Exhibit 10.49
ASSET PURCHASE AGREEMENT
DATED AS OF
JUNE 18, 2001
BY AND BETWEEN
IMPRES TECHNOLOGY SOLUTIONS, INC.
AND
WAREFORCE INCORPORATED
ASSET PURCHASE AGREEMENT
Asset Purchase Agreement (the "Agreement") dated as of June 18, 2001, by
and between Wareforce Incorporated, a California corporation ("Seller") and
IMPRES Technology Solutions, Inc., a California corporation ("Buyer").
Whereas, Seller conducts various computer-related businesses
including a business (the "Business") which sells to various
governmental entities and is more commonly known as Seller's
Commerce Branch and includes all employees of the Commerce Branch
as well as DCFS, DPSS and other Commerce Branch-associated
services personnel; and
Whereas, Buyer desires to purchase certain assets of the Business
from Seller, and Seller desires to sell certain assets of the
Business to Buyer, upon the terms and subject to the conditions
hereinafter set forth;
Now, therefore, in consideration of the foregoing and the
representations, warranties, covenants and agreements herein contained, the
parties hereto agree as follows:
1. PURCHASE AND SALE
a. Purchase and Sale. Upon the terms and subject to the conditions of
this Agreement, Buyer agrees to purchase from Seller and Seller
agrees to sell, transfer, assign and deliver, or cause to be sold,
transferred, assigned and delivered, to Buyer at closing on the
Closing Date, all of the Seller's then existing assets as they
relate to the Business, as a going concern reflected on the attached
Schedule 1.1 "Purchased Asset Schedule" dated as of June 18, 2001,
with such changes therein that have occurred in the ordinary course
of the Seller's business between June 18, 2001 and the Closing Date
("Purchased Assets").
i. The Purchased Assets shall specifically include:
1. The assets of the Business listed on the Xxxx of
Sale;
2. office equipment at the Commerce location of the
Seller including, without limitation, Seller's
telephone system, computer systems, tools and
supplies of Seller's repair department, advertising
signs, catalogs and sales literature;
3. leasehold improvements at the Commerce location of
the Seller not deemed to be the property of
Seller's landlord including, without limitations,
trade fixtures;
4. rights to use the trade names "IMPRES" and "IMPRES
Technologies" for such period of time as Buyer
deems necessary;
5. all goodwill associated with the Business and the
Purchased Asset together with the right to
represent to third parties that Buyer is the
successor to the Business;
6. such items of Seller (such as a server) as Buyer
and Seller may mutually agree and that are
necessary to run the Cove system at the Commerce
location; and
7. contracts with Los Angeles County, Gwenett County,
NACO;
8. convertible open purchase orders from customers as
of the date of Closing; and
9. customer lists of the Business (relating to
specifically accounts served by the Commerce
Branch).
ii. However, regardless of anything to contrary contained
herein, the Purchased Assets shall not include:
1. all of the cash and cash equivalents of Seller;
2. all of Seller's accounts and receivables as of the
closing date, including without limitation to
accounts receivable, loans receivable, and advances
due from customers, vendors, manufacturers,
employees and others; and the right to receive all
payments, rights, and privileges of Seller arising
under the accounts and receivables;
3. all rebates, price protection, marketing
development funds, or special incentives due or
earned from manufacturers and vendors by Seller
prior to Closing;
4. all of the Seller's Inventories relating to the
Business, including without limitation, all raw
materials, work in process and office and other
supplies, whether on-site, held at any location
controlled by Seller or in transit to Seller;
5. all of the prepaid expenses, unbilled costs and
fees, and any tax credits, deferrals or receivables
of Seller;
6. all of the trade names, service marks, trademarks,
patents, trade secrets, copyrights, and other
intellectual property rights of Seller, whether
registered, or unregistered;
7. all computer software and related licenses of
Seller, except for the specific software currently
residing on computers purchased by Buyer under this
agreement, however, Seller makes no representation
as to the transferability of such licenses;
8. all internet domain names, URL's, web pages and all
programming of such web pages; and
9. all of the books and records of the Seller, except
that the Seller will provide the Buyer with certain
records relating solely to the Business.
b. Assumption of Liabilities. Upon the terms and subject to the
conditions of this Agreement, Buyer and Seller agree that Buyer is
not assuming any of Seller's liabilities of the Business except:
i. Per Section 1(g)(v) below, Buyer's pro-rata share of payroll
for product-related employees retained by Buyer that are on the
Seller's payroll as of the Closing Date;
ii. Per Section 1(p) below, up to the first Fifty Thousand Dollars
and No Cents ($50,000.00) in total liabilities for customer
pre-paid expenses, maintenance and service contracts and
similar items existing at the time of Closing but not those
items such as deposits paid to Seller prior to Closing
(excluding the Payroll obligations described above); and
iii. Facility lease for the facility at 0000 Xxxxxxx Xxxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxxxx 00000 and such operating leases as
the parties may mutually agree.
c. Excluded Liabilities. Notwithstanding any provision in this
Agreement or any other writing to the contrary, Buyer is assuming
only the Assumed Liabilities and is not assuming any other
liability or obligation of Seller (or any predecessor owner of all
or part of its business and assets) of whatever nature, whether
presently in existence or arising hereafter. All such other
liabilities and obligations shall be retained by and remain
obligations and liabilities of Seller. Specifically, Buyer shall not
assume or be liable for any liability of Seller in respect of:
i. Any liabilities incurred by Seller prior to the Closing
Date; provided however, that Buyer agrees to assume, per
Section 1(p) below, up to the first Fifty Thousand Dollars
and No Cents ($50,000.00) of liabilities, if any, which may
be unknown to the parties as of Closing but which may be
claimed against the Business after Closing;
ii. Any profit derived from the sale provided for by this
Agreement;
iii. The preparation of filing in any tax returns in the payment
of any taxes, license fees, or any other charges levied,
assessed, or imposed upon the Seller's business or property
before the Closing Date, except that Buyer shall pay Seller
at closing the amount shown to be accrued and owing for
taxes on the schedule of accounts payable;
iv. Any state, local or federal taxes resulting from the sale
of the assets contemplated by this transaction.
d. Purchase Price.
i. The purchase price for the Purchased Assets (the "Purchase
Price") shall be the value of the Assumed Liabilities, Net
Revenue Payments, and any other consideration, if any,
provided for hereunder.
ii. The Purchase Price shall be allocated among the Purchased
Assets as agreed by the parties, such agreement to be
completed prior to the day of closing. Buyer and Seller
shall reflect such allocation in any filing pursuant to
Section 1060 of the Internal Revenue Code or any regulation
thereafter. The Purchase Price shall be allocated among the
Purchased Assets as agreed by the parties, such agreement
to be completed prior to the day of closing. Buyer and
Seller shall reflect such allocation in any filing pursuant
to Section 1060 of the Internal Revenue Code or any
regulation thereafter.
e. Net Revenue Payments.
i. In addition to the Purchase Price, Buyer shall pay to
Seller the following amounts:
1. One Hundred Sixty Five Thousand Dollars and No
Cents ($165,000.00), payable in:
a. one (1) installment of Two Thousand
Dollars and No Cents ($2,000.00) at
Closing;
b. one (1) installment of Twenty Five
Thousand, Five Hundred Dollars
and No Cents ($25,500.00) on October 31,
2001; and
c. five (5) equal installments of
Twenty-Seven Thousand, Five Hundred
Dollars and No Cents ($27,500.00) on the
following dates:
i. December 31, 2001;
ii. March 31, 2002;
iii. June 30, 2002;
iv. September 30, 2002; and
v. December 31, 2002.
vi. Buyer shall evidence its
indebtedness under this Section
(1)(e)(1) by means of executing a
Promissory Note, a copy of which
is attached as Exhibit B and
secured by a Security Agreement, a
copy of which is attached as
Exhibit C.
2. Fifteen percent (15%) of the Earnings Before
Depreciation, Taxes, Amortization and officers' and
owners' compensation, (such officers' and owners'
compensation not to exceed Sixty Thousand Dollars
and No Cents ($60,000.00) per quarter for purposes
of this calculation including compensation paid to
any other investors or partners in the business),
but excluding costs for asset write-offs, other
non-operating expenses and other expenses not
related to the ordinary operation of the Business
("Adjusted EBDTA") generated by the Business after
Closing to be paid as follows:
i. On the last calendar day of each
and every calendar quarter, with
the first payment to be made on
December 31, 2001 and the last to
made on December 31, 2006.
ii. The maximum amount Buyer shall be
obligated to pay Seller under this
Section (1)(e)(2) shall be Three
Hundred Thousand Dollars and No
Cents ($300,000.00).
iii. Buyer shall evidence its
indebtedness under this Section
(1)(e)(2) by means of executing a
Promissory Note, a copy of which
is attached as Exhibit D and
secured by a Security Agreement, a
copy of which is attached as
Exhibit E.
iv. Seller will have the ability to
review the relevant books and
records of the Buyer to validate
the computation of Adjusted EBDTA.
f. Closing. The closing (the "Closing") of the purchase and sale of the
Purchased Assets and the assumption of the Assumed Liabilities
hereunder shall take place at the offices of Buyer in El
Segundo, California, at 10:00 a.m. on or before June 18, 2001, or at
such other time or place as Buyer and Seller may agree.
g. Transition Period. Buyer and Seller acknowledge that there will be
the need for a transition period to affectively transition the
business to the Seller which will be from the date of closing
through June 30, 2001. During this transition period, Buyer and
Seller agree that:
i. Seller currently has approximately One Million Five
Hundred Thousand Dollars and No Cents ($1,500,000.00) to
Two Million Dollars and No Cents ($2,000,000.00) in
outstanding purchase orders as of the date of Closing.
Buyer will work with Seller to assign all outstanding
purchase orders to Buyer; however, as necessary, Buyer
agrees to fulfill as many such purchase orders as is
commercially reasonable, and
ii. Seller has several service contracts commonly known as
DPSS, DCFS and CATS, which are paid monthly. Seller will
continue these contracts through June 30, 2001 and assign
these contracts to Buyer as of July 1, 2001, and
iii. Seller will assume the lease on the facility located at
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxxxx
00000 and all related expenses associated with such lease
as of July 1, 2001, and
iv. Seller shall continue to fund the reasonable operating
expenses of the Business until June 30, 2001, and
v. Seller shall be responsible for paying the payroll
liability for product-related employees retained by Buyer
that are on the Seller's payroll as of the Closing Date,
on the regularly scheduled payroll date of June 29, 2001
and Buyer shall reimburse Seller for its pro-rata share of
such payroll based on the pro-rata share of gross profit
related to product orders generated by the Buyer during
the period from the Closing Date through June 30, 2001.
Such reimbursement shall be paid by Buyer on or before
August 31, 2001, and
vi. Seller shall advance Fifty Percent (50%) of the payroll
liability of the Buyer for employees retained by Buyer
that are on the Seller's payroll as of the Closing Date,
for the regularly scheduled payroll on July 13, 2001 and
Buyer shall reimburse Seller the entire amount of the
advance on or before August 7, 2001. Buyer agrees to enter
into a Promissory note substantially in the form attached
hereto as Exhibit F evidencing such advance and the terms
and conditions for its repayment and as secured by a
Security Agreement, a copy of which is attached as Exhibit
G, and
vii. Seller shall provide Buyer with the COVE accounting system
and the necessary servers to allow Buyer to install and
operate the COVE accounting system, however, Buyer is
responsible to work with COVE to obtain the necessary
authorizations and licenses to operate the COVE accounting
system, and
viii. Seller shall provide reasonable assistance through July
31, 2001, using existing resources of the Seller, to Buyer
during the transition period to assist Buyer in setting up
the COVE accounting system. Any additional resources
required by the Buyer
will be the responsibility of the Buyer. Additionally,
Seller shall provide reasonable support to Buyer on the
COVE accounting system for the month of July 2001, and
ix. Buyer and Seller shall each retain all rights, duties and
obligations to the receivables generated by each during
the transition period and each shall be responsible for
the payment of commissions on sales generated by each of
them, and
x. Specifically, Seller shall retain any net profit, as
measure by Generally Accepted Accounting Principals
("GAAP") generated by Seller post-Closing through June 30,
2001 for product orders fulfilled by Seller and Services
generated by personnel being paid by Seller.
h. Seller and Buyer shall enter into an Assignment and Assumption
Agreement substantially in the form attached hereto as Exhibit A,
and Seller shall deliver to Buyer such general warranty deeds, bills
of sale, endorsements, consents, assignments and other good and
sufficient instruments of conveyance and assignment (the "Conveyance
Documents") as the parties and their respective counsel shall deem
reasonably necessary or appropriate to vest in Buyer all right,
title and interest in, to and under the Purchased Assets.
i. Seller shall deliver to Buyer a certified copy of the resolution by
the Seller's board of directors certifying that Seller has
authorized the execution, delivery of performance and the
transaction contemplated herein and authorizing the officers of
Seller to execute this Agreement.
j. Seller shall provide to Buyer at closing a Certificate of Good
Standing dated not more than thirty- (30) days prior to the Closing
Date.
k. Seller will deliver to Buyer on the Closing Date an officer's
certificate certifying that Seller has taken all corporate action
necessary to authorize the transactions contemplated by this
Agreement.
l. Buyer shall deliver to Seller a certified copy of the resolution by
the Buyer's board of directors certifying that Buyer has authorized
the execution, delivery of performance and the transaction
contemplated herein and authorizing the officers of Buyer to execute
this Agreement.
m. Buyer will deliver to Seller on the Closing Date an officer's
certificate certifying that Buyer has taken all corporate action
necessary to authorize the transactions contemplated by this
Agreement.
n. Seller shall have the right to audit the books and records of Buyer
during normal business hours so long as the Buyer has any
obligations to Seller outstanding under any promissory note.
o. Seller shall retain, for forty-five (45) days after the Closing
Date, responsibility for sales returns for invoices issued by Seller
prior to the Closing Date.
p. Buyer will assume up to Fifty Thousand Dollars and No Cents
($50,000.00) in total liabilities
for customer pre-paid expenses, maintenance and service contracts
and similar items existing at the time of Closing but not those
items such as deposits paid to Seller prior to Closing. For items
that exceed this amount, Seller will pay Buyer to service these
accounts at the rate of 1.3X the Buyer's actual salary cost.
q. Buyer agrees that any invoices issued by Seller on or after June 15,
2001 with respect to the Business which are credited back to Seller
after such invoicing occurs shall be repaid to Seller by Buyer
within thirty (30) days of such crediting.
r. Buyer shall provide to Seller at closing a Certificate of Good
Standing dated not more than thirty- (30) days prior to the Closing
Date.
2. REPRESENTATIONS AND WARRANTIES OF THE SELLER
a. Seller hereby represents and warrants to Buyer that:
i. Organization and Good Standing. The Seller is a corporation
duly incorporated, validly existing and in good standing
under the laws of its jurisdiction of incorporation, and
has all corporate powers and all material governmental
licenses, authorizations, consents and approvals required
to carry on its business as now conducted.
ii. Corporate Authorization. The execution, delivery and
performance by Seller of this Agreement and the
consummation by Seller of the transactions contemplated
hereby and thereby are within Seller's corporate powers and
have been duly authorized by all necessary corporate action
on the part of Seller. This Agreement constitutes a valid
and binding agreement of Seller.
iii. Sufficiency of and Title to the Purchased Assets. To the
best of its knowledge, upon consummation of the
transactions contemplated hereby, Buyer will have acquired
good and marketable title in and to, or a valid leasehold
interest in, each of the Purchased Assets.
b. Warranties.
i. Seller has made no warranties to customers of the Business
other than customary implied warranties and those
warranties set forth on printed materials provided with the
products sold to such customers.
ii. Seller provides no representations or warranties as to the
conditions of the Purchased Assets and Buyer is buying them
in an "as is", "where is" condition.
3. REPRESENTATIONS AND WARRANTIES OF BUYER
a. Buyer hereby represents and warrants to Seller that:
i. Organization and Good Standing. Buyer is a corporation duly
incorporated, validly existing and in good standing under
the laws of California and is qualified in each
jurisdiction where the nature of its business or the
ownership of property requires such qualification except
where such failure to qualify shall not have a material
adverse effect on the business or financial ability of the
Buyer and has all corporate powers and all material
governmental licenses, authorizations, consents and
approvals required to carry on its business as now
conducted;
ii. Corporate Authorization. The execution, delivery and
performance by Buyer of this Agreement and the consummation
by Buyer of the transactions contemplated hereby are within
the corporate powers of Buyer and have been duly authorized
by all necessary corporate action on the part of Buyer and
constitutes a valid and binding agreement of Buyer
enforceable in accordance with its terms subject to the
laws of bankruptcy and those laws affecting creditors
rights generally;
iii. No Violation of Other Agreements. Neither the execution and
delivery of the Purchase Agreement nor the consummation of
the transaction contemplated thereby (1) violates any
provision of the Certificate of Incorporation or Bylaws (or
other governing instrument) of the Buyer; (2) breaches or
constitutes a default (or an event) that, with notice or
lapse of time or both, would constitute a default under any
agreement of the Buyer with any other person to the extent
that any such default would constitute a material adverse
effect upon the Company, or (3) violates any statute, law,
regulation, or rule or order applicable to the Buyer;
iv. No Consents Required. No consent, approval or authorization
of, or declaration, filing, or registration with, any state
or federal authorities is required in connection with the
execution, delivery and performance of the Purchase
Agreement or the consummation of the transaction
contemplated thereby; and
4. TAX MATTERS
a. Tax Definitions. The following terms, as used herein, have the
following meanings:
i. "Code" means the Internal Revenue Code of 1986, as amended.
ii. "Post-Closing Tax Period" means any Tax period (or portion
thereof) ending after the Closing Date.
iii. "Pre-Closing Tax Period" means any Tax period (or portion
thereof) ending on or before the close of business on the
Closing Date.
iv. "Proration Date" means the Closing Date.
v. "Tax" means any net income, alternative or add-on minimum
tax, gross income, gross receipts, sales, use, ad valorem,
franchise, capital, paid-up capital, profits, greenmail,
license, withholding, payroll, employment, excise,
severance, stamp, occupation, premium, property,
environmental or windfall profit tax, custom, duty or other
tax, governmental fee or other like assessment or charge or
any kind
whatsoever, together with any interest or any penalty,
addition to tax or additional amount imposed by any
governmental authority (domestic or foreign) responsible
for the imposition of any such tax.
b. Tax Cooperation: Allocation of Taxes.
i. Buyer and Seller agree to furnish or cause to be furnished
to each other, upon request, as promptly as practicable,
such information and assistance relating to the Purchased
Assets as is reasonably necessary for the filing of all Tax
returns, and making of any election related to Taxes, the
preparation for any audit by any taxing authority, and the
prosecution or defense of any claim, suit or proceeding
relating to any Tax return. Seller and Buyer shall
cooperate with each other in the conduct of any audit or
other proceeding related to Taxes involving the Purchased
Assets and each shall execute and deliver such powers of
attorney and other documents as are necessary to carry out
the intent of this Section.
ii. All real property taxes, personal property taxes and
similar ad valorem obligations (except for those Taxes
which are accrued on Seller's financial statements
delivered to Buyer hereunder, which taxes shall constitute
a portion of the Assumed Liabilities) levied with respect
to the Purchased Assets for a taxable period which includes
(but does not end on) the Proration Date (collectively, the
"Apportioned Obligations") shall be apportioned between
Seller and Buyer as of the Proration Date and accrued on
Seller's financial statements delivered to Buyer hereunder
based on the number of days of such taxable period included
in the Pre-Closing Tax Period and the number of days of
such taxable period included in the Post-Closing Period.
Seller shall be liable for the proportionate amount of such
taxes that is attributable to the Pre-Closing Tax Period,
and Buyer shall be liable for the proportionate amount of
such taxes that is attributable to the Post-Closing Tax
Period. Within ninety (90) days after the Closing, Seller
and Buyer shall present a statement to the other setting
forth the amount of the tax liability so accrued under this
Section (4)(b)(ii) together with such supporting evidence
as is reasonably necessary to calculate the proration
amount. The proration amount shall to the extent such
adjustment would have resulted in a net worth adjustment at
the Closing Date, be used to calculate an adjustment to the
purchase price under Section (1)(d)(i). Thereafter, Seller
shall notify Buyer upon receipt of any xxxx for real or
personal property taxes relating to the Purchased Assets,
part or all of which are attributable to the Post-Closing
Tax Period, and shall promptly deliver such xxxx to Buyer
who shall pay the same to the appropriate taxing authority,
provided that if such xxxx covers a Pre-Closing Tax Period,
Seller shall also remit prior to the due date of assessment
to Buyer payment for the proportionate amount of such xxxx
that is attributable to the Pre-Closing Tax Period shall
constitute another adjustment under Section (1)(d)(i).
5. COVENANTS OF SELLER
a. No Solicitations. Unless and until the occurrence of an Event of
Default by Buyer under any instrument evidencing or securing any
indebtedness which arose in connection with the transaction
contemplated hereby, Seller and each of the principal shareholders
of Seller, shall not, for a period of one (1) year following the
Closing Date, employ or solicit, either directly
or indirectly, the performance of services by any employee of Buyer,
which employee was employed by the Seller on the date of Closing.
b. Telephone Numbers. Seller will make commercially reasonable efforts
to assist Buyer in transferring Seller's current telephone and
facsimile numbers to Buyer as of the Closing Date.
c. Name. Seller shall allow Buyer to use the name "IMPRES" and "IMPRES
Technology" at no cost to Buyer, for such time as Buyer deems
necessary.
d. Utilities. Seller will make commercially reasonable efforts to
assist Buyer in transferring Seller's current water, sewage and
electrical services (collectively "Utilities") to Buyer as of the
Closing Date. Seller shall accrue on its financial statements all
charges for Utilities incurred prior to and on the Closing Date.
Buyer agrees that it shall be obligated for charges for Utilities
incurred subsequent to the Closing Date.
e. Release of Liens. Seller will take all action necessary prior to the
Closing Date to release any and all liens or other encumbrances on
the Purchased Assets and the Inventory Assets, if any, including,
without limitation, causing any necessary UCC-2 Termination
Statements to be filed.
6. COVENANTS OF BUYER
a. No Solicitations. Buyer and each of the principal shareholders of
Buyer, shall not, for a period of one (1) year following the payment
in full of all obligations due under section (1)(e)(1) and (1)(g)
above, employ or solicit, either directly or indirectly, the
performance of services by any employee of Seller.
b. Non-Competition. Buyer shall not, for a period of one (1) year
following the payment in full of all obligations due under section
(1)(e)(1) and (1)(g) above, solicit non-Commerce Branch customers of
Seller that were customers of Seller of as of the Closing Date.
c. Buyer shall, should it need additional working capital after the
Closing Date to successfully operate the Business, work with Seller
to evaluate and bring in sources for such additional working capital
and agrees to fully cooperate with such sources. However, both Buyer
and Seller understand and agree that should Buyer need additional
working capital, Seller may not have sources available to recommend
to Buyer and Seller does not guarantee to provide such source or to
provide any such additional working capita required by Buyer.
7. INDEMNIFICATION
a. Indemnification of Seller. Effective on the Closing Date and
thereafter, Buyer shall indemnify and hold harmless Seller and its
directors, officers, employees and agents, and shareholders from and
against any and all liabilities, damages, losses, penalties,
deficiencies, expenses and costs incurred by any of them, including
without limitation reasonable attorneys' and accountants' fees
(hereafter individually a "Loss" and collectively "losses"), arising
from or in connection with:
i. any claim made or litigation instituted by a third party
relating to Buyer's ownership rights in and to the
Purchased Assets;
ii. any liability or obligation of Buyer which relates to the
ownership or use of any of the Purchased Assets or the
conduct of the Business subsequent to the Closing Date
including liabilities arising out of the Assumed
Liabilities, including but not limited to liabilities
arising from or relating thereto;
iii. any claim first made or litigation instituted by a third
party relating to Buyer's conduct of the Business notice
for which claim or litigation is received by Buyer or
Seller subsequent to the Closing Date;
iv. any taxes imposed on Buyer, the Business or any of the
Purchased Assets for any period subsequent to the Closing;
v. any and all actions, suits, proceedings, demands,
assessments or judgments, costs and expenses reasonably
arising out of any of the foregoing matters set forth in
this Section (7)(a); and
vi. the breach by Buyer of any representations or warranties
made by Buyer herein or in any document given by Buyer in
connection with the consummation of the transaction
contemplated hereby.
b. Indemnification of Buyer. Effective on the Closing Date and
thereafter, the Seller shall, jointly and severally, indemnify and
hold harmless Buyer and its directors, officers, employees and
agents, from and against any and all Losses arising from or in
connection with:
i. any claim made or litigation instituted by a third party
relating to Seller's conduct of the Business notice of
which claim or litigation has been received by Seller prior
to or after the Closing Date; or
ii. any and all actions, suits, proceedings, demands,
assessments or judgments, costs and expenses reasonably
arising out of any of the foregoing matters set forth in
this Section (7)(b)(ii) except to the extent such losses
shall arise in connection with or constitute Assumed
Liabilities hereunder.
c. Indemnification Procedure.
i. Claims for Indemnification. Except for Third Party Claims
described below, if an event giving rise to indemnification
hereunder shall have occurred or is threatened, the
indemnified party promptly shall deliver to the
indemnifying party written notice thereof, stating that
such event has occurred or is threatened, describing such
event in reasonable detail and specifying or reasonably
estimating the amount of the prospective Loss and the
method of computation thereof (a `Claim"), all with
reasonable particularity and containing a reference to the
provisions of the this Agreement in respect of which such
right of indemnification is claimed or has arisen (the
"Notice of Claim"). For purposes hereof, any Claim for
indemnification shall be
deemed to have been made as of the date on which the Notice
of Claim is delivered in accordance with the terms of this
Section.
ii. In the event the indemnifying party shall in good faith
dispute the validity of all or any amount of a Claim for
indemnification as set forth in the Notice of Claim, the
indemnifying party shall, within thirty (30) days after
delivery of the Notice of Claim, execute and deliver to the
indemnified party a notice setting forth with reasonable
particularity the grounds, amount of, and basis upon which
the Claim is disputed (the "Dispute Statement").
iii. In the event the Indemnifying party shall within thirty
(30) days deliver to the indemnified party a Dispute
Statement, then the portion of the claim described in the
Notice of Claim disputed by the indemnifying party (the
"Disputed Liability") shall not be due and payable except
in accordance with a final and unappealable judgment or
decision of a court or arbitration tribunal of competent
jurisdiction, or a written agreement between the
indemnifying party and the indemnified party stipulating
the amount of the Admitted Liability (as defined below).
iv. In the event the indemnifying party shall not within thirty
(30) days after receipt of the Notice of Claim deliver to
the indemnified party a Dispute Statement identifying a
Disputed liability, then the amount of the claim described
in the Notice of Claim, or if a Dispute Statement is
delivered, the portion thereof not disputed as a Disputed
Liability, shall be deemed to be admitted (the "Admitted
Liability") and shall, upon the incurring of an actual Loss
arising therefrom, immediately be due and payable.
d. Settlement of Third Party Claims. If the indemnified party shall
receive notice of any Claim by a third party which is or may be
subject to indemnification (a "Third Party Claim"), the indemnified
party shall give the indemnifying party prompt written notice of
such Third Party Claim and shall permit the indemnifying party, at
its option, to participate in the defense of such Third Party Claim
by counsel of its own choice and at its expense. If, however, the
indemnifying party acknowledges in writing to the indemnified party
the indemnifying party's obligation to indemnify the indemnified
party hereunder against all Losses that may result from such Third
Party Claim (subject to the limitations set forth herein), then the
indemnifying party shall be entitled, at its option, to assume and
control the defense of such Third Party Claim at its expense and
through counsel of its choice after delivery of written
notification.
i. In the event the indemnifying party exercises its right to
undertake the defense of any such Third Party Claim, the
indemnified party shall cooperate with the indemnifying
party in such defense and make available to the
indemnifying party, at the indemnifying party's expense,
all witnesses, pertinent records, materials and information
in its possession or under its control relating thereto as
is reasonably required by the indemnifying party. However,
no such Third Party Claim may be settled by the
indemnifying party without the written consent of the
indemnified party, unless the settlement involves only the
payment of money by the indemnifying party. Similarly, no
Third Party Claim shall be settled by the indemnified party
without the written consent of the indemnifying party.
ii. In the event the indemnified party is, directly or
indirectly, conducting the defense against any such Third
Party Claim, the indemnifying party shall cooperate with
the indemnified party in such defense and make available to
it all such witnesses, records, materials and information
in its possession or under its control relating thereto as
is reasonably required by the indemnified party.
8. MISCELLANEOUS
a. Conditions Precedent. This Agreement can be terminated by either
party upon written notice to the other party, in the event that any
of the following shall not have occurred on or before the Closing
Date:
i. Seller shall not have obtained the consent of its lenders
to the transactions contemplated herein.
b. Dispute Resolution.
i. Any and all disputes or differences pertaining to or
arising out of this Agreement or the breach, termination or
invalidity thereof, shall be finally and exclusively
settled by binding arbitration in accordance with the
Commercial Arbitration Rules of the American Arbitration
Association. The arbitration shall be held in Los Angeles,
California before one arbitrator appointed in accordance
with said rules. Judgment upon an award rendered may be
entered in any court having jurisdiction or application may
be made to such court for a judicial acceptance of the
award and an order of enforcement, as the case may be. The
prevailing party in any such proceeding shall be entitled
to its actual attorneys' fees and all other costs in
connection with the arbitration and enforcement of the
arbiter's award.
ii. Either party may, without inconsistency with this
Agreement, seek from a court any interim or provisional
relief that may be necessary to protect the rights or
property of that party, pending the establishment of the
arbitral tribunal or pending the arbitral tribunal's
determination of the merits of the controversy.
c. Expenses. Except as otherwise provided herein, all costs and
expenses incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense.
d. Notices. Any notices required or permitted to be given hereunder
shall be in writing and shall be deemed delivered (i) two (2) days
after being deposited in the mails, (ii) one day after being,
deposited with an express overnight courier service or (iii) the
same day notice is sent by electronic facsimile transmission if such
transmission is made by 5:00 p.m. local time or one day after being
sent by facsimile transmission if such transmission is made after
5:00 p.m., addressed:
if to Buyer, to:
IMPRES Technology Solutions, Inc.
0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
if to Seller, to:
Wareforce Incorporated
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000
Xx Xxxxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000.
e. Successors and Assigns. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns; provided that neither party
may assign, delegate or otherwise transfer any of its rights or
obligations under this Agreement without the consent of the other
party hereto.
f. Governing Law. This Agreement shall be construed in accordance with
and governed by the law of the State of California.
g. Counterparts: Effectiveness. This Agreement may be signed in any
number of counterparts, each of which shall be an original, with the
same effect as if the signatures thereto and hereto were upon the
same instrument.
h. Captions. The captions herein are included for convenience of
reference only and shall be ignored in the construction or
interpretation hereof.
i. Entire Agreement. This Agreement, constitutes the entire agreement
between the parties with respect to the subject matter hereof and
supersedes all prior agreements, understandings and negotiations,
both written and oral, between the parties with respect to the
subject matter of this Agreement No representation, inducement,
promise, understanding, condition or warranty not set forth herein
has been made or relied upon by either party hereto. Neither this
Agreement nor any provision hereof is intended to confer upon any
Person other than the parties hereto any rights or remedies
hereunder.
In witness whereof, the parties hereto here caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
BUYER: SELLER:
IMPRES TECHNOLOGY SOLUTIONS, INC. WAREFORCE INCORPORATED
By: /s/ Xxxxxxx Xx By: /s/ Xxx Xxxxxxxx
----------------------------- --------------------------------
Name: Xxxxxxx Xx Name: Xxx Xxxxxxxx
Title: President Title: General Counsel
EXHIBIT A
ASSIGNMENT AND ASSUMPTION AGREEMENT
Assignment and Assumption Agreement, dated as of June 18, 2001, between
IMPRES Technology Solutions, Inc., a California corporation ("Buyer"), and
Wareforce Incorporated ("Seller"), a California corporation.
WITNESSETH
Whereas, Buyer and Seller have concurrently herewith consummated the
purchase by Buyer of the Purchased Assets pursuant to the terms and conditions
of the Asset Purchase Agreement dated July 16, 2001 between Buyer and Seller,
(the "Asset Purchase Agreement"); capitalized terms not otherwise defined herein
shall have the meaning given them in the Asset Purchase Agreement;
Whereas, pursuant to the Asset Purchase Agreement, Buyer has agreed to
purchase the Purchased Assets and to assume certain liabilities and obligations
of Seller with respect to the Purchased Assets;
Now, therefore, in consideration of the sale and purchase of the
Purchased Assets and in accordance with the terms of the Asset Purchase
Agreement, Buyer and Seller agree as follows:
a) Seller does hereby sell, transfer, assign and deliver to Buyer all of
the right, title and interest of Seller in, to and under the Purchased
Assets.
b) Buyer does hereby accept and assume all the right, title and interest of
Seller in, to and under all of the Purchased Assets and the Lease and
Buyer assumes and agrees to pay, perform and discharge promptly and
fully when due all of the Assumed Liabilities.
This Agreement shall be construed in accordance with and governed by the
laws of the State of California, without regard to the conflicts of law rules of
such state.
This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original, but all of which together shall constitute
one and the same instrument.
In witness whereof, the parties hereto have caused this Agreement to be duly
executed as of the day and year first above written.
BUYER: SELLER:
IMPRES TECHNOLOGY SOLUTIONS, INC. WAREFORCE INCORPORATED
By: /s/ Xxxxxxx Xx By: /s/ Xxx Xxxxxxxx
----------------------------- -------------------------------
Name: Xxxxxxx Xx Name: Xxx Xxxxxxxx
Title: President Title: General Counsel
EXHIBIT B
PROMISSORY NOTE
$165,000 June 18, 2001
FOR VALUE RECEIVED, the undersigned, IMPRES Technology Solutions, Inc.,
a California corporation ("IMPRES"), promises to pay to the order of Wareforce
Incorporated (hereinafter "Lender") its successors and assigns, at 0000
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 or at such other place
as the holder hereof may designate in writing, in lawful money of the United
States of America, One Hundred Sixty Five Thousand Dollars and No Cents
($165,000.00), payable as follows:
(1) One Hundred Sixty Five Thousand Dollars and No Cents
($165,000.00), payable in:
(a) one (1) installment of Two Thousand Dollars and No Cents
($2,000.00) at Closing;
(b) one (1) installment of Twenty Five Thousand, Five Hundred
Dollars and No Cents ($25,500.00) on October 31, 2001; and
(c) five (5) equal installments of Twenty-Seven Thousand, Five
Hundred Dollars and No Cents ($27,500.00) on the following
dates:
December 31, 2001;
March 31, 2002;
June 30, 2002;
September 30, 2002; and
ii) December 31, 2002.
This Note is made without interest. However, in the event that any
payment owed hereunder is late, Lender or its successors or assigns shall have
the right to charge IMPRES interest on any past due amount at the maximum rate
allowed by law.
This Note is secured by a Security Agreement of even date herewith
pledging certain property of IMPRES.
If payment of any installment of principal is not paid when due
hereunder, or upon the occurrence of any Event of Default described in any
agreement evidencing or securing this Note (collectively "Loan Documents") (such
event hereinafter an "Event of Default"), then Lender or any holder hereof shall
have the right and option to declare the unpaid principal and interest balance
hereunder immediately due and payable, without notice.
Time shall be of the essence in the payment of any sums due hereunder
and the performance of any covenants or agreements contained herein or in the
Loan Documents.
Acceptance of any payment in an amount less than the amount due shall be
deemed an acceptance on account only, and the failure to pay the entire amount
then due shall be and continue to be an Event of Default under this Note.
Upon any Event of Default, neither the failure of the holder to promptly
exercise its right to declare the outstanding principal balance and accrued
unpaid interest hereunder to be immediately due and payable, nor the failure of
the holder to demand strict performance of any obligation of any person who may
be liable hereunder, or any guarantor hereof, shall constitute a waiver of any
such rights. In addition, any waiver of any rights which shall be given by the
holder must and shall be in writing, and signed by the holder and then shall be
enforceable only to the extent specifically set forth in writing. Waiver with
reference to one event shall not be construed as continuing or as a bar to or a
waiver of any right or remedy as to a subsequent event.
The remedies of the holder, as provided herein, by law and in any Loan
Documents, are not exclusive and shall be cumulative and concurrent and may be
pursued singly, successively, or together, at the sole discretion of the holder
and may be exercised as often as the occasion therefore shall occur; and the
failure to exercise any such right or remedy shall in no event be construed as a
waiver or release thereof.
The undersigned and all endorsers, guarantors, or any other person who
may be liable hereunder, hereby jointly and severally waive presentment for
payment, demand, notice of nonpayment, notice of protest and protest of this
Note, diligence in collection or bringing suit, and all endorsers, guarantors or
any other person who may be liable hereunder consent to any and all extensions
of time, renewals, waivers or modifications that may be granted by the holder
with respect to payment or other provisions of this Note, said Loan Documents,
and to the release of any collateral or any part thereof, with or without
substitution.
The undersigned, its successors or assigns, shall pay on demand all
costs and expenses, including reasonable attorney's fees, incurred by the holder
in enforcing collection of the indebtedness evidenced by this Note.
Notwithstanding any provision in this Note or in the Loan Documents to
the contrary, nothing herein or therein shall be construed so as to permit or
require the payment of interest in excess of the highest rate of interest
permitted to be charged in connection with the laws of the State of California.
In the event that the interest in excess of such maximum rate of interest is
received, then such excess shall be automatically applied to the principal
balance due hereunder.
The laws of the State of California shall govern this Note.
IN WITNESS WHEREOF, the undersigned has executed this Note the day and
year first written above.
IMPRES TECHNOLOGY SOLUTIONS, INC.
/s/ Xxxxxxx Xx
---------------------------------
Name: Xxxxxxx Xx
Title: President
EXHIBIT C
SECURITY AGREEMENT
THIS SECURITY AGREEMENT made this 18th day of June, 2001, by IMPRES
Technology Solutions, Inc. a California corporation (the Debtor) having its
principal presently located at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000 (whether one or more, hereinafter referred to as the "Debtor"),
in favor of Wareforce Incorporated, its successors and assigns, whose address is
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter
referred to as the "Secured Party").
W I T N E S S E T H:
WHEREAS, Debtor is indebted to the Secured Party in the principal amount
of up to $165,000, as evidenced by its Promissory Note in said amount
(hereinafter referred to as the "Note") of even date herewith executed and
delivered by Debtor in connection with the sale of the assets of Wareforce
Incorporated which are related to its Commerce Branch to Debtor pursuant to a
Purchase Agreement of even date (the "Purchase Agreement"); and
WHEREAS, the sale of the assets of Wareforce Incorporated to the Debtor
is conditioned upon the Debtor further securing the Note by, giving to Secured
Party a security interest in the property described on Schedule "A".
NOW, THEREFORE, in consideration for making of the loan and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby agree as follows:
1. SECURITY INTEREST:
1.1 In consideration of the above mentioned sale, Debtor hereby grants to
Secured Party a security interest (hereinafter referred to as the "Security
Interest") in all of the property of the Debtor described in Exhibit A whether
now owned or hereafter acquired together with any proceeds thereof (hereinafter
referred to as the "Collateral").
1.2 This Security Agreement and the rights hereby (granted shall secure the
following (hereinafter collectively referred to as the "Obligations"):
(a) The principal of, the interest on, and any other sums due under the
Note, and any renewals, extensions or modifications thereof; and
(b) The statutory costs of all legal proceedings brought by the Secured
Party to enforce the Note, all other costs and expenses paid or incurred by the
Secured Party in respect of or in connection with the Collateral, and any other
sums that may become due and payable hereunder by the Debtor; and
(c) Any and all indebtedness, obligations and liabilities of any kind
and nature of the Debtor (or if more than one, by either Debtor) to Secured
Party, direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising.
2. DEBTOR WARRANTS, COVENANTS AND AGREES:
The Debtor hereby warrants, covenants and agrees that:
2.1 The Collateral covered by this Security Agreement is used or purchased
for use primarily for business purposes.
2.2 Although proceeds of Collateral are covered by this Security Agreement,
this shall not be construed to mean that Secured Party consents to any sale of
such property.
2.3 The Collateral will be located at the offices of Debtor listed on
Exhibit A attached hereto and made part hereof (collectively the "Premises").
Except for purposes of replacement and repair of the equipment and for sale of
the inventory in the ordinary course of business, the Debtor will not remove its
Collateral from the Premises, or allow it to be removed, from said Premises
without the prior written consent of the Secured Party. The Debtor will promptly
give written notice to the Secured Party of any cessation of its business
conducted at the location and of any loss or damage by fire or other casualty to
any substantial part of the Collateral.
2.4 The Debtor will, at all reasonable times, allow the Secured Party or its
representatives free and complete access to all of the Debtor's records, for
such inspection and examination as the Secured Party deems necessary. The Debtor
shall also upon request of the Secured Party from time to time submit up-to-date
schedules of the items comprising the Collateral owned by it in such detail as
the Secured Party shall reasonably require.
2.5 The Debtor at its cost and expense will protect and defend this
Agreement, all of the rights of the Secured Party hereunder, and the Collateral
owned by it against the claims and demands of all other parties.
2.6 The Debtor will at all times keep and maintain the Collateral owned by
it in good order, repair and condition, and will promptly replace any part
thereof that from time to time may become obsolete, badly worn, or in a state of
disrepair, or, if supplies, be consumed in the normal course of the Debtor's
business operations. All such replacements shall be free of any other lien,
security interest or encumbrance of any nature. The Debtor may sell or dispose
of only that part of the Collateral that Debtor is obligated to replace, and,
unless Secured Party then agrees otherwise in writing, all proceeds from any
such sale or disposition in excess of the amount expended for such replacements
shall promptly be paid over by the Debtor to the Secured Party to be applied
against the sums secured hereby, whether or not such sums are then due and
payable.
2.7 The Secured Party or its representatives may at any and all reasonable
times inspect the Collateral and may enter upon any and all Premises where the
same is kept or might be located.
2.8 The Debtor will not, without obtaining the prior written consent of
Secured Party, transfer or permit any transfer of the Collateral owned by it or
any part thereof to be made, or any interest therein to be created by way of a
sale (except as permitted above), or by way of a grant of a security interest,
or by way of a levy or other judicial process. Notwithstanding anything
contained herein to the contrary the Secured Party agrees that it will
subordinate any security interest herein granted to any security interest
required of Debtor by any financial institution or any other major manufacturer,
vendor or distributor with a secured financing program in place.
2.9 The Debtor will promptly notify Secured Party of any levy, distraint or
other seizure by legal process or otherwise of any part of its Collateral, and
of any threatened or filed claims or proceedings that might in any way affect or
impair any of the terms of this Agreement.
2.10 The Secured Party at all times shall have a perfected security interest
in the Collateral that shall be prior to any other interests therein. Debtor
will do all acts and things, and will execute, and file, all instruments
(including Security Agreements, Financing Statements, Continuation Statements,
etc.) requested by, the Secured Party to establish, maintain and continue the
perfected Security Interest of Secured Party in the Collateral, and will
promptly on demand, pay all costs and expenses of filing and recording,
including the costs of any searches deemed necessary by Secured Party from time
to time to establish and determine the validity and the continuing priority of
the Security Interest of Secured Party, and also pay all other claims and
charges that in the opinion of Secured Party might prejudice, imperil or
otherwise affect the Collateral or its security interest therein.
2.11 The Debtor at its expense will obtain and maintain in force insurance
policies covering losses or damage to its Collateral. The insurance policies to
be obtained by the Debtor shall be in form and amounts acceptable to Secured
Party. The Secured Party is hereby irrevocably appointed the Debtor's attorney
in fact to endorse any check or draft that may be payable to the Debtor, alone
or jointly with other payees, so that the Secured Party may collect the proceeds
payable for any loss under such insurance. The proceeds of such insurance, less
any costs and expenses incurred or paid by the Secured Party in the collection
thereof shall be applied in the sole discretion of the Secured Party, either
toward the cost of the repair or replacement of the items damaged or destroyed,
or on account of any sums secured hereby, whether or not then due or payable.
2.12 The Secured Party may, at its option, and without any obligation to do
so, pay, perform and discharge any and all amounts, costs, expenses and
liabilities herein agreed to be paid or performed by Debtor, and all amounts
expended by the Secured Party, in so doing shall become part of the Obligations
secured hereby, and shall be immediately due and payable by Debtor to the
Secured Party upon demand therefore, and shall bear interest at the interest
rate, as defined in the Note, from the dates of such expenditures until paid.
2.13 Debtor will give Secured Party immediate written notice of any change
in location of Debtor's chief executive office.
3. EVENTS OF DEFAULT:
The occurrence of any of the following events shall constitute and is hereby
defined to be, an "Event of Default":
3.1 Any failure or neglect to observe or perform any of the terms,
provisions, promises, agreements or covenants of this Security Agreement and the
continuance of such failure or neglect after notice thereof to the Debtor; or
3.2 Any failure of the maker to pay any installment of principal and/or
interest, or any other sum due under the Note or of Debtor to pay any other
Obligations secured hereby, at the time such installment shall become due and
payable.
3.3 Any warranty, representation or statement contained in this Security
Agreement made or furnished to the Secured Party by or on behalf of the Debtor,
which shall be or shall prove to have been materially false when made or
furnished; or
4. SECURED PARTY'S REMEDIES:
Upon the occurrence of any Event of Default hereunder, Secured Party shall have
the following rights and remedies, at any time after giving notice and after the
expiration of the grace period provided herein:
4.1 The Secured Party may, at its option, declare all or any part of the
Obligations immediately due and payable and Debtor shall on demand by Secured
Party deliver the Collateral to the Secured Party. Secured Party may, without
further notice or demand and without legal process, take possession of the
Collateral wherever found and, for this purpose, may enter upon said Real
Property or upon any other property occupied by or in the control of the Debtor.
The Secured Party may require the Debtor to assemble the Collateral and make it
available to the Secured Party at a place to be designated by the Secured Party
that is reasonably convenient to both parties.
4.2 The Secured Party may pursue any legal remedy available to collect all
sums secured hereby and to enforce its title in and right to possession of the
Collateral, and to enforce any and all other rights or remedies available to it,
and no such action shall operate as a waiver of any other right or remedy of the
Secured Party under the terms hereof, or under the laws of the State of
California.
4.3 Debtor waives any requirements of presentment, protest, notices of
protest, notices of dishonor, and all other formalities. Debtor waives all
rights and/or privilege it might otherwise have to require Secured Party to
proceed against or exhaust the Collateral encumbered hereby or by any other
security document or instrument securing said Note or to proceed against any
guarantor of such indebtedness, or to pursue any other remedy available to
Secured Party in any particular manner or order under the legal or equitable
doctrine or principle of marshalling and/or suretyship and further agrees that
Secured Party may proceed against any or all of the Collateral encumbered hereby
or by any other security document or instrument securing said Note in the event
of default and after expiration of any applicable grace period following notice
in such order and manner as Secured Party in its sole discretion may determine.
Any Debtor that has signed this Security Agreement as a surety or accommodation
party, or that has subjected its property to this Security Agreement to secure
the indebtedness of another hereby expressly waives any defense arising by
reason of any disability or other defense of the maker or by reason of the
cessation from any cause whatsoever of the liability of maker, and waives the
benefit of any statutes of limitation affecting the enforcement hereof.
4.4 The Secured Party, upon obtaining possession of the Collateral or any
part thereof, may sell the same at public or private sale either with or without
having such Collateral at the place of sale, and with notice to Debtor as
provided in paragraph 4.6 herein. The proceeds of such sale, after deducting
therefore all expenses of the Secured Party in taking, storing, repairing and
selling the Collateral (including reasonable attorneys' fees) shall be applied
to the payment of any part or all of the obligations and any other indebtedness
or liability of the Debtor to the Secured Party, and any surplus thereafter
remaining shall be paid to the Debtor, or any other person that may be legally
entitled thereto. In the event of a deficiency, between such net proceeds from
the sale of Collateral and the total amount owing by the Debtor under the
Obligations, the Debtor (or if more than one, jointly and severally) will
promptly upon demand pay the amount of such deficiency to the Secured Party.
4.5 At any sale, public or private, of the Collateral or any part thereof,
made in the enforcement of the rights and remedies hereunder of the Secured
Party; the Secured Party may, so far as may be lawful, purchase any part or
parts of the Collateral or all thereof offered at such sale.
4.6 Secured Party shall give Debtor reasonable notice of any sale or other
disposition of the Collateral or any part thereof. Debtor agrees that notice and
demand shall be conclusively deemed to be reasonable and effective if such
notice is mailed by registered or certified mail postage prepaid, to the Debtor
at the address above given, or at such other address as the Debtor may designate
hereafter by written notice to the Secured Party, at least ten (10) days prior
to such sale or other disposition.
4.7 The Secured Party shall have all the rights and remedies afforded a
Secured Party under the California Uniform Commercial Code and all other legal
or equitable remedies provided by the laws of the United States and the State of
California.
5. MISCELLANEOUS PROVISIONS:
5.1 No Event of Default hereunder by Debtor shall be deemed to have been
waived by the Secured Party except by a writing to that effect signed on behalf
of the Secured Party by an officer thereof and no waiver of any such Event of
Default shall operate as a waiver of any such Event of Default shall operate as
a waiver of any other Event of Default on a future occasion, or as a waiver of
that Event of Default after written notice thereof and demand by Secured Party
for strict performance of this Agreement. All rights, remedies and privileges of
the Secured Party hereunder shall be cumulative and not alternative, and shall,
whether or not specifically so expressed, inure to the benefit of the Secured
Party, its successors and assigns, and all obligations of the Debtor shall bind
its successors and legal representatives.
5.2 Until an Event of Default and expiration of any applicable grace period,
the Debtor may retain possession of the Collateral and may use it in any lawful
manner not inconsistent with this Security Agreement or with the provisions of
any policies of insurance thereon.
5.3 The terms herein shall have the meanings in and be construed under the
California Commercial Code and all issues arising hereunder shall be governed by
the laws of the State of California. Whenever possible each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement.
5.4 No modification, rescission, waiver, release or amendment of any
provision of this Security Agreement shall be made except by a written agreement
subscribed by Debtor and a duly authorized officer of Secured Party.
5.5 This Security Agreement shall remain in full force and effect until all
of the indebtedness of the Debtor to the Secured Party, and any extensions or
renewals thereof shall be paid in full.
5.6 Secured Party and Debtor as used herein shall include the heirs,
executors or administrator, or successors or assigns of those parties. The
provisions of this Agreement shall apply to the parties according to the context
hereof and without regard to the number or gender of words and expressions used
herein.
5.7 A carbon, photographic or other reproduced copy of this Security
Agreement and/or any financing statement relating hereto shall be sufficient for
filing and/or recording as a financing statement.
IN WITNESS WHEREOF, this Security Agreement has been executed and delivered
on behalf of and in the name of Debtor on the date indicated above.
SECURED PARTY: DEBTOR:
Wareforce Incorporated IMPRES Technology Solutions, Inc.
By: /s/ Xxx Xxxxxxxx By: /s/ Xxxxxxx Xx
---------------------------- ----------------------------
Name: Xxx Xxxxxxxx Name: Xxxxxxx Xx
Its: General Counsel Its: President
SCHEDULE "A"
EXHIBIT D
PROMISSORY NOTE
Up to $300,000 June 18, 2001
FOR VALUE RECEIVED, the undersigned, IMPRES Technology Solutions, Inc.,
a California corporation ("IMPRES"), promises to pay to the order of Wareforce
Incorporated (hereinafter "Lender") its successors and assigns, at 0000
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 or at such other place
as the holder hereof may designate in writing, in lawful money of the United
States of America, an amount equal FIFTEEN PERCENT (15%) of IMPRES' Earnings
Before Depreciation, Taxes and Amortization and officers' and owners'
compensation (such officers' and owners' compensation not to exceed Sixty
Thousand Dollars and No Cents ($60,000.00) per quarter for purposes of this
calculation including compensation paid to any other investors or partners in
the business), but excluding costs for asset write-offs, other non-operating
expenses and other expenses not related to the day-to-day operation of the
Business ("Adjusted EBDTA"), as defined by Generally Accepted Accounting
Principals. Such payments shall be made on the last calendar day of each
calendar quarter, the first payment being on December 31, 2001 and the last
being on December 31, 2006.
The maximum amount of principal IMPRES shall be required to pay to
Lender under this Note is Three Hundred Thousand Dollars and No Cents
($300,000.00).
There shall be no penalty for prepayment.
This Note is made without interest. However, in the event that any
payment owed hereunder is late, Lender or its successors or assigns shall have
the right to charge IMPRES interest on any outstanding principal at the maximum
rate allowed by law.
This Note is secured by a Security Agreement of even date herewith
pledging certain property of IMPRES.
If payment of any installment of principal is not paid when due
hereunder, or upon the occurrence of any Event of Default described in any
agreement evidencing or securing this Note (collectively "Loan Documents") (such
event hereinafter an "Event of Default"), then Lender or any holder hereof shall
have the right and option to declare the unpaid principal and interest balance
hereunder immediately due and payable, without notice.
Time shall be of the essence in the payment of any sums due hereunder
and the performance of any covenants or agreements contained herein or in the
Loan Documents.
Acceptance of any payment in an amount less than the amount due shall be
deemed an acceptance on account only, and the failure to pay the entire amount
then due shall be and continue to be an Event of Default under this Note.
Upon any Event of Default, neither the failure of the holder to promptly
exercise its right to declare the outstanding principal balance and accrued
unpaid interest hereunder to be immediately due and payable, nor the failure of
the holder to demand strict performance of any obligation of any person who may
be liable hereunder, or any guarantor hereof, shall constitute a waiver of any
such rights. In
addition, any waiver of any rights which shall be given by the holder must and
shall be in writing, and signed by the holder and then shall be enforceable only
to the extent specifically set forth in writing. Waiver with reference to one
event shall not be construed as continuing or as a bar to or a waiver of any
right or remedy as to a subsequent event.
The remedies of the holder, as provided herein, by law and in any Loan
Documents, are not exclusive and shall be cumulative and concurrent and may be
pursued singly, successively, or together, at the sole discretion of the holder
and may be exercised as often as the occasion therefore shall occur; and the
failure to exercise any such right or remedy shall in no event be construed as a
waiver or release thereof.
The undersigned and all endorsers, guarantors, or any other person who
may be liable hereunder, hereby jointly and severally waive presentment for
payment, demand, notice of nonpayment, notice of protest and protest of this
Note, diligence in collection or bringing suit, and all endorsers, guarantors or
any other person who may be liable hereunder consent to any and all extensions
of time, renewals, waivers or modifications that may be granted by the holder
with respect to payment or other provisions of this Note, said Loan Documents,
and to the release of any collateral or any part thereof, with or without
substitution.
The undersigned, its successors or assigns, shall pay on demand all
costs and expenses, including reasonable attorney's fees, incurred by the holder
in enforcing collection of the indebtedness evidenced by this Note.
Notwithstanding any provision in this Note or in the Loan Documents to
the contrary, nothing herein or therein shall be construed so as to permit or
require the payment of interest in excess of the highest rate of interest
permitted to be charged in connection with the laws of the State of California.
In the event that the interest in excess of such maximum rate of interest is
received, then such excess shall be automatically applied to the principal
balance due hereunder.
The laws of the State of California shall govern this Note.
IN WITNESS WHEREOF, the undersigned has executed this Note the day and
year first written above.
IMPRES TECHNOLOGY SOLUTIONS, INC.
/s/ Xxxxxxx Xx
---------------------------------
Name: Xxxxxxx Xx
Title: President
EXHIBIT E
SECURITY AGREEMENT
THIS SECURITY AGREEMENT made this 18th day of June, 2001, by IMPRES
Technology Solutions, Inc. a California corporation (the Debtor) having its
principal presently located at 0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx,
Xxxxxxxxxx 00000 (whether one or more, hereinafter referred to as the "Debtor"),
in favor of Wareforce Incorporated, its successors and assigns, whose address is
0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 (hereinafter
referred to as the "Secured Party").
W I T N E S S E T H:
WHEREAS, Debtor is indebted to the Secured Party for the payment to
Secured Party of an amount equal to FIFTEEN PERCENT (15%) of Debtor's Earnings
Before Depreciation, Taxes and Amortization and officers' and owners'
compensation (such officers' and owners' compensation not to exceed Sixty
Thousand Dollars and No Cents ($60,000.00) per quarter for purposes of this
calculation including compensation paid to any other investors or partners in
the business), but excluding costs for asset write-offs, other non-operating
expenses and other expenses not related to the day-to-day operation of the
Business ("Adjusted EBDTA"), as defined by Generally Accepted Accounting
Principals, with the maximum principal amount being required to be paid of Three
Hundred Thousand Dollars and No Cents ($300,000.00); such payments to be made on
the last calendar day of each calendar quarter, the first payment being on
December 31, 2001 and the last being on December 31, 2006 and as evidenced by
its Promissory Note in said amount (hereinafter referred to as the "Note") of
even date herewith executed and delivered by Debtor in connection with the sale
of the assets of Wareforce Incorporated which are related to its Commerce Branch
to Debtor pursuant to a Purchase Agreement of even date (the "Purchase
Agreement"); and
WHEREAS, the advancement of sums by Xxxxxxxxx.xxx, Inc. to the Debtor is
conditioned upon the Debtor further securing the Note by giving to Secured Party
a security interest in the property described on Schedule "A".
NOW, THEREFORE, in consideration for making of the loan and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby agree as follows:
1) SECURITY INTEREST:
a) In consideration of the above mentioned sale, Debtor hereby grants to
Secured Party a security interest (hereinafter referred to as the
"Security Interest") in all of the property of the Debtor described in
Exhibit A whether now owned or hereafter acquired together with any
proceeds thereof (hereinafter referred to as the "Collateral").
b) This Security Agreement and the rights hereby (granted shall secure the
following (hereinafter collectively referred to as the "Obligations"):
2) The principal of, the interest on, and any other sums due under the Note,
and any renewals, extensions or modifications thereof; and
i) (b) The statutory costs of all legal proceedings brought by the
Secured Party to enforce the Note, all other costs and expenses paid
or incurred by the Secured Party in respect of or in connection with
the Collateral, and any other sums that may become due and payable
hereunder by the Debtor; and
3) Any and all indebtedness, obligations and liabilities of any kind and nature
of the Debtor (or if more than one, by either Debtor) to Secured Party,
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising.
4) DEBTOR WARRANTS, COVENANTS AND AGREES:
a) The Debtor hereby warrants, covenants and agrees that:
b) The Collateral covered by this Security Agreement is used or purchased
for use primarily for business purposes.
c) Although proceeds of Collateral are covered by this Security Agreement,
this shall not be construed to mean that Secured Party consents to any
sale of such property.
d) The Collateral will be located at the offices of Debtor listed on
Exhibit A attached hereto and made part hereof (collectively the
"Premises"). Except for purposes of replacement and repair of the
equipment and for sale of the inventory in the ordinary course of
business, the Debtor will not remove its Collateral from the Premises,
or allow it to be removed, from said Premises without the prior written
consent of the Secured Party. The Debtor will promptly give written
notice to the Secured Party of any cessation of its business conducted
at the location and of any loss or damage by fire or other casualty to
any substantial part of the Collateral.
e) The Debtor will, at all reasonable times, allow the Secured Party or its
representatives free and complete access to all of the Debtor's records,
for such inspection and examination as the Secured Party deems
necessary. The Debtor shall also upon request of the Secured Party from
time to time submit up-to-date schedules of the items comprising the
Collateral owned by it in such detail as the Secured Party shall
reasonably require.
f) The Debtor at its cost and expense will protect and defend this
Agreement, all of the rights of the Secured Party hereunder, and the
Collateral owned by it against the claims and demands of all other
parties.
g) The Debtor will at all times keep and maintain the Collateral owned by
it in good order, repair and condition, and will promptly replace any
part thereof that from time to time may become obsolete, badly worn, or
in a state of disrepair, or, if supplies, be consumed in the normal
course of the Debtor's business operations. All such replacements shall
be free of any other lien, security interest or encumbrance of any
nature. The Debtor may sell or dispose of only that part of the
Collateral that Debtor is obligated to replace, and, unless Secured
Party then agrees otherwise in writing, all proceeds from any such sale
or disposition in excess of the amount expended for such replacements
shall promptly be paid over by the Debtor to the Secured Party to be
applied against the sums secured hereby, whether or not such sums are
then due and payable.
h) The Secured Party or its representatives may at any and all reasonable
times inspect the Collateral and may enter upon any and all Premises
where the same is kept or might be located.
i) The Debtor will not, without obtaining the prior written consent of
Secured Party, transfer or permit any transfer of the Collateral owned
by it or any part thereof to be made, or any interest therein to be
created by way of a sale (except as permitted above), or by way of a
grant of a security interest, or by way of a levy or other judicial
process. Notwithstanding anything contained herein to the contrary the
Secured Party agrees that it will subordinate any security interest
herein granted to any security interest required of Debtor by any
financial institution or any other major manufacturer, vendor or
distributor with a secured financing program in place.
j) The Debtor will promptly notify Secured Party of any levy, distraint or
other seizure by legal process or otherwise of any part of its
Collateral, and of any threatened or filed claims or proceedings that
might in any way affect or impair any of the terms of this Agreement.
k) 2.10 The Secured Party at all times shall have a perfected security
interest in the Collateral that shall be prior to any other interests
therein. Debtor will do all acts and things, and will execute, and file,
all instruments (including Security Agreements, Financing Statements,
Continuation Statements, etc.) requested by, the Secured Party to
establish, maintain and continue the perfected Security Interest of
Secured Party in the Collateral, and will promptly on demand, pay all
costs and expenses of filing and recording, including the costs of any
searches deemed necessary by Secured Party from time to time to
establish and determine the validity and the continuing priority of the
Security Interest of Secured Party, and also pay all other claims and
charges that in the opinion of Secured Party might prejudice, imperil or
otherwise affect the Collateral or its security interest therein.
l) The Debtor at its expense will obtain and maintain in force insurance
policies covering losses or damage to its Collateral. The insurance
policies to be obtained by the Debtor shall be in form and amounts
acceptable to Secured Party. The Secured Party is hereby irrevocably
appointed the Debtor's attorney in fact to endorse any check or draft
that may be payable to the Debtor, alone or jointly with other payees,
so that the Secured Party may collect the proceeds payable for any loss
under such insurance. The proceeds of such insurance, less any costs and
expenses incurred or paid by the Secured Party in the collection thereof
shall be applied in the sole discretion of the Secured Party, either
toward the cost of the repair or replacement of the items damaged or
destroyed, or on account of any sums secured hereby, whether or not then
due or payable.
m) The Secured Party may, at its option, and without any obligation to do
so, pay, perform and discharge any and all amounts, costs, expenses and
liabilities herein agreed to be paid or performed by Debtor, and all
amounts expended by the Secured Party, in so doing shall become part of
the Obligations secured hereby, and shall be immediately due and payable
by Debtor to the Secured Party upon demand therefore, and shall bear
interest at the interest rate, as defined in the Note, from the dates of
such expenditures until paid.
n) Debtor will give Secured Party immediate written notice of any change in
location of Debtor's chief executive office.
5) EVENTS OF DEFAULT:
6) The occurrence of any of the following events shall constitute and is hereby
defined to be, an "Event of Default":
a) Any failure or neglect to observe or perform any of the terms,
provisions, promises, agreements or covenants of this Security Agreement
and the continuance of such failure or neglect after notice thereof to
the Debtor; or
b) Any failure of the maker to pay any installment of principal and/or
interest, or any other sum due under the Note or of Debtor to pay any
other Obligations secured hereby, at the time such installment shall
become due and payable.
c) Any warranty, representation or statement contained in this Security
Agreement made or furnished to the Secured Party by or on behalf of the
Debtor, which shall be or shall prove to have been materially false when
made or furnished; or
7) SECURED PARTY'S REMEDIES:
8) Upon the occurrence of any Event of Default hereunder, Secured Party shall
have the following rights and remedies, at any time after giving notice and
after the expiration of the grace period provided herein:
a) The Secured Party may, at its option, declare all or any part of the
Obligations immediately due and payable and Debtor shall on demand by
Secured Party deliver the Collateral to the Secured Party. Secured Party
may, without further notice or demand and without legal process, take
possession of the Collateral wherever found and, for this purpose, may
enter upon said Real Property or upon any other property occupied by or
in the control of the Debtor. The Secured Party may require the Debtor
to assemble the Collateral and make it available to the Secured Party at
a place to be designated by the Secured Party that is reasonably
convenient to both parties.
b) The Secured Party may pursue any legal remedy available to collect all
sums secured hereby and to enforce its title in and right to possession
of the Collateral, and to enforce any and all other rights or remedies
available to it, and no such action shall operate as a waiver of any
other right or remedy of the Secured Party under the terms hereof, or
under the laws of the State of California.
c) Debtor waives any requirements of presentment, protest, notices of
protest, notices of dishonor, and all other formalities. Debtor waives
all rights and/or privilege it might otherwise have to require Secured
Party to proceed against or exhaust the Collateral encumbered hereby or
by any other security document or instrument securing said Note or to
proceed against any guarantor of such indebtedness, or to pursue any
other remedy available to Secured Party in any particular manner or
order under the legal or equitable doctrine or principle of marshalling
and/or suretyship and further agrees that Secured Party may proceed
against any or all of the Collateral encumbered hereby or by any other
security document or instrument securing said Note in the event of
default and after expiration of any applicable grace period following
notice in such order and manner as Secured Party in its sole discretion
may determine. Any Debtor that has signed this Security Agreement as a
surety or accommodation party, or that has subjected its property to
this Security Agreement to secure the indebtedness of another hereby
expressly waives any defense arising by reason of any disability or
other defense of the maker or by reason of the cessation from any
cause whatsoever of the liability of maker, and waives the benefit of
any statutes of limitation affecting the enforcement hereof.
d) The Secured Party, upon obtaining possession of the Collateral or any
part thereof, may sell the same at public or private sale either with or
without having such Collateral at the place of sale, and with notice to
Debtor as provided in paragraph 4.6 herein. The proceeds of such sale,
after deducting therefrom all expenses of the Secured Party in taking,
storing, repairing and selling the Collateral (including reasonable
attorneys' fees) shall be applied to the payment of any part or all of
the obligations and any other indebtedness or liability of the Debtor to
the Secured Party, and any surplus thereafter remaining shall be paid to
the Debtor, or any other person that may be legally entitled thereto. In
the event of a deficiency, between such net proceeds from the sale of
Collateral and the total amount owing by the Debtor under the
Obligations, the Debtor (or if more than one, jointly and severally)
will promptly upon demand pay the amount of such deficiency to the
Secured Party.
e) At any sale, public or private, of the Collateral or any part thereof,
made in the enforcement of the rights and remedies hereunder of the
Secured Party; the Secured Party may, so far as may be lawful, purchase
any part or parts of the Collateral or all thereof offered at such sale.
f) Secured Party shall give Debtor reasonable notice of any sale or other
disposition of the Collateral or any part thereof. Debtor agrees that
notice and demand shall be conclusively deemed to be reasonable and
effective if such notice is mailed by registered or certified mail
postage prepaid, to the Debtor at the address above given, or at such
other address as the Debtor may designate hereafter by written notice to
the Secured Party, at least ten (10) days prior to such sale or other
disposition.
g) The Secured Party shall have all the rights and remedies afforded a
Secured Party under the California Uniform Commercial Code and all other
legal or equitable remedies provided by the laws of the United States
and the State of California.
9) MISCELLANEOUS PROVISIONS:
a) No Event of Default hereunder by Debtor shall be deemed to have been
waived by the Secured Party except by a writing to that effect signed on
behalf of the Secured Party by an officer thereof and no waiver of any
such Event of Default shall operate as a waiver of any such Event of
Default shall operate as a waiver of any other Event of Default on a
future occasion, or as a waiver of that Event of Default after written
notice thereof and demand by Secured Party for strict performance of
this Agreement. All rights, remedies and privileges of the Secured Party
hereunder shall be cumulative and not alternative, and shall, whether or
not specifically so expressed, inure to the benefit of the Secured
Party, its successors and assigns, and all obligations of the Debtor
shall bind its successors and legal representatives.
b) Until an Event of Default and expiration of any applicable grace period,
the Debtor may retain possession of the Collateral and may use it in any
lawful manner not inconsistent with this Security Agreement or with the
provisions of any policies of insurance thereon.
c) The terms herein shall have the meanings in and be construed under the
California Commercial Code and all issues arising hereunder shall be
governed by the laws of the State of California.
Whenever possible each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if
any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Agreement.
d) No modification, rescission, waiver, release or amendment of any
provision of this Security Agreement shall be made except by a written
agreement subscribed by Debtor and a duly authorized officer of Secured
Party.
e) This Security Agreement shall remain in full force and effect until all
of the indebtedness of the Debtor to the Secured Party, and any
extensions or renewals thereof shall be paid in full.
f) Secured Party and Debtor as used herein shall include the heirs,
executors or administrator, or successors or assigns of those parties.
The provisions of this Agreement shall apply to the parties according to
the context hereof and without regard to the number or gender of words
and expressions used herein.
g) A carbon, photographic or other reproduced copy of this Security
Agreement and/or any financing statement relating hereto shall be
sufficient for filing and/or recording as a financing statement.
IN WITNESS WHEREOF, this Security Agreement has been executed and delivered
on behalf of and in the name of Debtor on the date indicated above.
SECURED PARTY: DEBTOR:
Wareforce Incorporated IMPRES Technology Solutions, Inc.
By: Xxx Xxxxxxxx By: Xxxxxxx Xx
------------------------- -----------------------------
Name: Xxx Xxxxxxxx Name: Xxxxxxx Xx
Its: General Counsel Its: President
SCHEDULE "A"
EXHIBIT F
PROMISSORY NOTE
$_________ June 18, 2001
FOR VALUE RECEIVED, the undersigned, IMPRES Technology Solutions, Inc.,
a California corporation ("IMPRES"), promises to pay to the order of Wareforce
Incorporated (hereinafter "Lender") its successors and assigns, at 0000
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 or at such other place
as the holder hereof may designate in writing, in lawful money of the United
States of America, no later than July 31, 2001 an amount equal to __________
DOLLARS AND ________ CENTS ($_________) to cover IMPRES' payroll for the period
from June 16, 2001 to July 7, 2001.
There shall be no penalty for prepayment.
This Note is made without interest. However, in the event that any
payment owed hereunder is late, Lender or its successors or assigns shall have
the right to charge IMPRES interest on any outstanding principal at the maximum
rate allowed by law.
This Note is secured by a Security Agreement of even date herewith
pledging certain property of IMPRES.
If payment of any installment of principal is not paid when due
hereunder, or upon the occurrence of any Event of Default described in any
agreement evidencing or securing this Note (collectively "Loan Documents") (such
event hereinafter an "Event of Default"), then Lender or any holder hereof shall
have the right and option to declare the unpaid principal and interest balance
hereunder immediately due and payable, without notice.
Time shall be of the essence in the payment of any sums due hereunder
and the performance of any covenants or agreements contained herein or in the
Loan Documents.
Acceptance of any payment in an amount less than the amount due shall be
deemed an acceptance on account only, and the failure to pay the entire amount
then due shall be and continue to be an Event of Default under this Note.
Upon any Event of Default, neither the failure of the holder to promptly
exercise its right to declare the outstanding principal balance and accrued
unpaid interest hereunder to be immediately due and payable, nor the failure of
the holder to demand strict performance of any obligation of any person who may
be liable hereunder, or any guarantor hereof, shall constitute a waiver of any
such rights. In addition, any waiver of any rights which shall be given by the
holder must and shall be in writing, and signed by the holder and then shall be
enforceable only to the extent specifically set forth in writing. Waiver with
reference to one event shall not be construed as continuing or as a bar to or a
waiver of any right or remedy as to a subsequent event.
The remedies of the holder, as provided herein, by law and in any Loan
Documents, are not exclusive and shall be cumulative and concurrent and may be
pursued singly, successively, or together, at the sole discretion of the holder
and may be exercised as often as the occasion therefore shall occur; and
the failure to exercise any such right or remedy shall in no event be construed
as a waiver or release thereof.
The undersigned and all endorsers, guarantors, or any other person who
may be liable hereunder, hereby jointly and severally waive presentment for
payment, demand, notice of nonpayment, notice of protest and protest of this
Note, diligence in collection or bringing suit, and all endorsers, guarantors or
any other person who may be liable hereunder consent to any and all extensions
of time, renewals, waivers or modifications that may be granted by the holder
with respect to payment or other provisions of this Note, said Loan Documents,
and to the release of any collateral or any part thereof, with or without
substitution.
The undersigned, its successors or assigns, shall pay on demand all
costs and expenses, including reasonable attorney's fees, incurred by the holder
in enforcing collection of the indebtedness evidenced by this Note.
Notwithstanding any provision in this Note or in the Loan Documents to
the contrary, nothing herein or therein shall be construed so as to permit or
require the payment of interest in excess of the highest rate of interest
permitted to be charged in connection with the laws of the State of California.
In the event that the interest in excess of such maximum rate of interest is
received, then such excess shall be automatically applied to the principal
balance due hereunder.
The laws of the State of California shall govern this Note.
IN WITNESS WHEREOF, the undersigned has executed this Note the day and
year first written above.
IMPRES TECHNOLOGY SOLUTIONS, INC.
Xxxxxxx Xx
---------------------------------
Name: Xxxxxxx Xx
Title: President
EXHIBIT G
SECURITY AGREEMENT
THIS SECURITY AGREEMENT made this 18th day of June, 2001, by IMPRES
Technology Solutions, Inc. a California corporation (the Debtor) having its
principal offices presently located at 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000,
Xxxxxxxx, Xxxxxxxxxx 00000 (whether one or more, hereinafter referred to as the
"Debtor"), in favor of Wareforce Incorporated, its successors and assigns, whose
address is 0000 Xxxxxxxxx Xxxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000
(hereinafter referred to as the "Secured Party").
W I T N E S S E T H:
WHEREAS, Debtor is indebted to the Secured Party in the principal amount
of ______________ DOLLARS AND _______ CENTS ($________), as evidenced by its
Promissory Note in said amount (hereinafter referred to as the "Note") of even
date herewith executed and delivered by Debtor in connection with the Secured
Party's advancing such sums to cover Debtor's payroll for the period from June
16, 2001 to July 7, 2001 as part of the sale of the assets of Wareforce
Incorporated which are related to its Commerce Branch to Debtor pursuant to a
Purchase Agreement of even date (the "Purchase Agreement"); and
WHEREAS, the advancement of sums by Wareforce Incorporated to the Debtor
is conditioned upon the Debtor further securing the Note by, giving to Secured
Party a security interest in the property described on Schedule "A".
NOW, THEREFORE, in consideration for making of the loan and for other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties do hereby agree as follows:
1) SECURITY INTEREST:
a) In consideration of the above mentioned sale, Debtor hereby grants to
Secured Party a security interest (hereinafter referred to as the
"Security Interest") in all of the property of the Debtor described in
Exhibit A whether now owned or hereafter acquired together with any
proceeds thereof (hereinafter referred to as the "Collateral").
b) This Security Agreement and the rights hereby (granted shall secure the
following (hereinafter collectively referred to as the "Obligations"):
2) The principal of, the interest on, and any other sums due under the Note,
and any renewals, extensions or modifications thereof; and
i) (b) The statutory costs of all legal proceedings brought by the Secured
Party to enforce the Note, all other costs and expenses paid or incurred
by the Secured Party in respect of or in connection with the Collateral,
and any other sums that may become due and payable hereunder by the
Debtor; and
3) Any and all indebtedness, obligations and liabilities of any kind and nature
of the Debtor (or if more than one, by either Debtor) to Secured Party,
direct or indirect, absolute or contingent, due or to become due, now
existing or hereafter arising.
4) DEBTOR WARRANTS, COVENANTS AND AGREES:
a) The Debtor hereby warrants, covenants and agrees that:
b) The Collateral covered by this Security Agreement is used or purchased
for use primarily for business purposes.
c) Although proceeds of Collateral are covered by this Security Agreement,
this shall not be construed to mean that Secured Party consents to any
sale of such property.
d) The Collateral will be located at the offices of Debtor listed on
Exhibit A attached hereto and made part hereof (collectively the
"Premises"). Except for purposes of replacement and repair of the
equipment and for sale of the inventory in the ordinary course of
business, the Debtor will not remove its Collateral from the Premises,
or allow it to be removed, from said Premises without the prior written
consent of the Secured Party. The Debtor will promptly give written
notice to the Secured Party of any cessation of its business conducted
at the location and of any loss or damage by fire or other casualty to
any substantial part of the Collateral.
e) The Debtor will, at all reasonable times, allow the Secured Party or its
representatives free and complete access to all of the Debtor's records,
for such inspection and examination as the Secured Party deems
necessary. The Debtor shall also upon request of the Secured Party from
time to time submit up-to-date schedules of the items comprising the
Collateral owned by it in such detail as the Secured Party shall
reasonably require.
f) The Debtor at its cost and expense will protect and defend this
Agreement, all of the rights of the Secured Party hereunder, and the
Collateral owned by it against the claims and demands of all other
parties.
g) The Debtor will at all times keep and maintain the Collateral owned by
it in good order, repair and condition, and will promptly replace any
part thereof that from time to time may become obsolete, badly worn, or
in a state of disrepair, or, if supplies, be consumed in the normal
course of the Debtor's business operations. All such replacements shall
be free of any other lien, security interest or encumbrance of any
nature. The Debtor may sell or dispose of only that part of the
Collateral that Debtor is obligated to replace, and, unless Secured
Party then agrees otherwise in writing, all proceeds from any such sale
or disposition in excess of the amount expended for such replacements
shall promptly be paid over by the Debtor to the Secured Party to be
applied against the sums secured hereby, whether or not such sums are
then due and payable.
h) The Secured Party or its representatives may at any and all reasonable
times inspect the Collateral and may enter upon any and all Premises
where the same is kept or might be located.
i) The Debtor will not, without obtaining the prior written consent of
Secured Party, transfer or permit any transfer of the Collateral owned
by it or any part thereof to be made, or any interest therein to be
created by way of a sale (except as permitted above), or by way of a
grant of a
security interest, or by way of a levy or other judicial process.
Notwithstanding anything contained herein to the contrary the Secured
Party agrees that it will subordinate any security interest herein
granted to any security interest required of Debtor by any financial
institution or any other major manufacturer, vendor or distributor with
a secured financing program in place.
j) The Debtor will promptly notify Secured Party of any levy, distraint or
other seizure by legal process or otherwise of any part of its
Collateral, and of any threatened or filed claims or proceedings that
might in any way affect or impair any of the terms of this Agreement.
k) 2.10 The Secured Party at all times shall have a perfected security
interest in the Collateral that shall be prior to any other interests
therein. Debtor will do all acts and things, and will execute, and file,
all instruments (including Security Agreements, Financing Statements,
Continuation Statements, etc.) requested by, the Secured Party to
establish, maintain and continue the perfected Security Interest of
Secured Party in the Collateral, and will promptly on demand, pay all
costs and expenses of filing and recording, including the costs of any
searches deemed necessary by Secured Party from time to time to
establish and determine the validity and the continuing priority of the
Security Interest of Secured Party, and also pay all other claims and
charges that in the opinion of Secured Party might prejudice, imperil or
otherwise affect the Collateral or its security interest therein.
l) The Debtor at its expense will obtain and maintain in force insurance
policies covering losses or damage to its Collateral. The insurance
policies to be obtained by the Debtor shall be in form and amounts
acceptable to Secured Party. The Secured Party is hereby irrevocably
appointed the Debtor's attorney in fact to endorse any check or draft
that may be payable to the Debtor, alone or jointly with other payees,
so that the Secured Party may collect the proceeds payable for any loss
under such insurance. The proceeds of such insurance, less any costs and
expenses incurred or paid by the Secured Party in the collection thereof
shall be applied in the sole discretion of the Secured Party, either
toward the cost of the repair or replacement of the items damaged or
destroyed, or on account of any sums secured hereby, whether or not then
due or payable.
m) The Secured Party may, at its option, and without any obligation to do
so, pay, perform and discharge any and all amounts, costs, expenses and
liabilities herein agreed to be paid or performed by Debtor, and all
amounts expended by the Secured Party, in so doing shall become part of
the Obligations secured hereby, and shall be immediately due and payable
by Debtor to the Secured Party upon demand therefore, and shall bear
interest at the interest rate, as defined in the Note, from the dates of
such expenditures until paid.
n) Debtor will give Secured Party immediate written notice of any change in
location of Debtor's chief executive office.
5) EVENTS OF DEFAULT:
6) The occurrence of any of the following events shall constitute and is hereby
defined to be, an "Event of Default":
a) Any failure or neglect to observe or perform any of the terms,
provisions, promises, agreements or covenants of this Security Agreement
and the continuance of such failure or neglect after notice thereof to
the Debtor; or
b) Any failure of the maker to pay any installment of principal and/or
interest, or any other sum due under the Note or of Debtor to pay any
other Obligations secured hereby, at the time such installment shall
become due and payable.
c) Any warranty, representation or statement contained in this Security
Agreement made or furnished to the Secured Party by or on behalf of the
Debtor, which shall be or shall prove to have been materially false when
made or furnished; or
7) SECURED PARTY'S REMEDIES:
8) Upon the occurrence of any Event of Default hereunder, Secured Party shall
have the following rights and remedies, at any time after giving notice and
after the expiration of the grace period provided herein:
a) The Secured Party may, at its option, declare all or any part of the
Obligations immediately due and payable and Debtor shall on demand by
Secured Party deliver the Collateral to the Secured Party. Secured Party
may, without further notice or demand and without legal process, take
possession of the Collateral wherever found and, for this purpose, may
enter upon said Real Property or upon any other property occupied by or
in the control of the Debtor. The Secured Party may require the Debtor
to assemble the Collateral and make it available to the Secured Party at
a place to be designated by the Secured Party that is reasonably
convenient to both parties.
b) The Secured Party may pursue any legal remedy available to collect all
sums secured hereby and to enforce its title in and right to possession
of the Collateral, and to enforce any and all other rights or remedies
available to it, and no such action shall operate as a waiver of any
other right or remedy of the Secured Party under the terms hereof, or
under the laws of the State of California.
c) Debtor waives any requirements of presentment, protest, notices of
protest, notices of dishonor, and all other formalities. Debtor waives
all rights and/or privilege it might otherwise have to require Secured
Party to proceed against or exhaust the Collateral encumbered hereby or
by any other security document or instrument securing said Note or to
proceed against any guarantor of such indebtedness, or to pursue any
other remedy available to Secured Party in any particular manner or
order under the legal or equitable doctrine or principle of marshalling
and/or suretyship and further agrees that Secured Party may proceed
against any or all of the Collateral encumbered hereby or by any other
security document or instrument securing said Note in the event of
default and after expiration of any applicable grace period following
notice in such order and manner as Secured Party in its sole discretion
may determine. Any Debtor that has signed this Security Agreement as a
surety or accommodation party, or that has subjected its property to
this Security Agreement to secure the indebtedness of another hereby
expressly waives any defense arising by reason of any disability or
other defense of the maker or by reason of the cessation from any cause
whatsoever of the liability of maker, and waives the benefit of any
statutes of limitation affecting the enforcement hereof.
d) The Secured Party, upon obtaining possession of the Collateral or any
part thereof, may sell the same at public or private sale either with or
without having such Collateral at the place of sale, and with notice to
Debtor as provided in paragraph 4.6 herein. The proceeds of such sale,
after
deducting therefrom all expenses of the Secured Party in taking,
storing, repairing and selling the Collateral (including reasonable
attorneys' fees) shall be applied to the payment of any part or all of
the obligations and any other indebtedness or liability of the Debtor to
the Secured Party, and any surplus thereafter remaining shall be paid to
the Debtor, or any other person that may be legally entitled thereto. In
the event of a deficiency, between such net proceeds from the sale of
Collateral and the total amount owing by the Debtor under the
Obligations, the Debtor (or if more than one, jointly and severally)
will promptly upon demand pay the amount of such deficiency to the
Secured Party.
e) At any sale, public or private, of the Collateral or any part thereof,
made in the enforcement of the rights and remedies hereunder of the
Secured Party; the Secured Party may, so far as may be lawful, purchase
any part or parts of the Collateral or all thereof offered at such sale.
f) Secured Party shall give Debtor reasonable notice of any sale or other
disposition of the Collateral or any part thereof. Debtor agrees that
notice and demand shall be conclusively deemed to be reasonable and
effective if such notice is mailed by registered or certified mail
postage prepaid, to the Debtor at the address above given, or at such
other address as the Debtor may designate hereafter by written notice to
the Secured Party, at least ten (10) days prior to such sale or other
disposition.
g) The Secured Party shall have all the rights and remedies afforded a
Secured Party under the California Uniform Commercial Code and all other
legal or equitable remedies provided by the laws of the United States
and the State of California.
9) MISCELLANEOUS PROVISIONS:
a) No Event of Default hereunder by Debtor shall be deemed to have been
waived by the Secured Party except by a writing to that effect signed on
behalf of the Secured Party by an officer thereof and no waiver of any
such Event of Default shall operate as a waiver of any such Event of
Default shall operate as a waiver of any other Event of Default on a
future occasion, or as a waiver of that Event of Default after written
notice thereof and demand by Secured Party for strict performance of
this Agreement. All rights, remedies and privileges of the Secured Party
hereunder shall be cumulative and not alternative, and shall, whether or
not specifically so expressed, inure to the benefit of the Secured
Party, its successors and assigns, and all obligations of the Debtor
shall bind its successors and legal representatives.
b) Until an Event of Default and expiration of any applicable grace period,
the Debtor may retain possession of the Collateral and may use it in any
lawful manner not inconsistent with this Security Agreement or with the
provisions of any policies of insurance thereon.
c) The terms herein shall have the meanings in and be construed under the
California Commercial Code and all issues arising hereunder shall be
governed by the laws of the State of California. Whenever possible each
provision of this Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such
provision shall be ineffective to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement.
d) No modification, rescission, waiver, release or amendment of any
provision of this Security Agreement shall be made except by a written
agreement subscribed by Debtor and a duly authorized officer of Secured
Party.
e) This Security Agreement shall remain in full force and effect until all
of the indebtedness of the Debtor to the Secured Party, and any
extensions or renewals thereof shall be paid in full.
f) Secured Party and Debtor as used herein shall include the heirs,
executors or administrator, or successors or assigns of those parties.
The provisions of this Agreement shall apply to the parties according to
the context hereof and without regard to the number or gender of words
and expressions used herein.
g) A carbon, photographic or other reproduced copy of this Security
Agreement and/or any financing statement relating hereto shall be
sufficient for filing and/or recording as a financing statement.
IN WITNESS WHEREOF, this Security Agreement has been executed and delivered
on behalf of and in the name of Debtor on the date indicated above.
SECURED PARTY: DEBTOR:
Wareforce Incorporated IMPRES Technology Solutions, Inc.
By: By:
----------------------- ------------------------------
Name: Xxx Xxxxxx Name: Xxxxxxx Xx
Its: President Its: President
SCHEDULE "A"
SCHEDULE 1.1
PURCHASED ASSET SCHEDULE
The Purchased Assets shall consist of, as the same may exist on the Closing
Date, all:
(i) office equipment of the Seller located at the Commerce location
including, without limitation, Seller's telephone system, computer
systems, tools and supplies of Seller's repair department, advertising
signs, catalogs and sales literature and including certain items from
Seller's Manhattan Beach facility such as a server that pertain to the
operation of the Cove system at the Commerce location;
(ii) leasehold improvements at the Commerce location not deemed to be the
property of Seller's landlord including, without limitations, trade
fixtures;
(iii) rights to use the trade names "IMPRES" and "IMPRES Technology" for such
period of time as Buyer deems necessary;
(iv) all goodwill associated with the Business and the Purchased Asset
together with the right to represent to third parties that Buyer is the
successor to the Business
(v) such items of Seller (such as a server) as Buyer and Seller may mutually
agree and that are necessary to run the Cove system at the Commerce
location;
(vi) contracts with Los Angeles County, Gwenett County, NACO;
(vii) convertible open purchase orders from customers as of the date of
Closing; and
(viii) customer lists of the Business.
(i)
XXXX OF SALE OF BUSINESS
This Xxxx of Sale of Business is delivered pursuant to that certain Asset
Purchase Agreement (the "Agreement"), dated June 188, 2001, between IMPRES
Technology Solutions, Inc. (the "Buyer") and Wareforce Incorporated (the
"Seller"), providing for the purchase by Buyer of substantially all of the
assets of Seller. All capitalized terms used herein shall have the meanings set
forth in the Agreement.
For value received, Seller hereby sells, assigns and transfers to Buyer the
following assets of Seller pertaining to or used in the Business, wherever
located, whether known or unknown, and whether or not on the books and records
of Seller:
(i) office equipment of the Seller located at the Commerce location including,
without limitation, Seller's telephone system, computer systems, tools and
supplies of Seller's repair department, advertising signs, catalogs and sales
literature and including certain items from Seller's Manhattan Beach facility
such as a server that pertain to the operation of the Cove system at the
Commerce location;
(ii) leasehold improvements at the Commerce location not deemed to be the
property of Seller's landlord including, without limitations, trade fixtures;
(iii) rights to use the trade names "IMPRES" and "IMPRES Technology" for such
period of time as Buyer deems necessary;
(iv) all goodwill associates with the Business and the Purchased Asset together
with the right to represent to third parties that Buyer is the successor to the
Business; and
(ix) all other assets on the attached Schedule 1.1 "Purchased Asset Schedule".
In witness whereof, the undersigned has executed this Xxxx of Sale of
Business in El Segundo, California, effective as of June 18, 2001.
WAREFORCE INCORPORATED
By: /s/ Xxx Xxxxxxxx
---------------------------
Name: Xxx Xxxxxxxx
Title: General Counsel
XXXXXXXXX.XXX, INC.
OFFICERS CERTIFICATE
I, Xxx X. Xxxxxxxx, hereby certify (i) that I am the Secretary of
Wareforce Incorporated (the "Seller"), (ii) that I am authorized to deliver this
Officer's Certificate, and (iii) that the Seller has authorized all corporate
action necessary on its part to authorized the transactions contemplated by the
Asset Purchase Agreement, dated June 18, 2001, between IMPRES Technology
Solutions, Inc. and Seller.
Dated: June 18, 2001 WAREFORCE INCORPORATED
By: /s/ Xxx Xxxxxxxx
---------------------------
Name: Xxx X. Xxxxxxxx
Title: Secretary
IMPRES TECHNOLOGY SOLUTIONS, INC.
OFFICERS CERTIFICATE
I, Xxxxxxx Xx, hereby certify (i) that I am the Secretary of IMPRES
Technology Solutions, Inc. (the "Buyer"), (ii) that I am authorized to deliver
this Officer's Certificate, and (iii) that the Buyer has authorized all
corporate action necessary on its part to authorized the transactions
contemplated by the Asset Purchase Agreement, dated June 18, 2001, between Buyer
and Wareforce Incorporated.
Dated: June 18, 2001 IMPRES TECHNOLOGY SOLUTIONS, INC.
By: /s/ Xxxxxxx Xx
-----------------------------
Name: Xxxxxxx Xx
Title: Secretary