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EXHIBIT 2.3
ASSET PURCHASE AGREEMENT
BY
AND
AMONG
EAEDP, INC.,
AND
WORLD WEB TECHNOLOGIES INC.,
AND
XXXXX XXXXXXXX, XXXXXXX XXXXX,
XXX XXXXXX AND XXXX XXXXXXXX
SEPTEMBER 20, 1999
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TABLE OF CONTENTS
Page #
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1. Definitions..............................................................................................1
2. Basic Transaction........................................................................................5
(a) Purchase and Sale of Assets.....................................................................5
(b) Assumption of Liabilities.......................................................................5
(c) Purchase Price..................................................................................6
(d) The Closing.....................................................................................6
(e) Deliveries at the Closing.......................................................................6
(f) Allocation......................................................................................6
3. Representations and Warranties of the Seller.............................................................6
(a) Organization and Corporate Power................................................................6
(b) Authorization of Transaction....................................................................6
(c) Noncontravention................................................................................7
(d) Title to Assets.................................................................................7
(e) Financial Statements. ..........................................................................8
(f) Events Subsequent to Most Recent Fiscal Year End................................................8
(g) Undisclosed Liabilities.........................................................................9
(h) Legal Compliance................................................................................9
(i) Tax Matters.....................................................................................9
(j) Intellectual Property..........................................................................10
(k) Tangible Assets................................................................................11
(l) Contracts......................................................................................11
(m) Notes and Accounts Receivable..................................................................12
(n) Powers of Attorney.............................................................................13
(o) Litigation.....................................................................................13
(p) Employee Benefits..............................................................................13
(q) Guaranties.....................................................................................13
(r) Certain Business Relationships with the Division...............................................13
(s) Year 2000......................................................................................13
(t) Customers......................................................................................14
(u) Software.......................................................................................14
(v) Disclosure.....................................................................................14
4. Representations and Warranties of the Buyer.............................................................14
(a) Organization of the Buyer......................................................................15
(b) Authorization of Transaction...................................................................15
(c) Noncontravention...............................................................................15
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5. Pre-Closing Covenants...................................................................................15
(a) General........................................................................................15
(b) Notices and Consents...........................................................................16
(c) Operation of Business..........................................................................16
(d) Preservation of Business.......................................................................16
(e) Full Access....................................................................................16
(f) Notice of Developments.........................................................................16
(g) Exclusivity....................................................................................16
(h) Server Test....................................................................................17
6. Post-Closing Covenants..................................................................................17
(a) General........................................................................................17
(b) Litigation Support.............................................................................17
(c) Transition.....................................................................................17
(d) Confidentiality................................................................................17
(e) Covenant Not to Compete........................................................................18
(f) Advisory Board.................................................................................18
(g) Proprietary Software...........................................................................19
7. Conditions to Obligation to Close.......................................................................19
(a) Conditions to Obligation of the Buyer..........................................................19
(b) Conditions to Obligation of the Seller and the Seller Stockholders.............................21
8. Remedies for Breaches of This Agreement.................................................................21
(a) Survival of Representations and Warranties.....................................................21
(b) Indemnification Provisions for Benefit of the Buyer............................................22
(c) Indemnification Provisions for Benefit of the Seller...........................................22
(d) Matters Involving Third Parties................................................................23
(e) Determination of Adverse Consequences..........................................................24
(f) Other Indemnification Provisions...............................................................24
9. Termination.............................................................................................24
(a) Termination of Agreement.......................................................................24
(b) Effect of Termination..........................................................................25
10. Miscellaneous...........................................................................................25
(a) Press Releases and Public Announcements........................................................25
(b) No Third-Party Beneficiaries...................................................................25
(c) Entire Agreement...............................................................................25
(d) Succession and Assignment......................................................................26
(e) Counterparts...................................................................................26
(f) Headings.......................................................................................26
(g) Notices........................................................................................26
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(h) Governing Law..................................................................................27
(i) Amendments and Waivers.........................................................................27
(j) Severability...................................................................................27
(k) Expenses.......................................................................................28
(l) Construction...................................................................................28
(m) Incorporation of Exhibits and Schedules........................................................28
(n) Tax Matters....................................................................................28
(o) Execution......................................................................................28
(p) Specific Performance...........................................................................29
(q) Dispute Notification and Resolution Procedure..................................................29
(r) Submission to Jurisdiction.....................................................................30
Exhibit A--Xxxx of Sale and Assignment
Exhibit B--Allocation Schedule
Exhibit C--Financial Statements and Projections
Exhibit D--Noncompete Geographic Area
Exhibit E--Form of Noncompete Agreement
Exhibit F--Form of Transitional Services Agreement
Disclosure Schedule--Exceptions to Representations and Warranties
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ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this "Agreement") is entered into as of
September 20, 1999, by and among EAEDP, Inc., a Colorado corporation (the
"Buyer"), World Web Technologies Inc., an Alberta corporation (the "Seller"),
and Xxxxx Xxxxxxxx, an individual, Xxxxxxx Xxxxx, an individual, Xxx Xxxxxx, an
individual, and Xxxx Xxxxxxxx, an individual (collectively, the "Seller
Stockholders"). The Buyer, the Seller and the Seller Stockholders are each
referred to individually herein as a "Party" and collectively as the "Parties."
This Agreement contemplates a transaction in which the Buyer will
purchase all of the assets related to the Seller's Discovery Place web site
(xxx.xxxxxxxxxxxxxx.xxx) and directly related business in return for cash.
Now, therefore, in consideration of the premises and the mutual
promises herein made, and in consideration of the representations, warranties,
and covenants herein contained, the Parties agree as follows.
1. Definitions.
"Acquired Assets" means all right, title, and interest in and to all of
the assets constituting the Business, including without limitation all (a)
Intellectual Property in connection with the Energy Industry and the Seller's
right, title, and interest in and to the name "Discovery Place," goodwill
associated therewith, licenses and sublicenses granted and obtained with respect
thereto, and rights thereunder, remedies against infringements thereof, and
rights to protection of interests therein under the laws of all jurisdictions,
(b) agreements, contracts, instruments, Security Interests, other similar
arrangements, and rights thereunder, (c) accounts, notes, and other receivables,
(d) claims, deposits, prepayments, refunds, causes of action, choses in action,
rights of recovery, rights of set off, and rights of recoupment (including any
such item relating to the payment of taxes), (e) approvals, permits, licenses,
orders, registrations, certificates, variances, and similar rights obtained from
governments and governmental agencies, (f) books, records, ledgers, account
histories, files, documents, correspondence, lists, customer lists, drawings,
specifications, creative materials, advertising and promotional materials,
studies, reports, and other printed or written materials, (g) software, source
codes, and all software development tools necessary to maintain and modify the
software, including without limitation Publishing Software MC20, Surplus
Equipment Software, Crude Oil Pricing Software, Prospects and Properties
Software, Closing Stock Quotes Software, Alberta Public Offerings Software
(including map search of current offerings and process data files), ?pageedit
PHP Software, Analyzer Software, C++ code, Perl code and script, database
administration and code, SQL code and applications, SQL statements within Perl
code, and any integration software relative thereto and any other applicable
proprietary software, software code, and tools and applications (collectively,
"Proprietary Software"), each in connection with the Energy Industry, (h) a hard
disk containing working copies of software, source codes, and software
development tools necessary to maintain and modify the software, including
without limitation Linux 2.0.36, RedHat 5.2, Apache 1.3.6, MySQL 3.22.21, Perl
5.005.02, PHP 3.07, and any other applicable open source software, software
code, and tools and applications (collectively, the "Open
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Source Software" and, with the Proprietary Software, the "Software"), (i) the
URL for the Discovery Place web site (xxx.xxxxxxxxxxxxxx.xxx), (j) databases,
(k) physical mediums required for the Seller to deliver the Software to the
Buyer, including without limitation hard drives, disks, tapes and other storage
mediums, and (l) all electronic data associated with customers of the Business
(i.e., graphics, graphic design logos, written content); provided, however, that
the Acquired Assets shall not include (A) the corporate charter, qualifications
to conduct business as a foreign corporation, arrangements with registered
agents relating to foreign qualifications, taxpayer and other identification
numbers, seals, minute books, stock transfer books, blank stock certificates,
and other documents relating to the organization, maintenance, and existence of
the Seller as a corporation, (B) any of the rights of the Seller under this
Agreement (or under any side agreement between the Seller on the one hand and
the Buyer on the other hand entered into on or after the date of this
Agreement), (C) the Proprietary Software or Intellectual Property in connection
with any industries other than the Energy Industry, or (D) any other real or
personal property of the Seller.
"Adverse Consequences" means all actions, suits, proceedings, hearings,
investigations, charges, complaints, claims, demands, injunctions, judgments,
orders, decrees, rulings, damages, dues, penalties, fines, costs, amounts paid
in settlement, liabilities, obligations, taxes, liens, losses, expenses, and
fees, including court costs and attorneys' fees and expenses.
"Advisory Board" has the meaning set forth in Section 6(f) below.
"Affiliate" has the meaning set forth in Rule 12b-2 of the regulations
promulgated under the Securities Exchange Act.
"Agreement" has the meaning set forth in the preface above.
"Applicable Rate" means the prime rate of interest as set forth from
time to time in the Denver, Colorado edition of the Wall Street Journal.
"Arbitrator" has the meaning set forth in Section 10(q)(iii)(C) below.
"Basket" has the meaning set forth in Section 8(b)(i) below.
"Xxxx of Sale" has the meaning set forth in Section 2(e)(iii)(A) below.
"Business" means the Seller's Discovery Place web site
(xxx.xxxxxxxxxxxxxx.xxx) and all directly related business including, without
limitation, the Acquired Assets, members, advertisers, subscribers, and
customers and accounts receivable related to the Energy Industry; provided,
however, that the Business shall not include the Seller's Internet access
dial-up customers.
"Buyer" has the meaning set forth in the preface above.
"Claim Notice" has the meaning set forth in Section 10(q)(i) below.
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"Claimant" has the meaning set forth in Section 10(q)(i) below.
"Claims" has the meaning set forth in Section 10(q) below.
"Closing" has the meaning set forth in Section 2(d) below.
"Closing Date" has the meaning set forth in Section 2(d) below.
"Confidential Information" means any information concerning the
businesses and affairs of the Division, the Buyer and the Buyer's Affiliates
that is not already generally available to the public.
"Customer Software" has the meaning set forth in Section 3(u) below.
"Database" has the meaning set forth in Section 3(u)(A) below.
"Disclosure Schedule" has the meaning set forth in Section 3 below.
"Division" means the Seller with respect to the Business.
"EAE" has the meaning set forth in Section 6(f) below.
"Employee Benefit Plans" has the meaning set forth in Section 3(p)
below.
"Energy Industry" means the energy and related services industries,
including, without limitation, the petroleum, natural gas, electricity, power,
wind or any alternative energy form industries.
"Excepted Intellectual Property" has the meaning set forth in Section
3(j)(i) below.
"Financial Statements" has the meaning set forth in Section 3(e) below.
"Income Tax" means any federal, state, provincial, municipal, local, or
foreign income tax, including any interest, penalty, or addition thereto,
whether disputed or not.
"Income Tax Return" means any return, declaration, report, claim for
refund, or information return or statement relating to Income Taxes, including
any schedule or attachment thereto, and including any amendment thereof.
"Indemnified Party" has the meaning set forth in Section 8(d) below.
"Indemnifying Party" has the meaning set forth in Section 8(d) below.
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"Intellectual Property" means, with respect to the Business, (a) all
inventions (whether patentable or unpatentable and whether or not reduced to
practice), all improvements thereto, and all patents, patent applications, and
patent disclosures, together with all reissuances, continuations,
continuations-in-part, revisions, extensions, and reexaminations thereof, (b)
all trademarks, service marks, trade dress, logos and trade names, together with
all translations, adaptations, derivations, and combinations thereof and
including all goodwill associated therewith, and all applications,
registrations, and renewals in connection therewith, (c) all copyrightable
works, all copyrights, and all applications, registrations, and renewals in
connection therewith, (d) all trade secrets and confidential business
information (including ideas, research and development, know-how, formulas,
compositions, technical data, designs, drawings, specifications, customer and
supplier lists, pricing and cost information, and business and marketing plans
and proposals), (e) all computer software (including data and related
documentation), source codes, tools, middleware, and graphic templates, (f) all
other proprietary rights, and (g) all copies and tangible embodiments thereof
(in whatever form or medium).
"Knowledge" means actual knowledge after reasonable investigation.
"Most Recent Financial Statements" has the meaning set forth in Section
3(e) below.
"Most Recent Fiscal Month End" has the meaning set forth in Section
3(e) below.
"Most Recent Fiscal Year End" has the meaning set forth in Section 3(e)
below.
"Noncompete Agreement" has the meaning set forth in Section 7(a)(vii)
below.
"Notified Party" has the meaning set forth in Section 10(q)(i) below.
"Open Source Software" has the meaning set forth in the definition of
"Acquired Assets" above.
"Ordinary Course of Business" means the ordinary course of business
consistent with past custom and practice (including with respect to quantity and
frequency) with respect to the Division.
"Other Acquisition Transaction" has the meaning set forth in Section
5(g) below.
"Party(ies)" has the meaning set forth in the preface above.
"Person" means an individual, a partnership, a corporation, a limited
liability company, an association, a joint stock company, a trust, a joint
venture, an unincorporated organization, or a governmental entity (or any
department, agency, or political subdivision thereof).
"Proprietary Software" has the meaning set forth in the definition of
"Acquired Assets" above.
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"Purchase Price" has the meaning set forth in Section 2(c) below.
"Securities Exchange Act" means the U.S. Securities Exchange Act of
1934, as amended.
"Security Interest" means any mortgage, pledge, lien, encumbrance,
charge, or other security interest, other than (a) mechanic's, materialmen's,
and similar liens, (b) liens for taxes not yet due and payable or for taxes that
the taxpayer is contesting in good faith through appropriate proceedings, (c)
purchase money liens and liens securing rental payments under capital lease
arrangements, and (d) other liens arising in the Ordinary Course of Business and
not incurred in connection with the borrowing of money.
"Seller" has the meaning set forth in the preface above.
"Seller Most Recent Financial Statements" has the meaning set forth in
Section 3(e) below.
"Seller Stockholder" has the meaning set forth in the preface above.
"Software" has the meaning set forth in the definition of "Acquired
Assets" above.
"Subsidiary" means any entity with respect to which a specified Person
(or a Subsidiary thereof) owns a majority of the common stock or has the power
to vote or direct the voting of sufficient equity securities to control such
entity.
"System" has the meaning set forth in Section 3(s) below.
"Third Party Claim" has the meaning set forth in Section 8(d) below.
"Transaction Documents" has the meaning set forth in Section 3(b)
below.
"Transitional Services Agreement" has the meaning set forth in Section
7(a)(viii) below.
"Year 2000 Compliant" has the meaning set forth in Section 3(s) below.
2. Basic Transaction.
(a) Purchase and Sale of Assets. On and subject to the terms
and conditions of this Agreement, the Buyer agrees to purchase from the Seller,
and the Seller agrees to sell, transfer, convey, and deliver to the Buyer, all
of the Acquired Assets at the Closing for the consideration specified below in
this Section 2. The Parties agree that the transfer of copyrights included in
the Acquired Assets shall be irrevocable.
(b) Assumption of Liabilities. The Buyer will not assume or
have any responsibility with respect to any obligation or liability of the
Seller other than obligations of the
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Division under contracts and agreements set forth on Section 3(l) of the
Disclosure Schedule arising, incurred, for or in connection with any period
subsequent to the Closing Date.
(c) Purchase Price. The Buyer agrees to pay to the Seller at
the Closing US$500,000 (the "Purchase Price") by delivery of cash payable by
certified check.
(d) The Closing. The closing of the transactions contemplated
by this Agreement (the "Closing") shall take place at the offices of Xxxxxx
Xxxxx Xxxxx Xxxxxxxxx & Xxxxxx, LLC, 0000 00xx Xxxxxx, Xxxxx 0000, Xxxxxx,
Xxxxxxxx 00000, commencing at 9:00 a.m. local time on September 28, 1999 or such
other date as the Parties may mutually determine (the "Closing Date").
(e) Deliveries at the Closing. At the Closing, (i) the Seller
and the Seller Stockholders will deliver to the Buyer the various certificates,
instruments, and documents referred to in Section 7(a) below; (ii) the Buyer
will deliver to the Seller the various certificates, instruments, and documents
referred to in Section 7(b) below; (iii) the Seller will execute, acknowledge
(if appropriate), and deliver to the Buyer (A) the Xxxx of Sale and Assignment
substantially in the form attached hereto as Exhibit A (the "Xxxx of Sale") and
(B) such other instruments of sale, transfer, conveyance, and assignment as the
Buyer and its counsel reasonably may request; and (iv) the Buyer will deliver to
the Seller the consideration specified in Section 2(c) above.
(f) Allocation. The Parties agree to allocate the Purchase
Price (and all other capitalizable costs) among the Acquired Assets for all
purposes (including financial accounting and tax purposes) in accordance with
the allocation schedule attached hereto as Exhibit B; provided, however, that
the Buyer may amend such allocation schedule prior to the Closing with the
consent of the Seller, such consent not to be unreasonably withheld.
3. Representations and Warranties of the Seller. The Seller represents
and warrants to the Buyer that the statements contained in this Section 3 are
correct and complete as of the date of this Agreement and will be correct and
complete as of the Closing Date (as though made then and as though the Closing
Date were substituted for the date of this Agreement throughout this Section 3),
except as set forth in the disclosure schedule accompanying this Agreement (the
"Disclosure Schedule"). The Disclosure Schedule will be arranged in paragraphs
corresponding to the lettered and numbered paragraphs and subparagraphs
contained in this Section 3 and the paragraphs and subparagraphs corresponding
thereto in this Section 3 shall reference the Disclosure Schedule.
(a) Organization and Corporate Power. The Seller is a
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. The Seller has full corporate
power and authority and all licenses, permits and authorizations necessary to
carry on the Business and to own and use the properties owned and used by it.
Section 3(a) of the Disclosure Schedule lists all such licenses, permits and
authorizations.
(b) Authorization of Transaction. The Seller and the Seller
Stockholders have full power and authority (including, with respect to the
Seller, full corporate power and authority) to
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execute and deliver this Agreement, the Xxxx of Sale, the Noncompete Agreement
and the Transitional Services Agreement (collectively, the "Transaction
Documents") and to perform their obligations under the Transaction Documents.
Without limiting the generality of the foregoing, the board of directors of the
Seller and the Seller Stockholders have duly authorized the execution, delivery,
and performance of the Transaction Documents by the Seller. This Agreement and,
when executed and delivered, the other Transaction Documents constitute the
valid and legally binding obligations of the Seller and the Seller Stockholders,
as the case may be, enforceable in accordance with their terms and conditions,
except as the enforceability thereof may be limited by bankruptcy, insolvency or
similar laws affecting enforcement of creditors' rights generally and the
application of general principles of equity.
(c) Noncontravention. Neither the execution and the delivery
of the Transaction Documents, nor the consummation of the transactions
contemplated thereby (including the assignments referred to in Section 2 above),
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Seller or the Seller Stockholders are
subject or any provision of the charter or bylaws of the Seller, or (ii)
conflict with, result in a breach of, constitute a default under, result in the
acceleration of, create in any party the right to accelerate, terminate, modify,
or cancel, or require any notice under any agreement, contract, lease, license,
instrument, or other arrangement to which the Seller or the Seller Stockholders
are a party or by which they are bound or to which any of their assets are
subject (or result in the imposition of any Security Interest upon any of their
assets), except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Security
Interest would not have a material adverse effect on the business, financial
condition, operations, results of operations, or future prospects of the
Division or on the ability of the Parties to consummate the transactions
contemplated by the Transaction Documents. Except as set forth on Section 3(c)
of the Disclosure Schedule, the Seller and the Seller Stockholders do not need
to give any notice to, make any filing with, or obtain any authorization,
consent, or approval of any government, governmental agency or third party in
order for the Parties to consummate the transactions contemplated by the
Transaction Documents (including the assignments referred to in Section 2
above), except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse effect on
the business, financial condition, operations, results of operations, or future
prospects of the Division or on the ability of the Parties to consummate the
transactions contemplated by the Transaction Documents.
(d) Title to Assets. The Seller has good and marketable title
to all of the Acquired Assets, free and clear of any Security Interest or
restriction on transfer. No person has any agreement, option, understanding or
commitment or any right or privilege (whether by law, preemptive or contractual)
which is capable of becoming an agreement, option, or commitment for the
purchase or other acquisition from the Seller of any of the Acquired Assets, or
any right or interest therein. The Acquired Assets and the assets and services
to be provided to the Buyer by the Seller pursuant to the Transitional Services
Agreement will allow the Buyer to carry on the Business
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in the same manner and to the same extent as it has been carried on by the
Seller prior to the date of this Agreement.
(e) Financial Statements. Attached hereto as Exhibit C are the
following financial statements (collectively, the "Financial Statements"): (i)
unaudited consolidated statement of income as of and for the twelve (12) months
ended December 31, 1998 (the "Most Recent Fiscal Year End") for the Division;
(ii) unaudited consolidated statement of income (the "Most Recent Financial
Statements") as of and for the eight (8) months ended August 31, 1999 (the "Most
Recent Fiscal Month End") for the Division; (iii) unaudited consolidated balance
sheets and statements of income as of and for the fiscal years ended October 31,
1996, October 31, 1997 and October 31, 1998 for the Seller; and (iv) unaudited
consolidated balance sheet and statement of income (the "Seller Most Recent
Financial Statements") as of and for the ten (10) months ended August 31, 1999.
The Financial Statements (including the notes thereto) have been prepared on a
consistent basis throughout the periods covered thereby and present fairly the
financial condition of the Division and the Seller, as the case may be, as of
such dates and the results of operations of the Division and the Seller, as the
case may be, for such periods; provided, however, that the Most Recent Financial
Statements and Seller Most Recent Financial Statements are subject to normal
year-end adjustments (which will not be material individually or in the
aggregate) and lack footnotes and other presentation items. Exhibit C also
includes the Seller's most recent financial projections for the Division.
(f) Events Subsequent to Most Recent Fiscal Year End. Since
the Most Recent Fiscal Year End, there has not been any material adverse change
in the business, financial condition, operations or results of operations of the
Division taken as a whole. Without limiting the generality of the foregoing,
since that date:
(i) the Division has not sold, leased, transferred,
or assigned any assets, tangible or intangible, outside the Ordinary
Course of Business;
(ii) the Division has not entered into any agreement,
contract, lease, or license outside the Ordinary Course of Business;
(iii) no party (including the Division) has
accelerated, terminated, made material modifications to, or canceled
any agreement, contract, lease, or license to which the Division is a
party or by which it is bound;
(iv) the Division has not imposed any Security
Interest upon any of the Acquired Assets;
(v) the Division has not made any capital
expenditures outside the Ordinary Course of Business;
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(vi) the Division has not made any material capital
investment in, or any material loan to, any other Person outside the
Ordinary Course of Business;
(vii) the Division has not created, incurred,
assumed, or guaranteed any indebtedness for borrowed money and
capitalized lease obligations;
(viii) the Division has not granted any license or
sublicense of any rights under or with respect to any Intellectual
Property;
(ix) the Division has not experienced any material
damage, destruction, or loss (whether or not covered by insurance) to
its property;
(x) the Division has not made any loan to, or entered
into any other transaction with, any of the directors, officers, and
employees of the Seller and its Subsidiaries;
(xi) the Division has not adopted, amended, modified,
or terminated any bonus, profit-sharing, incentive, severance, or other
plan, contract, or commitment for the benefit of any of the directors,
officers, and employees of the Seller, or taken any such action with
respect to any other Employee Benefit Plan; and
(xii) the Division has not committed to any of the
foregoing.
(g) Undisclosed Liabilities. The Division has no liability
(whether known or unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or unliquidated,
and whether due or to become due, including any liability for taxes), except for
(i) liabilities set forth on the face of the Most Recent Financial Statements
(rather than in any notes thereto) and (ii) liabilities which have arisen after
the Most Recent Fiscal Month End in the Ordinary Course of Business and which
are set forth on Section 3(g) of the Disclosure Schedule.
(h) Legal Compliance. The Division has complied with all
applicable laws (including rules, regulations, codes, plans, injunctions,
judgments, orders, decrees, rulings, and charges thereunder) of federal, state,
local, and foreign governments (and all agencies thereof), and no action, suit,
proceeding, hearing, investigation, charge, complaint, claim, demand, or notice
has been filed or commenced against it alleging any failure so to comply, except
where the failure to comply would not have a material adverse effect on the
business, financial condition, operations, results of operations, or future
prospects of the Division.
(i) Tax Matters.
(i) The Seller has filed all Income Tax Returns that
it was required to file. All such Income Tax Returns were correct and
complete in all material respects. All Income
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Taxes owed by the Seller and due (whether or not shown on any Income
Tax Return) have been paid. The Seller currently is not the beneficiary
of any extension of time within which to file any Income Tax Return.
(ii) There is no material dispute or claim concerning
any Income Tax liability of the Seller (A) claimed or raised by any
authority in writing or (B) as to which any of the Seller Stockholders
and the directors and officers of the Seller has Knowledge based upon
personal contact with any agent of such authority.
(iii) Section 3(i)(iii) of the Disclosure Schedule
lists all federal, state, provincial, municipal, local, and foreign
Income Tax Returns filed by the Seller for taxable periods ended on or
after October 31, 1992, indicates those Income Tax Returns that have
been audited, and indicates those Income Tax Returns that currently are
the subject of audit. The Seller has delivered to the Buyer correct and
complete copies of all federal Income Tax Returns, examination reports,
and statements of deficiencies assessed against or agreed to by the
Seller since October 31, 1992. The Seller has not waived any statute of
limitations in respect of Income Taxes or agreed to any extension of
time with respect to an Income Tax assessment or deficiency.
(j) Intellectual Property.
(i) Except with respect to the name "Discovery Place"
and the URL for the Discovery Place web site (xxx.xxxxxxxxxxxxxx.xxx)
(collectively, the "Excepted Intellectual Property"), the Division has
not interfered with, infringed upon, misappropriated, or violated any
intellectual property rights of third parties, and none of the Seller
Stockholders and the directors and officers of the Seller and its
Subsidiaries has ever received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation,
or violation (including any claim that the Division must license or
refrain from using any intellectual property rights of any third
party). To the Knowledge of any of the Seller Stockholders and the
directors and officers of the Seller and its Subsidiaries, (A) with
respect to the Excepted Intellectual Property, the Division has not
interfered with, infringed upon, misappropriated, or violated any
intellectual property rights of third parties, and (B) except as set
forth on Section 3(j)(i)(B) of the Disclosure Schedule, no third party
has interfered with, infringed upon, misappropriated, or violated any
intellectual property rights of the Division.
(ii) Section 3(j)(ii) of the Disclosure Schedule
identifies each patent, trademark, copyright or other Intellectual
Property registration which has been issued to the Division with
respect to any of its Intellectual Property, identifies each pending
application or application for registration which the Division has made
with respect to any of its Intellectual Property, and identifies each
license, agreement, or other permission which the Division has granted
to any third party with respect to any of its Intellectual Property
(together with any exceptions). The Seller has delivered to the Buyer
correct and complete
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copies of all such patents, registrations, applications, licenses,
agreements, and permissions (as amended to date). Section 3(j)(ii) of
the Disclosure Schedule also identifies each trade name or unregistered
trademark used by the Division in connection with the Business. With
respect to each item of Intellectual Property required to be identified
in Section 3(j)(ii) of the Disclosure Schedule:
(A) the Division possesses all right, title,
and interest in and to the item, free and clear of any
Security Interest, license, or other restriction;
(B) the item is not subject to any
outstanding injunction, judgment, order, decree, ruling, or
charge;
(C) no royalty or other fee is required to
be paid by the Division with respect to such item;
(D) there are no restrictions on the ability
of the Division or any successor or assignee thereof to use
and exploit all rights associated with such item;
(E) no action, suit, proceeding, hearing,
investigation, charge, complaint, claim, or demand is pending
or, to the Knowledge of any of the Seller Stockholders and the
directors and officers of the Seller and its Subsidiaries, is
threatened which challenges the legality, validity,
enforceability, use, or ownership of the item; and
(F) the Division has never agreed to
indemnify any Person for or against any interference,
infringement, misappropriation, or other conflict with respect
to the item.
(iii) Except for the Open Source Software, the
Division does not use any item of intellectual property owned by a
third party pursuant to license, sublicense, agreement, or permission.
(k) Tangible Assets. The tangible assets included in the
Acquired Assets are free from material defects (patent and latent), have been
maintained in accordance with normal industry practice, and are in good
operating condition and repair (subject to normal wear and tear).
(l) Contracts. Section 3(l) of the Disclosure Schedule lists
the following contracts and other agreements to which the Division is a party
and the respective expiration dates thereof:
(i) any agreement (or group of related agreements)
for the lease of personal property to or from any Person;
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(ii) any agreement (or group of related agreements)
for the purchase or sale of supplies, products, or other personal
property, or for the furnishing or receipt of services, including any
subscription, advertising or other form of customer agreements;
(iii) any agreement concerning a partnership, joint
venture or other business venture or combination;
(iv) any agreement (or group of related agreements)
under which it has created, incurred, assumed, or guaranteed any
indebtedness for borrowed money, or any capitalized lease obligation or
under which it has imposed a Security Interest on any of its assets,
tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any agreement involving any of the Seller
Stockholders or their Affiliates (other than the Seller);
(vii) any agreement under which the consequences of a
default or termination could have a material adverse effect on the
business, financial condition, operations, results of operations, or
future prospects of the Division; or
(viii) any other material agreement (or group of
related agreements which together are material).
The Seller has delivered to the Buyer a correct and complete copy of
each written agreement listed in Section 3(l) of the Disclosure Schedule (as
amended to date) and a written summary setting forth the material terms and
conditions of each oral agreement referred to in Section 3(l) of the Disclosure
Schedule. With respect to each such agreement: (A) the agreement is legal,
valid, binding, enforceable, and in full force and effect; (B) no party is in
breach or default, and no event has occurred which with notice or lapse of time
would constitute a breach or default, or permit termination, modification, or
acceleration, under the agreement; and (C) no party has repudiated any provision
of the agreement.
(m) Notes and Accounts Receivable. All notes and accounts
receivable of the Division are reflected properly on its books and records, are
valid receivables subject to no setoffs or counterclaims, are current and
collectible, and will be collected in accordance with their terms at their
recorded amounts, subject only to the reserve for bad debts with respect to the
Division set forth on the face of the Most Recent Financial Statements (rather
than in any notes thereto) as adjusted for operations and transactions through
the Closing Date in accordance with the past custom and practice of the
Division.
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(n) Powers of Attorney. To the Knowledge of any of the Seller
Stockholders and the directors and officers of the Seller and its Subsidiaries,
there are no outstanding powers of attorney executed on behalf of the Division.
(o) Litigation. Section 3(o) of the Disclosure Schedule sets
forth all instances in which the Division (i) is subject to any outstanding
injunction, judgment, order, decree, ruling, or charge or (ii) is a party or, to
the Knowledge of any of the Seller Stockholders and the directors and officers
of the Seller and its Subsidiaries, is threatened to be made a party to any
action, suit, proceeding, hearing, or investigation of, in, or before any court
or quasi-judicial or administrative agency of any federal, state, provincial,
municipal, local, or foreign jurisdiction or before any arbitrator or mediator.
(p) Employee Benefits. The consummation of the transactions
contemplated by this Agreement will not in any way result in the Buyer or its
Affiliates incurring any liability whatsoever in connection with retirement,
pension, bonus, stock purchase, profit sharing, stock option, deferred
compensation, severance or termination pay, insurance, medical, hospital,
dental, vision care, drug, sick leave, disability, salary contributions, legal
benefits, unemployment benefits, vacation, incentive or other compensation plan
or arrangement or other employee benefit which the Seller or any of its
Affiliates maintains or ever has maintained or contributes, ever has
contributed, or ever has been required to contribute to for the benefit of their
respective employees or former employees (collectively, "Employee Benefit
Plans").
(q) Guaranties. The Division is not a guarantor or otherwise
responsible for any liability or obligation (including indebtedness) of any
other Person.
(r) Certain Business Relationships with the Division. None of
the Seller Stockholders and their Affiliates has been involved in any material
business arrangement or relationship with the Division within the past 12
months, and none of the Seller Stockholders and their Affiliates owns any asset,
tangible or intangible, which is used in the business of the Division.
(s) Year 2000. To the Knowledge of any of the Seller
Stockholders and the directors and officers of the Seller and its Subsidiaries,
there is no matter which will prevent each system, comprising of software,
hardware, databases or embedded control systems (microprocessor controlled,
robotic or other device) owned, leased or within the control of the Division
(collectively, a "System"), that constitutes any part of, or is used in
connection with the use, operation or enjoyment of any material tangible or
intangible asset or real property of the Division to (i) be designed to be used
prior to and after January 1, 2000, (ii) operate without error arising from the
creation, recognition, acceptance, calculation, display, reporting, storage,
retrieval, accessing, comparison, sorting, manipulation, processing or other use
of dates, or date-based, date-dependent or date-related data, including, but not
limited to, century recognition, day-of-the-week recognition, leap years, date
values and interfaces of date functionalities, provided that external date data
is received in the proper format, and (iii) not be adversely affected by the
advent of the year 2000 or subsequent years, the advent of the twenty-first
century or the transition from the twentieth century
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through the year 2000 and into the twenty-first century (collectively, items (i)
through (iii) are referred to herein as "Year 2000 Compliant"). All licenses for
the use of any System are certified by the manufacturer to be Year 2000
Compliant and to contain the capabilities required to be Year 2000 Compliant
within the Division computer systems (hardware and software), or the licenses
permit the Division or a third party to make all modifications, bypasses,
de-bugging, work-arounds, repairs, replacements, conversions or corrections
necessary to permit the System to operate compatibly, in conformance with their
respective specifications, and to be Year 2000 Compliant. The Seller
Stockholders and the directors and officers of the Seller and its Subsidiaries
have no reason to believe that the Division may incur material expenses arising
from or relating to the failure of any of its Systems as a result of not being
Year 2000 Compliant.
(t) Customers. Section 3(t) of the Disclosure Schedule sets
forth a true and complete list of all customers of the Division as of the date
of this Agreement and, except as set forth on Section 3(t) of the Disclosure
Schedule, the Seller is not aware of any customer that may cease doing business
with the Division subsequent to the Closing. The Seller Stockholders and the
directors and officers of the Seller and its Subsidiaries have no Knowledge of
any facts which could reasonably be expected to result in the loss of any
customers or sources of revenue of the Division.
(u) Software. The Software is functional, able and adequate to
carry on the Business as it is currently being conducted without material bugs
or impediments, including without limitation (A) interfacing to the Discovery
Place MySQL database (the "Database") containing the listing information for the
Discovery Place web site, (B) allowing access to the Database through
browser-based forms and allowing Database listings to be created, edited and
deleted with such forms, (C) converting the information within the Database into
an interlinked set of HTML pages that comprise the Discovery Place web site, (D)
using the member listings contained within the Database to generate advertising
banners shown randomly throughout the Discovery Place web site, (E) allowing a
browser-based user to search for information within the Database based upon
information in the title of the listing and the categories in which the listing
is contained, and (F) generating readership statistics for the Discovery Place
web site and collating such statistics into a set of HTML documents. The Seller
has good and marketable title to, and is the original developer, and sole owner
of, the Proprietary Software and source codes associated therewith, free and
clear of any Security Interest or restrictions on transfer, and no other Person
has any right, title or interest whatsoever in the Proprietary Software and
source codes associated therewith. Section 3(u) of the Disclosure Schedule sets
forth (i) any off the shelf software used in connection with the Business, and
(ii) all customer-owned software developed by the Seller and used in connection
with the Business ("Customer Software").
(v) Disclosure. The representations and warranties contained
in this Section 3 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. Representations and Warranties of the Buyer. The Buyer represents
and warrants to the Seller that the statements contained in this Section 4 are
correct and complete as of the date of
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this Agreement and will be correct and complete as of the Closing Date (as
though made then and as though the Closing Date were substituted for the date of
this Agreement throughout this Section 4).
(a) Organization of the Buyer. The Buyer is a corporation duly
organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation.
(b) Authorization of Transaction. The Buyer has full power and
authority (including full corporate power and authority) to execute and deliver
the Transaction Documents and to perform its obligations under the Transaction
Documents. This Agreement and, when executed and delivered, the other
Transaction Documents constitute the valid and legally binding obligations of
the Buyer, enforceable in accordance with their terms and conditions, except as
the enforceability thereof may be limited by bankruptcy, insolvency or similar
laws affecting enforcement of creditors' rights generally and the application of
general principles of equity.
(c) Noncontravention. Neither the execution and the delivery
of the Transaction Documents, nor the consummation of the transactions
contemplated thereby (including the assignments referred to in Section 2 above),
will (i) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which the Buyer is subject or any provision of
its charter or bylaws or (ii) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
the Buyer is a party or by which it is bound or to which any of its assets are
subject, except where the violation, conflict, breach, default, acceleration,
termination, modification, cancellation, failure to give notice, or Security
Interest would not have a material adverse effect on the ability of the Parties
to consummate the transactions contemplated by the Transaction Documents. The
Buyer does not need to give any notice to, make any filing with, or obtain any
authorization, consent, or approval of any government, governmental agency or
third party in order for the Parties to consummate the transactions contemplated
by the Transaction Documents (including the assignments referred to in Section 2
above), except where the failure to give notice, to file, or to obtain any
authorization, consent, or approval would not have a material adverse effect on
the ability of the Parties to consummate the transactions contemplated by the
Transaction Documents.
5. Pre-Closing Covenants. The Parties agree as follows with respect to
the period between the execution of this Agreement and the Closing.
(a) General. Each of the Parties will use its reasonable best
efforts to take all action and to do all things necessary, proper, or advisable
in order to consummate and make effective the transactions contemplated by this
Agreement (including satisfaction, but not waiver, of the closing conditions set
forth in Section 7 below).
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(b) Notices and Consents. The Seller and the Seller
Stockholders will give any notices to third parties, and the Seller and the
Seller Stockholders will use their reasonable best efforts to obtain any third
party consents in connection with the matters referred to in Section 3(c) above.
Each of the Parties will give any notices to, make any filings with, and use its
reasonable best efforts to obtain any authorizations, consents, and approvals of
governments and governmental agencies in connection with the matters referred to
in Section 3(c) and Section 4(c) above.
(c) Operation of Business. The Seller will not cause or permit
the Division to engage in any practice, take any action, or enter into any
transaction outside the Ordinary Course of Business. Without limiting the
generality of the foregoing, the Seller will not cause or permit the Division to
engage in any practice, take any action, or enter into any transaction of the
sort described in Section 3(f) above.
(d) Preservation of Business. The Seller will cause the
Division to keep its business and properties substantially intact, including its
present operations, physical facilities, working conditions, and relationships
with lessors, licensors, suppliers, customers, and employees and shall operate
the Division in the Ordinary Course of Business.
(e) Full Access. The Seller will permit (and will cause the
Division to permit) representatives of the Buyer to have full access at all
reasonable times, and in a manner so as not to interfere with the normal
business operations of the Division, to all premises, properties, personnel,
books, records (including tax records), contracts, and documents of or
pertaining to the Division. The Buyer will treat and hold as such any
Confidential Information it receives from any of the Seller Stockholders, the
Seller, and its Subsidiaries in the course of the reviews contemplated by this
Section 5(e), will not use any of the Confidential Information except in
connection with this Agreement, and, if this Agreement is terminated for any
reason whatsoever, will return to the Seller all tangible embodiments (and all
copies) of the Confidential Information which are in its possession.
(f) Notice of Developments. Each of the Parties will give
prompt written notice to the other Parties of any material adverse development
causing a breach of any of its own representations and warranties in Section 3
and Section 4 above. No disclosure by any Party pursuant to this Section 5(f),
however, shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(g) Exclusivity. Neither the Seller nor the Seller
Stockholders shall, nor shall they authorize or permit any of the officers,
directors or employees of the Seller or any investment banker, financial
advisor, attorney, accountant or other representative retained by the Seller or
the Seller Stockholders to, initiate, solicit, negotiate or encourage (including
by way of furnishing information), or take any other action to facilitate or
entertain, any inquiries or the making of any proposal that constitutes, or may
reasonably be expected to lead to, any proposal or offer to acquire all or any
substantial part of the Business, or all or substantially all of the capital
stock of the Seller, whether by merger, purchase of assets, exchange offer or
otherwise, whether for cash, securities or any other consideration or
combination thereof (any such transaction being referred to herein as an "Other
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Acquisition Transaction") or agree to endorse or recommend any such Other
Acquisition Transaction. In the event that a Person makes an unsolicited offer
to enter into an Other Acquisition Transaction, the Seller or the Seller
Stockholders, as the case may be, shall promptly inform the Buyer as to that
fact and shall furnish to the Buyer the specifics thereof in writing.
(h) Server Test. The Seller shall cause Xxxxx Xxxxxxxx, at the
Seller's cost and expense, to be at the offices of the Buyer in Denver,
Colorado, on September 27-28, 1999, to deliver to the Buyer a server containing
copies of all Software and Customer Software and to assist and consult with the
Buyer regarding such server and software and the testing thereof. During such
testing, the Seller and Xxxxx Xxxxxxxx shall cause such server and software to
operate to the satisfaction of the Buyer in its sole discretion.
6. Post-Closing Covenants. The Parties agree as follows with respect to
the period following the Closing.
(a) General. In case at any time after the Closing any further
action is necessary to carry out the purposes of this Agreement, each of the
Parties will take such further action (including the execution and delivery of
such further instruments and documents) as any other Party reasonably may
request, all at the sole cost and expense of the requesting Party (unless the
requesting Party is entitled to indemnification therefor under Section 8 below).
The Seller acknowledges and agrees that from and after the Closing the Buyer
will be entitled to possession of all documents, books, records (including tax
records), agreements, and financial data of any sort relating to the Division.
(b) Litigation Support. In the event and for so long as any
Party actively is contesting or defending against any action, suit, proceeding,
hearing, investigation, charge, complaint, claim, or demand in connection with
(i) any transaction contemplated under this Agreement or (ii) any fact,
situation, circumstance, status, condition, activity, practice, plan,
occurrence, event, incident, action, failure to act, or transaction on or prior
to the Closing Date involving the Division, the other Parties will cooperate
with the contesting or defending Party and its counsel in the contest or
defense, make available its personnel, and provide such testimony and access to
its books and records as shall be necessary in connection with the contest or
defense, all at the sole cost and expense of the contesting or defending Party
(unless the contesting or defending Party is entitled to indemnification
therefor under Section 8 below).
(c) Transition. Neither the Seller nor the Seller Stockholders
will take any action that is designed or intended to have the effect of
discouraging any lessor, licensor, customer, supplier, or other business
associate of the Division from maintaining the same business relationships with
the Buyer after the Closing as it maintained with the Division prior to the
Closing.
(d) Confidentiality. The Seller and the Seller Stockholders
shall treat and hold as such all of the Confidential Information, refrain from
using any of the Confidential Information except in connection with this
Agreement and the Transitional Services Agreement, and deliver
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promptly to the Buyer or destroy, at the request and option of the Buyer, all
tangible embodiments (and all copies) of the Confidential Information which are
in their possession, other than Seller's copies of (i) financial records of the
Division which the Seller is required by applicable law to maintain, and (ii)
the Proprietary Software and Intellectual Property for which the Seller retains
ownership pursuant to the definition of "Acquired Assets" in Section 1 above. In
the event that the Seller or the Seller Stockholders are requested or required
(by oral question or request for information or documents in any legal
proceeding, interrogatory, subpoena, civil investigative demand, or similar
process) to disclose any Confidential Information, such Person will notify the
Buyer promptly of the request or requirement so that the Buyer may seek an
appropriate protective order or waive compliance with the provisions of this
Section 6(d). If, in the absence of a protective order or the receipt of a
waiver hereunder, the Seller or the Seller Stockholders are, on the advice of
counsel, compelled to disclose any Confidential Information to any tribunal or
else stand liable for contempt, such Person may disclose the Confidential
Information to the tribunal; provided, however, that such Person shall use
reasonable best efforts to obtain, at the reasonable request of the Buyer, an
order or other assurance that confidential treatment will be accorded to such
portion of the Confidential Information required to be disclosed as the Buyer
shall designate.
(e) Covenant Not to Compete. For a period of five (5) years
from and after the Closing Date, the Seller and the Seller Stockholders shall
not directly or indirectly own any interest in, operate, provide services
similar to, manage, control, participate in, consult with, render services for,
be employed by, serve as an officer or director of an entity engaged in, advise
any Person engaged in, or in any manner engage in web-based information and
transaction services for the Energy Industry in the geographic areas set forth
on Exhibit D attached hereto; provided, however, that (i) no owner of less than
1% of the outstanding stock of any publicly traded corporation shall be deemed
to engage solely by reason thereof in any of its businesses, and (ii) the period
of Xxx Xxxxxx'x covenant not to compete shall be for a period of two (2) years
from and after the Closing Date. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section 6(e) is invalid
or unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope,
duration, or area of the term or provision, to delete specific words or phrases,
or to replace any invalid or unenforceable term or provision with a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision, and this Agreement
shall be enforceable as so modified after the expiration of the time within
which the judgment may be appealed.
(f) Advisory Board. For a period of two (2) years from the
Closing Date, each of Xxxxx Xxxxxxxx and Xxxxxxx Xxxxx shall, at the request of
Energy Auction Exchange, Inc., a Delaware corporation and the parent corporation
of the Buyer ("EAE"), serve, with no compensation, as a member of EAE's advisory
board (the "Advisory Board") to offer technical guidance and advice to EAE. EAE
may use, publish and/or distribute, as EAE shall determine, a biographical
background of each of Xxxxx Xxxxxxxx and Xxxxxxx Xxxxx in connection with their
membership on the Advisory Board.
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(g) Proprietary Software.
(i) The Buyer agrees that it shall use the
Proprietary Software only in connection with the Energy Industry and
that during the time that the Buyer owns such Proprietary Software,
only the Buyer and/or its Affiliates shall own the source code for such
Proprietary Software for use in connection with the Energy Industry and
the Buyer and/or its Affiliates shall not license the source code for
such Proprietary Software to any other Person.
(ii) The Seller agrees that it shall not use the
Proprietary Software in any way in connection with the Energy Industry.
(iii) The Buyer and the Seller agree that if either
transfers its ownership interest in, or licenses the Proprietary
Software, as a condition to such transfer or license the respective
transferee or licensee, as the case may be, shall agree to be bound by
the terms and provisions of this Section 6(g) as if such Person were a
party to this Agreement.
7. Conditions to Obligation to Close.
(a) Conditions to Obligation of the Buyer. The obligation of
the Buyer to consummate the transactions to be performed by it in connection
with the Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 3 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) the Seller and the Seller Stockholders shall
have performed and complied with all of their covenants hereunder in
all material respects through the Closing;
(iii) the Seller and the Seller Stockholders shall
have given notices to third parties and procured all of the third party
consents specified in Section 5(b) above;
(iv) no action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of any
federal, state, provincial, municipal, local, or foreign jurisdiction
or before any arbitrator or mediator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be
rescinded following consummation, or (C) affect adversely the right of
the Buyer to own the Acquired Assets or to operate the Business;
(v) the Seller and the Seller Stockholders shall have
delivered to the Buyer a certificate to the effect that each of the
conditions specified above in Section 7(a)(i)-(iv) is satisfied in all
respects;
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(vi) the Seller, the Seller Stockholders and the
Buyer shall have received all authorizations, consents, and approvals
of governments and governmental agencies referred to in Section 5(b)
above;
(vii) the Seller Stockholders shall have entered into
Noncompete Agreements in substantially the form of Exhibit E attached
hereto (the "Noncompete Agreement") and the same shall be in full force
and effect;
(viii) the Seller shall have entered into the
Transitional Services Agreement substantially in the form of Exhibit F
attached hereto (the "Transitional Services Agreement") and the same
shall be in full force and effect;
(ix) the Seller shall have delivered to the Buyer
digital copies of the Software, Customer Software and all other
available information used in connection with the Business (i.e.,
customer lists, business plans etc.) and hard copies of all other
information, files, records, books, agreements, documents, instruments
and similar items used in connection with the Business;
(x) the Seller shall have executed the Xxxx of Sale
and the same shall be in full force and effect;
(xi) the Buyer shall have completed a due diligence
review of the Division, which review shall be satisfactory to the Buyer
in its sole discretion;
(xii) The Seller shall have delivered to the Buyer a
server with copies of all Software and Customer Software, and the
testing of such server and software shall be satisfactory to the Buyer
in its sole discretion;
(xiii) no material adverse change shall have occurred
with respect to the business, financial condition, operations, results
of operations or future prospects of the Division or the ability of the
Parties to consummate the transactions contemplated by this Agreement;
and
(xiv) all actions to be taken by the Seller and the
Seller Stockholders in connection with consummation of the transactions
contemplated hereby and all certificates, instruments, and other
documents required to effect the transactions contemplated hereby will
be reasonably satisfactory in form and substance to the Buyer.
The Buyer may waive any condition specified in this Section 7(a) if it
executes a writing so stating at or prior to the Closing.
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(b) Conditions to Obligation of the Seller and the Seller
Stockholders. The obligation of the Seller and the Seller Stockholders to
consummate the transactions to be performed by them in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in
Section 4 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) the Buyer shall have performed and complied with
all of its covenants hereunder in all material respects through the
Closing;
(iii) no action, suit, or proceeding shall be pending
before any court or quasi-judicial or administrative agency of any
federal, state, provincial, municipal, local, or foreign jurisdiction
or before any arbitrator or mediator wherein an unfavorable injunction,
judgment, order, decree, ruling, or charge would (A) prevent
consummation of any of the transactions contemplated by this Agreement
or (B) cause any of the transactions contemplated by this Agreement to
be rescinded following consummation (and no such injunction, judgment,
order, decree, ruling, or charge shall be in effect);
(iv) the Buyer shall have delivered to the Seller a
certificate to the effect that each of the conditions specified above
in Section 7(b)(i)-(iii) is satisfied in all respects;
(v) the Seller, the Seller Stockholders and the Buyer
shall have received all material authorizations, consents, and
approvals of governments and governmental agencies referred to in
Section 5(b) above;
(vi) the Buyer shall have entered into the
Transitional Services Agreement substantially in the form of Exhibit F
attached hereto and the same shall be in full force and effect; and
(vii) all actions to be taken by the Buyer in
connection with consummation of the transactions contemplated hereby
and all certificates, instruments, and other documents required to
effect the transactions contemplated hereby will be reasonably
satisfactory in form and substance to the Seller.
The Seller and the Seller Stockholders may waive any condition
specified in this Section 7(b) if they execute a writing so stating at or prior
to the Closing.
8. Remedies for Breaches of This Agreement.
(a) Survival of Representations and Warranties. All of the
representations and warranties of the Seller, the Seller Stockholders and the
Buyer contained in this Agreement shall survive the Closing (even if the damaged
Party knew or had reason to know of any misrepresentation
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or breach of warranty at the time of Closing) and continue in full force and
effect for a period of one (1) year thereafter.
(b) Indemnification Provisions for Benefit of the Buyer.
(i) In the event the Seller or the Seller
Stockholders breach any of their (i) representations and warranties
contained in this Agreement, and, if there is an applicable survival
period pursuant to Section 8(a) above, provided that the Buyer makes a
written claim for indemnification against the Seller or the Seller
Stockholders, as the case may be, pursuant to Section 10(g) below
within such survival period, or (ii) covenants contained in this
Agreement, and the Buyer makes a written claim for indemnification
against the Seller or the Seller Stockholders, as the case may be,
pursuant to Section 10(g) below, then the Seller and the Seller
Stockholders, jointly and severally, agree to indemnify the Buyer from
and against the entirety of any Adverse Consequences the Buyer may
suffer through and after the date of the claim for indemnification
(including any Adverse Consequences the Buyer may suffer after the end
of any applicable survival period) resulting from, arising out of,
relating to, in the nature of, or caused by the breach; provided,
however, that (A) the Seller and the Seller Stockholders shall not have
any obligation to indemnify the Buyer from and against any Adverse
Consequences resulting from, arising out of, relating to, in the nature
of, or caused by the breach of any representation, warranty or covenant
of the Seller or the Seller Stockholders until the Buyer has suffered
Adverse Consequences by reason of all such breaches in excess of
US$50,000 in the aggregate (the "Basket"), in which case the Buyer
shall be entitled to recover the full amount of such claims, including
the amounts included in the Basket, pursuant to this Agreement, and (B)
there shall be a US$500,000 aggregate ceiling on the obligation of the
Seller and the Seller Stockholders to indemnify the Buyer from and
against Adverse Consequences resulting from, arising out of, relating
to, in the nature of, or caused by such breaches of the
representations, warranties or covenants of the Seller or the Seller
Stockholders.
(ii) The Seller and the Seller Stockholders, jointly
and severally, agree to indemnify the Buyer from and against the
entirety of any Adverse Consequences the Buyer may suffer resulting
from, arising out of, relating to, in the nature of, or caused by any
(A) liability of the Seller (including any liability of the Seller that
becomes a liability of the Buyer under any bulk transfer law of any
jurisdiction, under any common law doctrine of de facto merger or
successor liability, or otherwise by operation of law), (B) liability
of the Business arising, incurred, for or in connection with any period
on or prior to the Closing Date, or (C) breach of the terms and
provisions of the Transitional Services Agreement.
(c) Indemnification Provisions for Benefit of the Seller.
(i) In the event the Buyer breaches any of its (i)
representations and warranties contained in this Agreement, and, if there is an
applicable survival period pursuant to Section 8(a) above, provided that the
Seller makes a written claim for indemnification against the Buyer pursuant to
Section 10(g) below within such survival period, or (ii) covenants contained in
this Agreement, and the Seller makes a written claim for indemnification against
the
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Buyer pursuant to Section 10(g) below, then the Buyer and EAE agree to indemnify
the Seller from and against the entirety of any Adverse Consequences the Seller
may suffer through and after the date of the claim for indemnification
(including any Adverse Consequences the Seller may suffer after the end of any
applicable survival period) resulting from, arising out of, relating to, in the
nature of, or caused by the breach; provided, however, that (A) the Buyer and
EAE shall not have any obligation to indemnify the Seller from and against any
Adverse Consequences resulting from, arising out of, relating to in the nature
of, or caused by the breach of any representation, warranty or covenant of the
Buyer until the Seller has suffered Adverse Consequences by reason of all such
breaches in excess of the Basket, in which case the Seller shall be entitled to
recover the full amount of such claims, including the amounts in the Basket,
pursuant to this Agreement, and (B) there shall be a US$100,000 aggregate
ceiling on the obligation of the Buyer and EAE to indemnify the Seller from and
against Adverse Consequences resulting from, arising out of, relating to, in the
nature of, or caused by such breaches of the representations, warranties or
covenants of the Buyer.
(ii) The Buyer and EAE agree to indemnify the Seller
from and against the entirety of any Adverse Consequences the Seller may suffer
resulting from, arising out of, relating to, in the nature of, or caused by the
Buyer and/or its Affiliates transferring ownership of or licensing the source
code for the Proprietary Software for use in connection with the Energy Industry
in breach of the Buyer's covenant contained in Section 6(g) above; provided,
however, that (A) the Buyer and EAE shall not have any obligation to indemnify
the Seller from and against any Adverse Consequences resulting from, arising out
of, relating to in the nature of, or caused by such breach of the Buyer's
covenant until the Seller has suffered Adverse Consequences by reason of such
breach in excess of the Basket, in which case the Seller shall be entitled to
recover the full amount of such claims, including the amounts in the Basket,
pursuant to this Agreement, and (B) there shall be a US$200,000 aggregate
ceiling on the obligation of the Buyer and EAE to indemnify the Seller from and
against Adverse Consequences resulting from, arising out of, relating to, in the
nature of, or caused by such breach of the Buyer's covenant contained in Section
6(g) above.
(d) Matters Involving Third Parties.
(i) If any third party shall notify any Party (the
"Indemnified Party") with respect to any matter (a "Third Party Claim")
which may give rise to a claim for indemnification against any other
Party (the "Indemnifying Party") under this Section 8, then the
Indemnified Party shall promptly notify the Indemnifying Party thereof
in writing; provided, however, that no delay on the part of the
Indemnified Party in notifying the Indemnifying Party shall relieve the
Indemnifying Party from any obligation hereunder unless (and then
solely to the extent) the Indemnifying Party thereby is prejudiced.
(ii) The Indemnifying Party will have the right to
assume the defense of the Third Party Claim with counsel of its choice
reasonably satisfactory to the Indemnified Party at any time within
fifteen (15) days after the Indemnified Party has given notice of the
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28
Third Party Claim; provided, however, that the Indemnifying Party must
conduct the defense of the Third Party Claim actively and diligently
thereafter in order to preserve its rights in this regard; provided
further that the Indemnified Party may retain separate co-counsel at
its sole cost and expense and participate in the defense of the Third
Party Claim.
(iii) So long as the Indemnifying Party has assumed
and is conducting the defense of the Third Party Claim in accordance
with Section 8(d)(ii) above, (A) the Indemnifying Party will not
consent to the entry of any judgment or enter into any settlement with
respect to the Third Party Claim without the prior written consent of
the Indemnified Party (not to be withheld unreasonably) unless the
judgment or proposed settlement involves only the payment of money
damages by the Indemnifying Party and does not impose an
injunction or other equitable relief upon the Indemnified Party, and
(B) the Indemnified Party will not consent to the entry of any judgment
or enter into any settlement with respect to the Third Party Claim
without the prior written consent of the Indemnifying Party (not to be
withheld unreasonably).
(iv) In the event the Indemnifying Party does not
assume and conduct the defense of the Third Party Claim in accordance
with Section 8(d)(ii) above, however, (A) the Indemnified Party may
defend against, and consent to the entry of any judgment or enter into
any settlement with respect to, the Third Party Claim in any manner it
reasonably may deem appropriate (and the Indemnified Party need not
consult with, or obtain any consent from, the Indemnifying Party in
connection therewith), and (B) the Indemnifying Party will remain
responsible for any Adverse Consequences the Indemnified Party may
suffer resulting from, arising out of, relating to, in the nature of,
or caused by the Third Party Claim to the fullest extent provided in
this Section 8.
(e) Determination of Adverse Consequences. The Parties shall
make appropriate adjustments for tax consequences and insurance coverage and
take into account the time cost of money (using the Applicable Rate as the
discount rate) in determining Adverse Consequences for purposes of this Section
8. All indemnification payments under this Section 8 shall be deemed adjustments
to the Purchase Price.
(f) Other Indemnification Provisions. The foregoing
indemnification provisions are in addition to, and not in derogation of, any
statutory, equitable, or common law remedy any Party may have for breach of any
representation, warranty, or covenant with respect to the Division or the
transactions contemplated by this Agreement.
9. Termination.
(a) Termination of Agreement. Certain of the Parties may
terminate this Agreement as provided below:
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29
(i) the Buyer and the Seller may terminate this
Agreement by mutual written consent at any time prior to the Closing;
(ii) the Buyer may terminate this Agreement by giving
written notice to the Seller at any time prior to the Closing (A) in
the event the Seller has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, the Buyer has notified the Seller of the breach, and the
breach has continued without cure for a period of fifteen (15) days
after the notice of breach, or (B) if the Closing shall not have
occurred on or before September 30, 1999, by reason of the failure of
any condition precedent under Section 7(a) hereof (unless the failure
results primarily from the Buyer itself breaching any representation,
warranty, or covenant contained in this Agreement); and
(iii) the Seller may terminate this Agreement by
giving written notice to the Buyer at any time prior to the Closing (A)
in the event the Buyer has breached any material representation,
warranty, or covenant contained in this Agreement in any material
respect, the Seller has notified the Buyer of the breach, and the
breach has continued without cure for a period of fifteen (15) days
after the notice of breach, or (B) if the Closing shall not have
occurred on or before September 30, 1999, by reason of the failure of
any condition precedent under Section 7(b) hereof (unless the failure
results primarily from the Seller itself breaching any representation,
warranty, or covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this
Agreement pursuant to Section 9(a) above, all rights and obligations of the
Parties hereunder shall terminate without any liability of any Party to any
other Party (except for any liability of any Party then in breach); provided,
however, that the confidentiality provisions contained in Section 5(e) above
shall survive termination.
10. Miscellaneous.
(a) Press Releases and Public Announcements. No Party shall
issue any press release or public announcement relating to the subject matter of
this Agreement prior to the Closing without the prior written approval of the
other Parties; provided, however, that any Party may make any public disclosure
it believes in good faith is required by applicable law (in which case the
disclosing Party will use its reasonable best efforts to advise the other
Parties prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not
confer any rights or remedies upon any Person other than the Parties and their
respective successors and permitted assigns.
(c) Entire Agreement. This Agreement (including any ancillary
documents referred to herein) constitutes the entire agreement between the
Parties and supersedes any prior
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30
understandings, agreements, or representations by or between the Parties,
written or oral, to the extent they related in any way to the subject matter
hereof.
(d) Succession and Assignment. This Agreement shall be binding
upon and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of its rights, interests, or obligations hereunder without the prior written
approval of the other Parties; provided, however, that the Buyer may (i) assign
any or all of its rights and interests hereunder to one or more of its
Affiliates, and (ii) designate one or more of its Affiliates to perform its
obligations hereunder (in any or all of which cases the Buyer nonetheless shall
remain responsible for the performance of all of its obligations hereunder).
(e) Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The section headings contained in this Agreement
are inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then three
(3) business days after) it is sent by registered or certified mail, return
receipt requested, postage prepaid, and addressed to the intended recipient as
set forth below:
If to the Seller or the Seller Stockholders:
World Web Technologies Inc.
#000, 0000 - 0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attn: Xxxxx Xxxxxxxx
Facsimile No: (000) 000-0000
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31
If to the Buyer:
EAEDP, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
XXX
Attn: Xxxx X. Xxxxxxx
Facsimile No.: (000) 000-0000
With a copy to:
Xxxxxx Xxxxx Xxxxx Xxxxxxxxx & Xxxxxx LLC
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxx 00000
XXX
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Any Party may send any notice, request, demand, claim, or other communication
hereunder to the intended recipient at the address set forth above using any
other means (including personal delivery, expedited courier, messenger service,
telecopy, telex, ordinary mail, or electronic mail), but no such notice,
request, demand, claim, or other communication shall be deemed to have been duly
given unless and until it actually is received by the intended recipient. Any
Party may change the address to which notices, requests, demands, claims, and
other communications hereunder are to be delivered by giving the other Parties
notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and
construed in accordance with the domestic laws of the State of Colorado without
giving effect to any choice or conflict of law provision or rule (whether of the
State of Colorado or any other jurisdiction) that would cause the application of
the laws of any jurisdiction other than the State of Colorado.
(i) Amendments and Waivers. No amendment of any provision of
this Agreement shall be valid unless the same shall be in writing and signed by
the Parties hereto. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that
is invalid or unenforceable in any situation in any jurisdiction shall not
affect the validity or enforceability of the
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32
remaining terms and provisions hereof or the validity or enforceability of the
offending term or provision in any other situation or in any other jurisdiction.
(k) Expenses. Each of the Parties hereto will bear their own
costs and expenses (including legal fees and expenses) incurred in connection
with this Agreement and the transactions contemplated hereby.
(l) Construction. The Parties have participated jointly in the
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state,
provincial, local, municipal or foreign statute or law shall be deemed also to
refer to all rules and regulations promulgated thereunder, unless the context
requires otherwise. The word "including" shall mean including without
limitation.
(m) Incorporation of Exhibits and Schedules. The Exhibits and
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(n) Tax Matters.
(i) The Seller will be responsible for the
preparation and filing of all Income Tax Returns for the Division for
all periods as to which Income Tax Returns are due before and after the
Closing Date (including the consolidated, unitary, and combined Income
Tax Returns for the Seller which include the operations of the Division
for any period ending on or before the Closing Date). The Seller will
make all payments required with respect to any such Income Tax Return.
(ii) The Buyer will be responsible for the
preparation and filing of all Income Tax Returns for the Division for
all periods as to which Income Tax Returns are due after the Closing
Date (other than for Income Taxes with respect to periods for which the
consolidated, unitary, and combined Income Tax Returns of the Seller
will include the operations of the Division as set forth in Section
10(n)(i) above). The Buyer will make all payments required with respect
to any such Income Tax Return; provided, however, that the Seller will
reimburse the Buyer concurrently therewith to the extent any payment
the Buyer is making relates to the operations of the Division for any
period ending on or before the Closing Date.
(o) Execution. The Parties shall be entitled to rely on
delivery by facsimile machine of an executed copy of this Agreement and such
facsimile copy shall be effective to create a valid and binding agreement among
the Parties in accordance with the terms hereof.
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(p) Specific Performance. Each of the Parties acknowledges and
agrees that the other Parties hereto would be damaged irreparably in the event
any of the provisions of this Agreement are not performed in accordance with
their specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties hereto shall be entitled to an injunction or
injunctions to prevent breaches of the provisions of this Agreement and to
enforce specifically this Agreement and the terms and provisions hereof in any
action instituted in any court of the United States or any state thereof having
jurisdiction over the Parties and the matter (subject to the provisions set
forth in Section 10(r) below), in addition to any other remedy to which they may
be entitled, at law or in equity.
(q) Dispute Notification and Resolution Procedure. Any
disputes or claims (collectively, "Claims") arising out of or related to this
Agreement or a breach hereof shall be subject to the following provisions:
(i) Any Party with a Claim (the "Claimant") shall
notify any other Party against whom the Claimant has a Claim (the "Notified
Party") in writing of the Claim, which writing shall describe the nature of the
Claim and the proposed remedy (the "Claim Notice").
(ii) Within a reasonable period of time after receipt
of the Claim Notice, which period shall not exceed sixty (60) days, the Notified
Party and the Claimant shall meet at a mutually-acceptable location to discuss
the Claim. The Notified Party and the Claimant shall negotiate in good faith in
an attempt to resolve the Claim.
(iii) If the Claimant and the Notified Party cannot
resolve the Claim pursuant to the procedures described in subparagraphs (q)(i)
and (ii) above, either the Claimant or the Notified Party may commence binding
arbitration with the American Arbitration Association. The following rules and
procedures shall apply in all cases unless the parties to the arbitration agree
otherwise:
(A) The provider shall be the American
Arbitration Association. The proceeding shall be governed by the rules
and procedures of the Arbitrator, subject to the modification described
herein.
(B) The proceeding shall be held in Denver,
Colorado.
(C) There shall be one arbitrator (the
"Arbitrator") mutually acceptable to the parties to the arbitration;
provided, however, that if the parties to the arbitration cannot
mutually agree upon an Arbitrator within fifteen (15) days of the
submission of the Claim to arbitration, the American Arbitration
Association shall select the Arbitrator.
(iv) The Arbitrator shall be an attorney or retired
judge.
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34
(v) The Arbitrator in his or her discretion may order
such discovery as any party to the arbitration may request, including
without limitation production of documents and depositions.
(vi) If the parties to the arbitration agree, the
Arbitrator may retain a neutral expert to advise the Arbitrator on
technical matters.
(vii) The rules of evidence need not be followed at
the arbitration hearing, provided that the Arbitrator shall follow
substantive rules of law in rendering his or her decision. Any party to
the arbitration may request a stenographic record of the arbitration
hearing.
(viii) The Arbitrator may award such legal and
equitable damages as may be rendered in a court of law, including
without limitation money damages and injunctive relief.
(ix) The Arbitrator shall render a written decision
within thirty (30) days of the closing of the arbitration hearing
unless an extension is granted by all parties to the arbitration. The
decision shall contain findings of fact and conclusions of law. The
decision shall be final and binding on the parties to the arbitration
and may be enforced in any court of competent jurisdiction.
(x) The Arbitrator shall have the discretion to award
costs and attorneys' fees to the party that the Arbitrator has
determined is the prevailing party.
(r) Submission to Jurisdiction. Each of the Parties submits to
the jurisdiction of any state or federal court sitting in Denver, Colorado, in
any action or proceeding arising out of or relating to Section 10(p) above or
the enforcement of an arbitration decision pursuant to Section 10(q) above and
agrees that all claims in respect of the action or proceeding may be heard and
determined in any such court. Each Party also agrees not to bring any action or
proceeding arising out of or relating to this Agreement in any other court. Each
of the Parties waives any defense of inconvenient forum to the maintenance of
any action or proceeding so brought and waives any bond, surety, or other
security that might be required of any other Party with respect thereto. Any
Party may make service on any other Party by sending or delivering a copy of the
process to the Party to be served at the address and in the manner provided for
the giving of notices in Section 10(g) above. Nothing in this Section 10(r),
however, shall affect the right of any Party to serve legal process in any other
manner permitted by law or at equity. Each Party agrees that a final judgment in
any action or proceeding so brought shall be conclusive and may be enforced by
suit on the judgment or in any other manner provided by law or at equity.
* * * * *
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.
WORLD WEB TECHNOLOGIES INC.
/s/
---------------------------------------
By:
----------------------------------
Its:
----------------------------------
EAEDP, INC.
/s/
---------------------------------------
By:
----------------------------------
Its:
----------------------------------
SELLER STOCKHOLDERS:
/s/ Xxxxx Xxxxxxxx
---------------------------------------
Xxxxx Xxxxxxxx
/s/ Xxxxxxx Xxxxx
---------------------------------------
Xxxxxxx Xxxxx
/s/ Xxx Xxxxxx
---------------------------------------
Xxx Xxxxxx
/s/ Xxxx Xxxxxxxx
---------------------------------------
Xxxx Xxxxxxxx
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EXHIBIT A
XXXX OF SALE AND ASSIGNMENT
37
EXHIBIT B
ALLOCATION SCHEDULE
Asset Allocation
----- ----------
1. Software US$252,500
2. Hardware US$500
3. All other Acquired Assets US$247,000
38
EXHIBIT C
FINANCIAL STATEMENTS AND PROJECTIONS
39
EXHIBIT D
NONCOMPETE GEOGRAPHIC AREA
I. United States and Districts
Alabama
Alaska
Arizona
Arkansas
California
Colorado
Connecticut
Delaware
District of Columbia
Florida
Georgia
Hawaii
Idaho
Illinois
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland
Massachusetts
Michigan
Minnesota
Mississippi
Missouri
Montana
Nebraska
Nevada
New Hampshire
New Jersey
New Mexico
New York
North Carolina
North Dakota
Ohio
Oklahoma
Oregon
40
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Utah
Vermont
Xxxxxxxx
Xxxxxxxxxx
West Virginia
Wisconsin
Wyoming
II. Mexico States and Federal Districts
Aguascalientes
Baja California
Baja California Sur
Campeche
Chiapas
Chihuahua
Coahuila xx Xxxxxxxx
Colima
Distrito Federal
Durango
Guanajuato
Xxxxxxxx
Xxxxxxx
Jalisco
Mexico
Michoacan xx Xxxxxx
Morelos
Nayarit
Nuevo Xxxx
Xxxxxx
Puebla
Queretaro de Xxxxxxx
Xxxxxxxx Roo
San Xxxx Potosi
Sinaloa
Sonora
Tabasco
Tamaulipas
41
Tlaxcala
Veracruz-Llave
Yucatan
Zacatecas
III. Canada Provinces and Territories
Alberta
British Columbia
Manitoba
New Brunswick
Newfoundland
Northwest Territories
Nova Scotia
Nunavut
Ontario
Xxxxxx Xxxxxx Island
Quebec
Saskatchewan
Yukon Territory
42
EXHIBIT E
FORM OF NONCOMPETE AGREEMENT
43
EXHIBIT F
FORM OF TRANSITIONAL SERVICES AGREEMENT
