEMENT FOR 0 XXXXXXXXXXXXXXX, XX. XXXXXXXXXX, XXXXXX
4. LEXINGTON SECURITY ALARM AGREEMENT (12/12/96)
5. XXXX XXXXXXX'X EMPLOYMENT AGREEMENT
6. XXXX XXXXXXXXX'X EMPLOYMENT AGREEMENT
85
Schedule 1.1 - Purchase Assets
Part 3 - Third Party Software
MAC/ Loca- Transfer- Transfer
Manufacturer Product SN Ver. Licence WIN tion able Completed Commentsed
------------------------------------------------------------------------------------------------------------------------------
Adobe Illustrator AAW3201022288 3.2 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Illustrator AAW3201029313 3.2 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop SPW250R3133938-439 3.0 X W 15 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA100001276-289 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA107001723-857 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201105018-327 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201105120-175 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201105121-550 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201105145-424 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201107278-151 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201107287-963 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201111115-517 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PCA201112764-295 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PGW201116597-281 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PSW251R3103596-278 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PSW251R3121582-663 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PSW251R7109758-404 3.0 M X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PWW250R3104484-284 3.0 W X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Photoshop PWW300R1158867-796 3.0 X W X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere MBW101R3110767-679 4.0 W 15 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere MBW100R3103042-566 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere PRW100101227-775 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere PRW100101256-961 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere PRW300106957-599 4.0 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere PRW300R3112209 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere PRW300R3112209-863 X / /
------------------------------------------------------------------------------------------------------------------------------
Adobe Premiere PRW300R3112366 X / /
------------------------------------------------------------------------------------------------------------------------------
Aldus PageMaker 00-0000-000000000 5.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Astarte Toast CD-ROM Pro 3 XX-XX0XXX-
00X00X-XX0 3.0 X W 8a X / /
------------------------------------------------------------------------------------------------------------------------------
Asymetrix Digital Video
Producer 3.0 W 15 / /
------------------------------------------------------------------------------------------------------------------------------
Autodesk 3D Studio Max 660-99032882 1.2 X W SP X / /
------------------------------------------------------------------------------------------------------------------------------
Autodesk Animator Studio 650-10073787 1.1 X W SP X / / Hardware Doggle
------------------------------------------------------------------------------------------------------------------------------
Autodesk Bones Pro Max 312-00546 X W SP X / / Hardware Doggle
------------------------------------------------------------------------------------------------------------------------------
Autodesk Character Studio 660-99010753 X W SP X / / Hardware Doggle
------------------------------------------------------------------------------------------------------------------------------
CeQuadrat Win On CD to Go 00246-46094059r 1.40 W 15 / /
------------------------------------------------------------------------------------------------------------------------------
Cheyenne ArcServe Enterprise KITL-C14XX-
XX9LC-R7MC 6.0 W 15 / / sn #10023851
------------------------------------------------------------------------------------------------------------------------------
Claris FileMaker Pro 0007011342 3.0 X W 14 X / /
-----------------------------------------------------------------------------------------------------------------------------
Claris FileMaker Pro 0007004885 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Claris FileMaker Pro 0007045542 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Claris FileMaker Pro 0007068582 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Claris FileMaker Pro 0007069127 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Claris FileMaker Pro 0007069128 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Claris FileMaker Pro 0007069420 3.0 X M X / /
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect U4000014159 3.0 X M 9 X / /
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect U4000015176 3.0 X M 10 X / /
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect U5100007756 3.0 X M 11 X / /
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-1 3.0 X M 15 X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-10 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-2 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
86
Schedule 1.1 - Purchase Assets
Part 3 - Third Party Software
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-3 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-4 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-5 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-6 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-7 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-8 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Dantz Retrospect Remote 8XQP-6PUL-Q9XD-9 3.0 X M X / / Registration # u5100007756
------------------------------------------------------------------------------------------------------------------------------
Digidesign DINR MS091-UD-1.1,
DINR0470 1.1 M 10 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign D-Verb DV02782 1.02 M 9 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign D-Verb DV02558 1.02 X M 10 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign D-Verb DV001728 1.02 M 11 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign ProTools M09491 3.1 X M 9 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign ProTools 12855 3.2 M 10 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign ProTools MO7892 3.1 M 10 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign ProTools 1221 3.1 M 11 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign ProTools 13694 3.2 M 11 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign ProTools MO2053 3.0 M 11 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign SoundDesigner II 2.8 M 9 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign SoundDesigner II M012294 2.8 X M 10 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign SoundDesigner II SD4057 2.8 M 11 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign TDM M06722 1.2 X M 9 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign TDM M05068 1.2 M 10 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign TDM 1392 1.2 M 11 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Digidesign TDM M01889 1.1 M 11 X / / Requires Hardware (NU Bus-Card)
------------------------------------------------------------------------------------------------------------------------------
Metro Werks Code Warrior 00-00000-000000 10 M 9A X / / Subscription
------------------------------------------------------------------------------------------------------------------------------
MS Developers Network 0000790204-M2PI X W 8 X / / Subscription that expires 7/97
------------------------------------------------------------------------------------------------------------------------------
MS FrontPage 296-0136387 1.1 X W X / /
------------------------------------------------------------------------------------------------------------------------------
MS FrontPage 296-0136387 1.1 X W X / /
------------------------------------------------------------------------------------------------------------------------------
MS Publisher '97 19996-OEM-
0013505-59952 1.1 X W X / /
------------------------------------------------------------------------------------------------------------------------------
MS Technical Network 000790204 X W 4 X / / Subscription that expires 6/97
------------------------------------------------------------------------------------------------------------------------------
MS Windows NT 296-0136387 4.0 X W SP X / /
------------------------------------------------------------------------------------------------------------------------------
MS Windows NT 000-000-000 3.51 X W X / /
------------------------------------------------------------------------------------------------------------------------------
MS Windows NT 000-000-000 3.51 X W X / /
------------------------------------------------------------------------------------------------------------------------------
MS Windows NT
Client Access 3.51 X W 15 X / / 10 Client Access Licenses
------------------------------------------------------------------------------------------------------------------------------
MS Windows NT
Client Access 4.0 X W SP X / / 5 Client Access Licenses
------------------------------------------------------------------------------------------------------------------------------
Numega BoundsChecker 3250-36398D-9B 4.0 X W 9B / /
------------------------------------------------------------------------------------------------------------------------------
Qualcom Eudora Site #2008361 2.1.2 X M/W All X / / Site License ( 21M 22W)
------------------------------------------------------------------------------------------------------------------------------
Symantec Norton Utilities 00-00-00000 3.1 X M 11 / /
------------------------------------------------------------------------------------------------------------------------------
VISIO VISIO 000-000-000000 4.0 X W 4 X / /
------------------------------------------------------------------------------------------------------------------------------
VISIO VISIO 4.0 X W X / /
------------------------------------------------------------------------------------------------------------------------------
Mesh Paint 1867-1016 1.6 W SPB / /
------------------------------------------------------------------------------------------------------------------------------
87
Schedule 1.1 - Purchased Assets
Part 4 - Furniture and Fixtures in Concord, MA
----------------------------------------------------------------------------------------------------------------------
Location Desks Chairs Tables Bookshelf/Case File/Storage Cabinets Ent.Units Work Station Mag. Rack Credenza
----------------------------------------------------------------------------------------------------------------------
Room 1 14 3 1 1
----------------------------------------------------------------------------------------------------------------------
Room 2 2 3 2 2
----------------------------------------------------------------------------------------------------------------------
Room 3 1 3 1 1
----------------------------------------------------------------------------------------------------------------------
Room 4 2 1 2 1
----------------------------------------------------------------------------------------------------------------------
Room 5 1 2 2
----------------------------------------------------------------------------------------------------------------------
Room 6 1 1 2 1
----------------------------------------------------------------------------------------------------------------------
Room 7 2 2 1 1
----------------------------------------------------------------------------------------------------------------------
Room 8 6 3 3 3
----------------------------------------------------------------------------------------------------------------------
Room 9 4 2 2 1
----------------------------------------------------------------------------------------------------------------------
Room 10 2 3
----------------------------------------------------------------------------------------------------------------------
Room 11 2 2 1 1
----------------------------------------------------------------------------------------------------------------------
Room 12 1 5 1 1
----------------------------------------------------------------------------------------------------------------------
Room 13 1 2
----------------------------------------------------------------------------------------------------------------------
Room 14 1 1 1 3
----------------------------------------------------------------------------------------------------------------------
Room 15 2 2 3
----------------------------------------------------------------------------------------------------------------------
Room 16 1 1 2 1
----------------------------------------------------------------------------------------------------------------------
Room 17 1 2 1 1 1
----------------------------------------------------------------------------------------------------------------------
Room 21 1 * 3 1 * 1
----------------------------------------------------------------------------------------------------------------------
Room 22 ** 1 ** 3 2 1
----------------------------------------------------------------------------------------------------------------------
----------------------------------------------------------------------------------------------------------------------
Totals 8 52 23 30 17 1 5 1 2
----------------------------------------------------------------------------------------------------------------------
Room 21 - * 3 Black Chairs, 1 2 draw file
Room 22 - ** 1 Black Desk, 2 Black Chairs
Page 1
88
Schedule 1.1 - Purchased Assets
Part 4 - ZAO Furniture and Fixtures
mult furniture
EQUIPMENT (NON COMPUTERS) AND FURNITURE
ZAO AMI, ST. PETERBURG
---------------------------------------------------
N Name Type Quantity
---------------------------------------------------
1 Table 120
---------------------------------------------------
2 Chair 120
---------------------------------------------------
3 Scanner ScanMaker IIxf 1
---------------------------------------------------
4 Scanner ScanMaker IIG 2
---------------------------------------------------
5 Scanner ScanMaker 600ZS 1
---------------------------------------------------
6 Copier CANON NP1550 1
---------------------------------------------------
7 Printer HP Laser Jet 5L 1
---------------------------------------------------
8 Printer EPSON LX-100 1
---------------------------------------------------
9 CD Recorder 1
---------------------------------------------------
10 Line Tester 4
---------------------------------------------------
11 Video Player 1
---------------------------------------------------
Page 1
89
SCHEDULE 1.1 - PURCHASED ASSETS
PART 5 - INTELLECTUAL PROPERTY
Proprietary know-how, confidential information and
business processes involved in multimedia production
United States and foreign None
patents and patent applications
Copyrights in computer programs and other works None
of authorship which are registered with any
government agency, or for which registration
applications have been filed
United States and foreign trademarks, service marks
and trade names, and all registrations or applications
for registration of any such xxxx or names
- "Animation Magic" name
Seller's software products None
Claims by the Seller against any other party involving None
the Seller's intellectual property
90
SCHEDULE 1.1 - PURCHASED ASSETS
PART 6 - NETWORKING AND TELEPHONE EQUIPMENT
---------------------------------------------------------------------------------------------------------------------
ADIM/
DECAL # MAKE MODEL SN PRODUCTION LOCATION COMMENTS
---------------------------------------------------------------------------------------------------------------------
NETWORK
---------------------------------------------------------------------------------------------------------------------
1010 Cabletron MMAC-8 9060087-AA590050015 P 15 2-12 Port BNC Repeater
---------------------------------------------------------------------------------------------------------------------
1016 SUN SPARC 1PC 221MA506 P 15 Capitol (SUN)
---------------------------------------------------------------------------------------------------------------------
1019 Cabletron ESX-820 0994B044 P 15 BNC Switches in the Core
---------------------------------------------------------------------------------------------------------------------
1020 Cabletron ESX-820 3993B434 P 15 BNC Switches in the Core
---------------------------------------------------------------------------------------------------------------------
1061 Exabyte 8205XL P 15 8MM tape drive on CMI
---------------------------------------------------------------------------------------------------------------------
1062 Micron Millennia Plus P 15 P120/40/14Gig (CMI)
---------------------------------------------------------------------------------------------------------------------
1085 Exabyte 8205 P 15 8mm Tape Drive
---------------------------------------------------------------------------------------------------------------------
1086 Xxxxxxx XX00000x P 15 4 Gig Hard Drive
---------------------------------------------------------------------------------------------------------------------
1130 Cisco 2501 P 13 Router
---------------------------------------------------------------------------------------------------------------------
1131 D-Link DES-3205 HNE1001062 P 13 10/100 Base T Switch
---------------------------------------------------------------------------------------------------------------------
1132 Eastern Research DNS 1500 108664 P 13 CSU/DSU
---------------------------------------------------------------------------------------------------------------------
Telecom
---------------------------------------------------------------------------------------------------------------------
1129 KeyVoice P 13 486/66, 8M, Voice Mail PC
---------------------------------------------------------------------------------------------------------------------
Comdial Digital Phone Sys. P 13 Comdial Impact Phones (13)
Comdial Digitech Phones (6)
4 Port Voice Mail Interface
Key Voice Small Office Voice
Mail System
---------------------------------------------------------------------------------------------------------------------
NON-DECALED
Misc. Network Hardware
UTP Cable/Connectors
NIC's
Cable Testers/Fox&Hound
Network Tools
91
SCHEDULE 1.1 - PURCHASED ASSETS
PART 7 - MISCELLANEOUS ASSETS
-------------------------------------------------------------------------------------------------------------------------
ADMIN/
DECAL # MAKE MODEL SN PRODUCTION LOCATION COMMENTS
-------------------------------------------------------------------------------------------------------------------------
1123 Sony P 1 27" Monitor in Conference Room
-------------------------------------------------------------------------------------------------------------------------
1124 Magnavox VR9120AT01 PJ811099 P 1 VHS VCR
-------------------------------------------------------------------------------------------------------------------------
1125 Philips CDI-605 00259 P 1 CDI Player
-------------------------------------------------------------------------------------------------------------------------
1126 Sony LDP 1500 346053 P 1 Laser Disc Player
-------------------------------------------------------------------------------------------------------------------------
1028 ViewSonic 1769GS-2 J961431015 P 2 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1127 Magnavox CCS191AT21 38000788 P 2 21" TV/VCR
-------------------------------------------------------------------------------------------------------------------------
1030 ViewSonic 17EA J855011837 P 3 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1188 ViewSonic 17EA J853500876 P 4 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1032 ViewSonic 17HU7 J961330455 P 5 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1033 Zeos 10041201 P 5 486/33,8M
-------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx X0000 CY34231471S2 P 6 13" Monitor
-------------------------------------------------------------------------------------------------------------------------
1041 Apple Quadra 950 XB341S9F672 P 6 Mac for Scanning
-------------------------------------------------------------------------------------------------------------------------
1042 CTX 1765CD AJ0-51103123 P 6 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1044 NEC LC 350 292546361 P 6 NEC Silentwriter 95
-------------------------------------------------------------------------------------------------------------------------
1046 ViewSonic TX-1713MV 4134142391 P 7 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1047 Zeos SMS-1561CR AC0-41401756 P 7 14" Monitor
-------------------------------------------------------------------------------------------------------------------------
1048 IBM ValuPoint 23-N0246 P 7 486/33, 8M
-------------------------------------------------------------------------------------------------------------------------
1090 Xxxxxxx SPH-3A 8003285 P 9 Telephone Interface
-------------------------------------------------------------------------------------------------------------------------
1091 Xxxx of the Unicorn MIDI Time Piece II S0692020620 P 9
-------------------------------------------------------------------------------------------------------------------------
1092 DigiTech DSP-256XL 3772576 P 9
-------------------------------------------------------------------------------------------------------------------------
1094 Alesis 3630 P 9 Compressor
-------------------------------------------------------------------------------------------------------------------------
1097 Roland VP-70 A33146 P 9
-------------------------------------------------------------------------------------------------------------------------
1098 Urei 6230 8864 P 9 Power Amp
-------------------------------------------------------------------------------------------------------------------------
1099 Xxxxxx XX-0000 XX-0000XXX P 9
-------------------------------------------------------------------------------------------------------------------------
1100 Symetrix 528 46470 P 9
-------------------------------------------------------------------------------------------------------------------------
1101 Xxxxxx M-120 ZB04745 P 9 Line Mixer
-------------------------------------------------------------------------------------------------------------------------
1102 Xxxxx 6.5 P 9 Stereo Monitors
-------------------------------------------------------------------------------------------------------------------------
1107 TCP 112062 P 9 486/33, 8M
-------------------------------------------------------------------------------------------------------------------------
1133 Technics SL-P1300-KM F19512P017 P 10 CD Player
-------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx X0000 S14172QF1XX P 10 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1140 E-Mu P 10 Procussion MIDI Module
-------------------------------------------------------------------------------------------------------------------------
1141 OMS Opcode Studio 5 P 10 MIDI Interface
-------------------------------------------------------------------------------------------------------------------------
1142 XX Xxxxxx Electronics PPS 100 A1016470 P 10 MIDI SMPTE Synchronizer
-------------------------------------------------------------------------------------------------------------------------
1143 Tascam 103 280061914 P 10 Tape Deck
-------------------------------------------------------------------------------------------------------------------------
1145 Amphex Dominator II P 10 Peak Limiter
-------------------------------------------------------------------------------------------------------------------------
1147 Tascam RC-D6 10198 P 10 Remote for DA-60
-------------------------------------------------------------------------------------------------------------------------
1148 Time Line MicroLynx Keyboard 0882 P 10
-------------------------------------------------------------------------------------------------------------------------
1149 Micron LM-1764 A17R202604-A P 11 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1150 TCP 486 P 11 486/33, 16M
-------------------------------------------------------------------------------------------------------------------------
1151 Apple STD-9735 3504710C560 P 11 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
0000 XXX 6000 008958 P 11
-------------------------------------------------------------------------------------------------------------------------
1155 Tascam 102MK II 010285 P 11 Tape Deck
-------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxx XX-00XX II 0260572 P 11 DAT Deck
-------------------------------------------------------------------------------------------------------------------------
1157 Mackie CR1604 A74578 P 11 Line Mixer
-------------------------------------------------------------------------------------------------------------------------
1158 DigiDesign SSD Sync P 11 SMPTE Slave Drive
-------------------------------------------------------------------------------------------------------------------------
1160 Philips CD921117S P 11 CD Player
-------------------------------------------------------------------------------------------------------------------------
1161 Hafler P1500 P 11 Power Amp
-------------------------------------------------------------------------------------------------------------------------
1162 Apple Quadra 950 XB51903M677 P 11
-------------------------------------------------------------------------------------------------------------------------
92
SCHEDULE 1.1 - PURCHASED ASSETS
PART 7 - MISCELLANEOUS ASSETS
-------------------------------------------------------------------------------------------------------------------------
ADMIN/
DECAL # MAKE MODEL SN PRODUCTION LOCATION COMMENTS
-------------------------------------------------------------------------------------------------------------------------
1163 Apple M1298F1D07 S43250 P 11 16" Monitor
-------------------------------------------------------------------------------------------------------------------------
1164 Apple Quadra 950 XB4165P5672 P 11
-------------------------------------------------------------------------------------------------------------------------
1165 8mm Tape Drive P 11
-------------------------------------------------------------------------------------------------------------------------
1128 Fedex PowerShip 3 607325 P 13
-------------------------------------------------------------------------------------------------------------------------
1024 ViewSonic TX-1713MV 0000000000 P 14 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1026 HP C2163A (FAX-310) 3306J00156 P 14 Production FAX
-------------------------------------------------------------------------------------------------------------------------
1018 HP DeskJet 820 CSE US690140W0 P 15 Color Printer
-------------------------------------------------------------------------------------------------------------------------
1063 ViewSonic TX-1713MV 4134142603 P 15 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1064 ADC Patch Bay P 15 2x24 Patch Bay
-------------------------------------------------------------------------------------------------------------------------
1065 ADC Patch Bay P 15 2x24 Patch Bay
-------------------------------------------------------------------------------------------------------------------------
1066 ADC Patch Bay P 15 2x24 Patch Bay
-------------------------------------------------------------------------------------------------------------------------
1067 Magni WVM-560 12060316A P 15 Waveform Monitor
-------------------------------------------------------------------------------------------------------------------------
1069 Cypher BTX TC 3183-0253 P 15 Time Code Generator
-------------------------------------------------------------------------------------------------------------------------
1071 Panasonic AG-1950 X0XX00000 P 15 VHS Recorder
-------------------------------------------------------------------------------------------------------------------------
1077 Xxxxxx SPG-120N 821747 P 15 Sync Generator
-------------------------------------------------------------------------------------------------------------------------
1079 Sony P 15 Camera Control Unit
-------------------------------------------------------------------------------------------------------------------------
1081 DigiDesign P 15 Video Sync Device
-------------------------------------------------------------------------------------------------------------------------
1083 Apple Quadra 950 XB52503P677 P 15 Audio "B"
-------------------------------------------------------------------------------------------------------------------------
1084 Sony PVM 0000 0000000 P 15 13" Monitor
-------------------------------------------------------------------------------------------------------------------------
1087 Apple Power MAC 610/60 XB421C40175 P 15 FileMaker Pro Server
-------------------------------------------------------------------------------------------------------------------------
1088 Apple Quadra 950 XB519037677 P 15 AudioMAC
-------------------------------------------------------------------------------------------------------------------------
1089 Apple M2943 P 15 13" Monitor
-------------------------------------------------------------------------------------------------------------------------
1166 Exabyte 8205 P 15 8mm Tape Drive
-------------------------------------------------------------------------------------------------------------------------
1168 PlayWrite 4X CD-R P 15 CD-ROM Recorder
-------------------------------------------------------------------------------------------------------------------------
1176 Ikegami TM 2016R N6550 P 15 19" Monitor
-------------------------------------------------------------------------------------------------------------------------
1169 Super MAC STD 9735 318471000385 P 16 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1170 Tannoy PBM 6.5 II 455145 P 16 Speakers
-------------------------------------------------------------------------------------------------------------------------
1171 Mackie 1202 XXX 0000000 X 00 00 Channel Mixer
-------------------------------------------------------------------------------------------------------------------------
1173 DigiDesign Quad Audio Interface A01540 P 16 Pro Tools
-------------------------------------------------------------------------------------------------------------------------
1174 Hafler Pro 2400 P 16 Power Amp
-------------------------------------------------------------------------------------------------------------------------
1175 Apple Quadra 950 F33050FS671 P 16
-------------------------------------------------------------------------------------------------------------------------
1109 ViewSonic 16X69A 0000000000 P 17 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1110 Xxxx 00000000 X 00 000/00, 8M
-------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx X0000 5029114 P 8a 13" Monitor
-------------------------------------------------------------------------------------------------------------------------
1050 Apple Quadra 610 XB41217F1CH P 8a
-------------------------------------------------------------------------------------------------------------------------
1051 ViewSonic 1782 53332503693 P 8a 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1053 Brother HL-8 K71909308 P 8a Laser Printer
-------------------------------------------------------------------------------------------------------------------------
1055 ViewSonic 17HU7 J960623528 P 8b 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
1056 ViewSonic TX-1713MV 4134142599 P 8b 17" Monitor
-------------------------------------------------------------------------------------------------------------------------
0000 X-Xx Proteus 1 01227605 P Xxxx Sound module
-------------------------------------------------------------------------------------------------------------------------
0000 X-Xx Proteus 2 01209164 P Xxxx Sound module
-------------------------------------------------------------------------------------------------------------------------
1192 BBE Sonic Maximizer E10806 P Xxxx Noise Generator
-------------------------------------------------------------------------------------------------------------------------
1193 Teac DAT Recorder 003368 P Xxxx DAT Deck
-------------------------------------------------------------------------------------------------------------------------
1011 Various Competitive
Titles P 14 ~75 Titles
-------------------------------------------------------------------------------------------------------------------------
93
SCHEDULE 1.2 - EXCLUDED ASSETS
PART 1 - ACCOUNTS RECEIVABLE ALL
PART 2 - CASH ACCOUNTS ALL
94
SCHEDULE 1.2 - EXCLUDED ASSETS
PART 3 - COMPUTER EQUIPMENT USED BY SELLERS EMPLOYEES AT CONCORD FACILITY
-------------------------------------------------------------------------------------------------------------------------
ADMIN/
DECAL # MAKE MODEL SN PRODUCTION LOCATION COMMENTS
--------------------------------------------------------------------------------------------------------------------------
0000 Xxxxx X0000 S5406057E04 A 15 12" Monitor
--------------------------------------------------------------------------------------------------------------------------
1012 A 15 I Gigabyte HD in enclosure
--------------------------------------------------------------------------------------------------------------------------
1013 A 15 8MM tape drive on Capitol (SUN)
--------------------------------------------------------------------------------------------------------------------------
1014 SUN 17smm1 038BU0318 A 15 Monitor on Capitol (SUN)
--------------------------------------------------------------------------------------------------------------------------
0000 Xxxxxxx XX00000X X 15 1 Gigabyte HD in enclosure
--------------------------------------------------------------------------------------------------------------------------
1017 SUN SPARC Classic A 15 Concord (SUN)
--------------------------------------------------------------------------------------------------------------------------
1021 Electro Mechanical Concepts 9606520001 A 15 Solomon Server, P120, 32M, 1G
--------------------------------------------------------------------------------------------------------------------------
1022 Micron Millennia Plus A 15 Web Server, P120, 32M, .5G
--------------------------------------------------------------------------------------------------------------------------
1034 Printex FormsPro 2003 8208VCA1956 A 5 Deltec Line Printer
--------------------------------------------------------------------------------------------------------------------------
1035 Everex EX0-2904D-B1 1PY15350621 A 5 Deltec Server 486/8M/.5Gig
--------------------------------------------------------------------------------------------------------------------------
1036 CTX 1451 A90-41501789 A 5 14" Monitor (Deltec)
--------------------------------------------------------------------------------------------------------------------------
1037 Generic A 5 486/33,20M (Deltec Client)
--------------------------------------------------------------------------------------------------------------------------
1111 Xerox 6010 A 25 Typewriter
--------------------------------------------------------------------------------------------------------------------------
1112 Brother GX-8500 E46649863 A 25 Typewriter
--------------------------------------------------------------------------------------------------------------------------
1113 CTX 1765GM AH0-41701871 A 20 17" Monitor
--------------------------------------------------------------------------------------------------------------------------
1114 TCP 11457 A 20 486/66, 16M
--------------------------------------------------------------------------------------------------------------------------
1115 HP C3530A MY61RB307T A 22 FAX 700
--------------------------------------------------------------------------------------------------------------------------
1116 Electro Mechanical Concepts P120 9606500003 A 19 P120/16/1Gig
--------------------------------------------------------------------------------------------------------------------------
1117 ViewSonic 1569GS-2 D960120467 A 19 15" Monitor
--------------------------------------------------------------------------------------------------------------------------
1118 HP C2009A USFB378883 A 25 HP LaserJet 4Si
--------------------------------------------------------------------------------------------------------------------------
1119 Pitney Xxxxx 6220 77462 A 22 Postage Meter
--------------------------------------------------------------------------------------------------------------------------
1120 Pitney Xxxxx A510 41125 A 22 Postage Scale
--------------------------------------------------------------------------------------------------------------------------
1121 HP C3510A JPA4201527 A 22 FAX 900
--------------------------------------------------------------------------------------------------------------------------
1122 Sharp SD-3075 A 24 Large Copier
--------------------------------------------------------------------------------------------------------------------------
1183 Electro Mechanical Concepts P120 9606500002 A 18 P120/16/1Gig
--------------------------------------------------------------------------------------------------------------------------
1184 ViewSonic 15GS D960120475 A 18 15" Monitor
--------------------------------------------------------------------------------------------------------------------------
1185 Generic P120 A 21 P120/16M/1Gig
--------------------------------------------------------------------------------------------------------------------------
1186 ViewSonic 15GS D960120463 A 21 15" Monitor
--------------------------------------------------------------------------------------------------------------------------
FURNITURE & FIXTURES
ADMIN/
ITEM QUANTITY PRODUCTION LOCATION COMMENTS
---------------------------------------------------------------------------------------------
Oil Paintings by Xxxxxx Tittof 2 A 1 Owned by Xxxx Xxxxxxxxx
---------------------------------------------------------------------------------------------
Oil Paintings by Xxxxxx Tittof 1 A 2 Owned by Xxxx Xxxxxxxxx
---------------------------------------------------------------------------------------------
Oil Pantrngs by Xxxxxx Tittof 1 A 3 Owned by Xxxx Xxxxxxxxx
---------------------------------------------------------------------------------------------
Framed Fantasy Arlworks 4 A 14 Owned by Xxxx Xxxxxxxxx
---------------------------------------------------------------------------------------------
Bookshelves 3 A 18
---------------------------------------------------------------------------------------------
Chairs 3 A 18
---------------------------------------------------------------------------------------------
Credenza 1 A 18
---------------------------------------------------------------------------------------------
Desk 1 A 18
---------------------------------------------------------------------------------------------
Fixtures and Personal Items 1 A 18
---------------------------------------------------------------------------------------------
2-Draw Lateral File 1 A 19
---------------------------------------------------------------------------------------------
Bookshelves 2 A 19
---------------------------------------------------------------------------------------------
Chairs 2 A 19
---------------------------------------------------------------------------------------------
Desk 1 A 19
---------------------------------------------------------------------------------------------
Fixtures and Personal Items 1 A 19
---------------------------------------------------------------------------------------------
2-Draw Lateral File 1 A 20
---------------------------------------------------------------------------------------------
Chairs 4 A 20
---------------------------------------------------------------------------------------------
Desk 1 A 20
---------------------------------------------------------------------------------------------
Fixtures and Personal Items 1 A 20
---------------------------------------------------------------------------------------------
2-Draw File Cabinet 2 A 22
---------------------------------------------------------------------------------------------
Blue Chairs 1 A 22
---------------------------------------------------------------------------------------------
Desks (Oak Wood) 2 A 22
---------------------------------------------------------------------------------------------
High Back Black Chair 1 A 22
---------------------------------------------------------------------------------------------
2-Draw File Cabinet 1 A 23
---------------------------------------------------------------------------------------------
Desk 1 A 23
---------------------------------------------------------------------------------------------
Lamp 1 A 23
---------------------------------------------------------------------------------------------
Misc Furniture Assets 1 A 23
---------------------------------------------------------------------------------------------
Wallboard 12 A 23
---------------------------------------------------------------------------------------------
5-Draw Lateral Files 6 A 24
---------------------------------------------------------------------------------------------
Bookshelve 1 A 24
---------------------------------------------------------------------------------------------
Storage Cabinet 1 A 24
---------------------------------------------------------------------------------------------
Table 1 A 24
---------------------------------------------------------------------------------------------
2-Draw Lateral File 2 A 25
---------------------------------------------------------------------------------------------
5-Draw Lateral File 1 A 25
---------------------------------------------------------------------------------------------
Bookshelve 1 A 25
---------------------------------------------------------------------------------------------
Chairs 3 A 25
---------------------------------------------------------------------------------------------
Coat Tree 1 A 25
---------------------------------------------------------------------------------------------
Desk 1 A 25
---------------------------------------------------------------------------------------------
Tapestry Wall Hanging
Purchased in Russia 1 A 25 Owned by Xxxx Xxxxxxxxx
---------------------------------------------------------------------------------------------
95
SCHEDULE 1.2 - EXCLUDED ASSETS
PART 4 - COMPUTER SOFTWARE ENGINES & TOOLS
All software engines and tools that have been developed by the Seller or ZAO AMI
for the production of the multimedia assets, including.
* Magic Composer Tool Suite Interactive Game Editor & Runtime Engine
* 3D Engine and Authorizing Tools
* Line Testing Software
* Project Management Software
* CDI Engine & Development Tools
* Video Compression Software
* CDI and PC Side Scrolling Engine and Tools
96
SCHEDULE 1.2 - EXCLUDED ASSETS
PART 5 - MULTIMEDIA PRODUCTS & TRADEMARKS
All United States and foreign trademarks, service marks, trade names and
associated goodwill, and registration or application for registration of any
such marks or names that have previously been obtained or filed by Capitol
Multimedia, Inc. up to the Closing Day and are in the process of being obtained.
Multimedia Products:
--------------------
Magic Tales: Liam Finds A Story
----------- Sleeping Cub's Test of Courage
The Princess And The Crab
BabaYaga and the Magic Geese
Imo & The King
The Little Samurai
Adventure Games: Xxxxx The Dragon
--------------- Xxxxxxx And The Hot Air Balloon
Chill Manor
I.M. Meen
Math Invaders (Pythagoras)
All Products, Properties Developed for the CDI Platform
Products Under Development:
---------------------------
Xxxxx Goes to Summer Camp
The Magic Acorns
The Pearls of Wisdom
Scripts and concepts, designs, demos, prototypes for
*Rifts of Chaos
*StarLab - The Lost Weather Balloons
*StarLab - Insect Adventure
97
SCHEDULE 1.2 - EXCLUDED ASSETS
PART 6 - DISTRIBUTION AGREEMENTS
1. Davidson & Associates, Inc. - Magic Tales
2. Davidson & Associates, Inc. - Xxxxxx Price - Magic Tales
3. Broderbund - Xxxxxxx and The Hot Air Balloon
4. Simon & Xxxxxxxx - Space Stations, Pythagoras
5. Simon & Xxxxxxxx - I.M. Meen, Chill Manor
6. All CD-I Distribution Agreements including:
* Philips Media, Inc.
* American Laser Games
* Polymedia Communications Corporation
* Discovery Communications, Inc.
98
SCHEDULE 1.2 - EXCLUDED ASSETS
PART 7 - SOFTWARE DEVELOPMENT CAPABILITY
Supply Chain Management Software Group in St. Petersburg, Russia
* Xxxxxx, Xxxxxx
* Kerov, Dmitry
CSTI, wholly owned subsidiary of the Seller located in Xxxxxx, Xxxxxxxxxxxxx
00
SCHEDULE 1.2 - EXCLUDED ASSETS
PART 8 - LIST OF SELLER EMPLOYEES/CONTRACTORS
UTILIZING CONCORD FACILITY
Employees:
----------
Xxxx Xxxxxxxxx
Xxxxxx Xxxxxx
Xxxxx Xxxx
Contractors:
------------
Xxxxxxx Xxxxx
100
SCHEDULE 1.3 - ASSUMED LIABILITIES
PART 1 - LEASES AND OPERATING COSTS
1. Real Property Lease Agreement for 000 Xxxxx Xxxxxx, Xxxxx 000, Xxxxxxx,
Xxxxxxxxxxxxx, Xxxxxx Xxxxxx.
2. Real Property Lease Agreement for 0 Xxxxxxxxxxxxxxx, Xx. Xxxxxxxxxx,
Xxxxxx.
3. Payroll costs associated with employees listed in Part 2 and 3 of Schedule
1.3.
4. All operating costs related to Concord and St. Petersburg facilities.
101
Schedule 1.3 - Liabilities
Part 2 - Assumed Employees - U.S.
Animation Magic (Concord Staff)
----------------------------------------------------------------------------------------------
NAME ADDRESS TITLE ANNUAL SALARY HIRE DATE
----------------------------------------------------------------------------------------------
1 Xxxx X. Xxxxxxx 000 Xxxxx Xxxx Vice President $180,000 1/1/92
Xxxxxxxx, XX 00000 CUC Software
----------------------------------------------------------------------------------------------
2 Xxxxx Xxxxxxx 000 Xxxxxx Xxxxxx Audio $ 28,000 9/1/95
Xxxxx, XX 00000 Engineer
----------------------------------------------------------------------------------------------
3 Hyun Xxx Xxx Production $ 30,000 7/7/95
Assistant
----------------------------------------------------------------------------------------------
4 Xxxxx XxxXxxxxx 0000 Xxxxxxxx Xxx. System $ 50,000 11/18/96
Xxxxxx, XX 00000 Administrator
----------------------------------------------------------------------------------------------
5 Xxxx X'Xxxxx 00 Xxxxxxxxx Xxxxxx #00 Senior $ 64,000 5/1/92
Xxxxxxx, XX 00000 Software Eng.
----------------------------------------------------------------------------------------------
6 Xxxxx Xxxxxx 00 Xxxxxx Xxx. Audio $ 31,000 5/15/95
Xxxxxxxxxx, XX 00000 Engineer
----------------------------------------------------------------------------------------------
7 Xxxxxx Xxxxxxx 00 Xxxxxxxx Xxxx Production $ 60,000 6/1/93
Xxxxxxxx, XX 00000 Manager
----------------------------------------------------------------------------------------------
8 Xxxxxxx Xxxxxx 268 R. Boston Turnpike Composer, $ 44,000 4/1/94
Xxxxxxxxxx, XX 00000 Audio Eng.
----------------------------------------------------------------------------------------------
9 Xxxxxx Xxxxxxxxx 199 Washington Steet Editor, $ 55,000 1/2/96
Xxxxxxxxx, XX 00000 Writer
----------------------------------------------------------------------------------------------
Total (Concord) $542,000
----------------------------------------------------------------------------------------------
Page 1
102
Schedule 1.3 - Liabilities
Part 3 - Assumed Employees - Russia
[3 PAGES TABLE - CAN NOT TRANSLATE RUSSIAN CHARACTERS]
103
Schedule 1.3 - Liabilities
Part 4 - Assumed Severance Arrangements
-----------------------------------------------------------------------------------------------
SEVERANCE ARRANGEMENTS
Employer Employer Employer
Base Severance MEDI (1.45%) SS(6.2%) FUTA & Match
Pay Liability NO-LIMIT CAP-$65,400 SUTA 401K TOTAL
--- --------- ----------- ----------- ---- -------- -----
DeSharone 130,000 125,000 1,813 4,055 -- 3,750 134,617
11.5
months
Gudema 75,000 12,500 181 775 -- 375 13,831
2 months
148,449
-----------------------------------------------------------------------------------------------
Schedule 1.3 - Liabilities
Part 5 - Excluded Liabilities
None
104
SCHEDULE 2.6 - APPROVALS AND CONSENTS NONE
SCHEDULE 2.7 - OWNERSHIP OF ASSETS NONE
Schedule 2.8 - Changes to the Financial Statements
Acquisition of CSTI stock by Seller on
March 31, 1997.
Decline in work-for-hire revenue in the
4th quarter of fiscal 1997.
SCHEDULE 2.9 - UNDISCLOSED LIABILITIES NONE
SCHEDULE 2.11 - NO LITIGATION NONE
SCHEDULE 2.14 - EXCEPTIONS TO DISCLOSURES
Seller has not taken any action to perfect
or protect Seller's Intangible Assets and
Intellectual Property rights.
SCHEDULE 2.18 - LEASES NONE
SCHEDULE 2.19 - ENVIRONMENTAL MATTERS NONE
SCHEDULE 2.21 - WARRANTIES NONE
