ASSET ACQUISITION AGREEMENT
AMONG
ZEOSOFT CORPORATION, a Florida corporation,
NEOMETRIX TECHNOLOGY GROUP, INC., a Delaware corporation
AND
NEOMETRIX ACQUISITION I, INC., a Delaware corporation
Dated: April 1, 2003
TABLE OF CONTENTS
Page
BACKGROUND 1
ARTICLE I - SALE AND PURCHASE OF ASSETS 1
Section 1.01 Purchased Assets; Excluded Assets 1
Section 1.02 Assumed Obligations 2
Section 1.03 Excluded Assets 3
Section 1.04 Consideration 3
Section 1.05 Allocation of Purchase Price 3
Section 1.06 Tax Consequences 3
ARTICLE II - CLOSING; DOCUMENTS OF CONVEYANCE 4
Section 2.01 Closing 4
Section 2.02 Actions to be Taken at the Closing 4
Section 2.03 Prorations at Closing 5
Section 2.04 Transfer of Possession 6
Section 2.05 Utility Services 6
ARTICLE III -REPRESENTATIONS AND WARRANTIES OF BUYER 6
Section 3.01 Organization and Good Standing 6
Section 3.02 Power and Authority 6
Section 3.03 Validity of Contemplated Transactions 6
Section 3.04 Capitalization 6
Section 3.05 No Business 6
ARTICLE IV- REPRESENTATIONS AND WARRANTIES OF PARENT 7
Section 4.01 Due Organization 7
Section 4.02 Capitalization, Etc. 7
Section 4.03 Financial Statements 8
Section 4.04 Tax Matters 8
Section 4.05 Insurance 8
Section 4.06 Legal Proceedings 8
Section 4.07 Assets 8
Section 4.08 Real Property 9
Section 4.09 Compliance with Laws 9
Section 4.10 Guarantees 9
Section 4.11 Authority; Binding Nature of Agreement 9
Section 4.12 Non-Contravention 9
Section 4.13 Environmental Matters 10
Section 4.14 Significant Customers; Material
Contracts and Commitments 10
Section 4.15 Employee Benefit Plans 11
Section 4.16 Intellectual Property 11
Section 4.17 Software Licenses 12
Section 4.18 Full Disclosure 12
Section 4.19 Valid Issuance 13
ARTICLE V - REPRESENTATIONS AND WARRANTIES OF SELLER 13
Section 5.01 Due Organization 13
Section 5.02 Financial Statements. 13
Section 5.03 Tax Matters 13
Section 5.04 Insurance 13
Section 5.05 Legal Proceedings 14
Section 5.06 Assets 14
Section 5.07 Real Property 14
Section 5.08 Compliance with Laws 14
Section 5.09 Guarantees 14
Section 5.10 Authority; Binding Nature of
Agreement 14
Section 5.11 Non-Contravention 14
Section 5.12 Environmental Matters 15
Section 5.13 Significant Customers; Material
Contracts and Commitments 16
Section 5.14 Intellectual Property 16
Section 5.15 Software Licenses 17
Section 5.16 Full Disclosure 17
ARTICLE VI - CONDITIONS PRECEDENT TO OBLIGATIONS
OF BUYER AND PARENT 17
Section 6.01 Accuracy of Representations 17
Section 6.02 Performance of Covenants 17
Section 6.03 Consents 18
Section 6.04 Agreements and Documents 18
Section 6.05 Additional Loans 18
Section 6.06 No Change of Control 18
ARTICLE VII - CONDITIONS PRECEDENT TO OBLIGATIONS
OF SELLER 18
Section 7.01 Accuracy of Representations 18
Section 7.02 Performance of Covenants 19
Section 7.03 Consents 19
Section 7.04 Agreements and Documents 19
ARTICLE VIII - SURVIVAL OF REPRESENTATIONS AND
WARRANTIES; INDEMNIFICATION 19
Section 8.01 Survival of Representations
and Warranties 19
Section 8.02 Seller Indemnity 19
Section 8.03 Indemnity Agreement of Parent
and Buyer 20
Section 8.04 Indemnification Procedure 21
ARTICLE IX - CONDUCT OF THE PARTIES AFTER CLOSING 21
Section 9.01 Cooperation 21
Section 9.02 Access to Books and Records 22
Section 9.03 Use of Name 22
Section 9.04 Repayment of Obligations 22
Section 9.05 Incentive Compensation 22
ARTICLE X - MISCELLANEOUS 22
Section 10.01 144 Legend 22
Section 10.02 Further Assurances 23
Section 10.03 Fees and Expenses 23
Section 10.04 Attorneys' Fees 23
Section 10.05 Notices 23
Section 10.06 Severability 24
Section 10.07 Headings 24
Section 10.08 Counterparts 25
Section 10.09 Governing Law; Venue 25
Section 10.10 Interpretation 25
Section 10.11 Remedies Cumulative; Specific
Performance 25
Section 10.12 Waiver 26
Section 10.13 Amendments 26
Section 10.14 Entire Agreement 26
Section 10.15 Board Appointment 26
Section 10.16 Share Combination 26
Section 10.17 Public Trading of Buyer Stock 26
Section 10.18 Construction 27
SCHEDULES AND EXHIBITS
Exhibits Description
Exhibit A............................Certain Definitions
Exhibit B............................Lease Agreement
Exhibit C............................Allocation of Purchase Price
Exhibit D............................Xxxx of Sale and Assignment
Exhibit E............................Class B Secured Promissory Note
Exhibit F............................Assumption and Release Agreement
Exhibit G............................Class A-1 Secured Promissory Note
Exhibit H............................Class A-2 Secured Promissory Note
Exhibit I............................Security Agreement
Exhibit J............................Guaranty
Schedules Description
Schedule 1.01(a).....................Patents, Trademarks, and Applications
Schedule 1.01(j).....................List of Leased Assets
Schedule 1.02........................Assumed Obligations
Schedule 4.02........................Share Restrictions, etc.
Schedule 4.03........................Financial Statement Exceptions
Schedule 4.04........................Tax Exceptions
Schedule 4.05........................Insurance
Schedule 4.06........................Legal Proceedings
Schedule 4.07........................Liens and Encumbrances
Schedule 4.08........................Real Property Leases
Schedule 4.14........................Material Contracts
Schedule 4.15........................Employee Benefits Plans
Schedule 4.16........................Intellectual Property Exceptions
Schedule 5.02........................Financial Statement Exceptions
Schedule 5.03........................Tax Exceptions
Schedule 5.04........................Insurance
Schedule 5.05........................Legal Proceedings
Schedule 5.06........................Liens and Encumbrances
Schedule 5.07........................Real Property Leases
Schedule 5.13........................Material Contracts
Schedule 5.14........................Intellectual Property Exceptions
ASSET ACQUISITION AGREEMENT
This Asset Acquisition Agreement (the "Agreement") is made as of the 1st day of
April, 2003, by and among Neometrix Acquisition I, Inc., a Delaware corporation
(hereafter "Buyer"), Neometrix Technology Group, Inc., a Delaware corporation
(hereafter, "Parent"), and Zeosoft Corporation, a Florida corporation
(hereafter "Seller")
BACKGROUND
WHEREAS, the Seller is engaged in business as a developer of software for use
on hand-held computing devices; and
WHEREAS, the Seller desires to sell substantially all of its assets and, under
the terms and conditions set forth in this Agreement, the Buyer has agreed to
purchase such assets and assume certain of the Seller's obligations; and
WHEREAS, the Parent, as the owner of all of the capital stock of the Buyer,
has agreed to join in this Agreement to provide certain guarantees and other
consideration in order to induce the Seller to enter into this Agreement;
NOW, THEREFORE, in consideration of the foregoing and of the mutual promises,
covenants, representations, warranties, and agreements contained herein, and
intending to be legally bound, the Seller, the Buyer, and the Parent agree as
follows:
ARTICLE I
SALE AND PURCHASE OF ASSETS
Section 1.01 Purchased Assets. Subject to the terms and conditions of
this Agreement, on the Closing Date (as defined in Section 2.01), Seller will
sell to Buyer, and Buyer will purchase from Seller, the assets of Seller
listed below(collectively, the "Purchased Assets"). The Purchased Assets will
be purchased free and clear of all security interests, liens, restrictions,
claims, encumbrances or charges of any kind ("Encumbrances"), except as
provided herein. The Purchased Assets will include the following items:
(a) Intellectual Property. All trademarks and trademark applications, and
all patents and patent applications, including specifically those set forth in
Schedule 1.01(a), all goodwill associated therewith, and all computer software
developed by Seller, including all documentation thereof and all other
Intellectual Property (as defined in Section 4.16) of Seller, and all rights
to use the name "Zeosoft;"
(b) Promotional Rights. All marketing or promotional designs, brochures,
advertisements, concepts, literature, books, media rights, rights against any
other Person in respect of any of the foregoing and all other promotional
properties, in each case primarily used or useful or developed or acquired by
the Seller for use in connection with the ownership and operation of the
Purchased Assets;
(c) Cash. The sum of $250,000 in cash;
(d) Customer Lists and other Intangible Assets. All other intangible assets,
including without limitation all customer lists, goodwill, "know-how,"
proprietary information and trade secrets relating to the Seller's business
operations; and all manufacturers' warranties (including pending warranty
claims) and manuals relating to the Purchased Assets;
(e) Seller's Deposits and Prepayments. All of the Seller's lease deposits
on leases assumed by Buyer;
(f) Permits. All permits relating to the operation of Seller's business, to
the extent such permits are transferable and whether or not all action
necessary to effect such transfer has been taken prior to the Closing;
(g) Leases. All real property leases of Seller, to the extent such are
assignable.
(h) Telephone and Facsimile Numbers. The right to use the telephone and
facsimile machine numbers assigned to Seller's places of business in Arizona
and New Jersey;
(i) Books and Records. Except as expressly set forth in Section 1.03, all
papers, documents, computerized databases and records of Seller relating to
the Purchased Assets and its business operations, including without limitation
all software design documents, source code, employer records and workers'
compensation records relating to employees hired by the Buyer, sales records,
marketing records, accounting and financial records, and maintenance and
production records; and
(j) Claims Relating to Purchased Assets. All claims, causes of action,
rights of recovery and rights of setoff of every type and kind relating to the
Purchased Assets and all claims, causes of action, rights of recovery and
rights of setoff of every type and kind relating to the Assumed Obligations
(as defined in Section 1.02), in each case whether accruing before or after the
Closing;
provided, however, that the definition of Purchased Assets shall not include
any items defined as Excluded Assets in Section 1.03. Buyer will also lease
from Seller all leasehold improvements, furniture, furnishings, signs,
displays and other fixed assets owned by the Seller, including without
limitation computer hardware, as more particularly described in Schedule
1.01(j) attached hereto and incorporated herein by reference. Such lease will
be in the form of the Equipment Lease hereto attached as Exhibit B.
Section 1.02 Assumed Obligations. In consideration of Buyer's purchase
of the Purchased Assets, subject to the terms and conditions set forth herein,
on the Closing Date the Seller shall assign to the Buyer and the Buyer shall
assume and discharge in a timely fashion all of the liabilities and
obligations of the Seller set forth on Schedule 1.02 (hereafter collectively
referred to as the "Assumed Obligations").
Except as expressly set forth in this Section 1.02, the Buyer shall have no
responsibility for any of the Seller's obligations (including contracts,
leases, product warranties, purchase orders and liabilities of any type,
kind or nature), whether fixed, accrued, contingent or otherwise, and whether
arising in contract, in tort, by violation of law, by operation of law, or
otherwise, and all such obligations shall remain with the Seller and are
herein referred to as the "Excluded Obligations."
Section 1.03 Excluded Assets. The Purchased Assets shall not include
any of the Seller's rights, privileges, title or interest in the following
assets (hereafter referred to as the "Excluded Assets"):
(a) Books and Records. All of the Seller's minute books, stock books, tax
returns and books and records directly relating to the Excluded Obligations
and all of Seller's books and records that it acquired in foreclosure from
Xxxxxx, Inc., except to the extent that such records relate to the
intellectual property purchased hereunder;
(b) Rights Hereunder. All rights and claims of the Seller under this
Agreement; and
(c) Contracts not Assigned. All rights of the Seller in, to and under those
leases, purchase orders, contracts and other agreements not being assigned to
the Buyer pursuant to Section 1.01.
(d) Tangible Personal Property. All of the tangible personal property
leased to Seller pursuant to the terms of Section 1.0.1.
(e) Additional Cash. Seller's cash in excess of that specified in
Section 1.01(c).
Section 1.04 Consideration. In addition to the assumption of the Assumed
Obligations, at the Closing, Buyer shall deliver to Seller 6,000,000 shares of
Parent's common stock.
Section 1.05 Allocation of Purchase Price. At or prior to the Closing,
the Buyer and the Seller shall execute a written instrument in the form of
Exhibit C setting forth by asset category and amount the mutually agreed
allocation of the consideration being paid by the Buyer for the Purchased
Assets. Each party agrees to report the purchase and sale contemplated herein
on Internal Revenue Service Form 8594 and for all other federal and state tax
purposes in accordance with such allocation.
Section 1.06 Tax Consequences. For federal income tax purposes, the
transactions contemplated hereby are intended to constitute a "reorganization"
within the meaning of Section 368 of the Code. The parties to this Agreement
hereby adopt this Agreement as a "plan of reorganization" within the meaning of
Sections 1.368-2(g) and 1.368-3(a) of the United States Treasury Regulations,
and each party is intended to be a "party to the reorganization" within the
meaning of Section 368 of the Code.
ARTICLE II
CLOSING; DOCUMENTS OF CONVEYANCE
Section 2.01 Closing. Subject to the satisfaction of the conditions set
forth in Articles VI and VII, the purchase and sale contemplated hereby shall
be consummated at a closing (referred to herein as the "Closing") to be held
at the offices of Seller in Tampa, Florida, on April 1, 2003 (the "Closing
Date"). The purchase and sale shall be deemed effective for all purposes as
of the close of business on the Closing Date (the "Effective Time").
Section 2.02 Actions to be Taken at the Closing. At the Closing, the
Parties will take the following actions and deliver the following documents:
(a) Seller will execute and deliver to Buyer a Xxxx of Sale and Assignment
Agreement in substantially the form attached hereto as Exhibit D, together with
such other instruments of conveyance and evidence of the transfer of title to
the Purchased Assets from Seller to Buyer as Buyer may reasonably request.
(b) Parent will deliver to Buyer 8,320,000 shares of Parent's common stock,
plus any shares of Parent's common stock issuable under Sections 2.02(h) and
6.05 hereof;.
(c) Buyer will deliver to Parent Buyer's Class B Secured Promissory Notes in
substantially the form of Exhibit E, in the original principal amount of
$1,169,273.50.
(d) Buyer will deliver to Seller certificates representing 6,000,000 shares
of Parent's common stock in exchange for the Purchased Assets.
(e) Buyer will deliver to the holders of Seller's Series A Convertible
Secured Promissory Notes (the "Zeosoft Notes") 1,820,000 shares of Parent's
common stock in exchange for all of the Zeosoft Notes except those specified
in Sections 2.02(g) and (h). The holders of those Zeosoft Notes will deliver
them to Parent, who will exchange them for the Buyer's Class B Secured
Promissory Notes described in Section 2.02(c).
(f) Buyer will deliver to Seller an Assumption and Release Agreement in
substantially the form of Exhibit F.
(g) Buyer will deliver to the holders of $500,000 in principal amount of the
Zeosoft Notes a like principal amount of Buyer's Class A-1 Secured Promissory
Notes in substantially the form of Exhibit G and 500,000 shares of Parent's
common stock, and the holders of such Zeosoft Notes will deliver them to Buyer.
(h) Buyer will deliver to the holders of the Zeosoft Notes issued pursuant
to Section 6.05 a like principal amount of Buyer's Class A-2 Secured
Promissory Notes in substantially the form of Exhibit H and one share of
Parent's common stock for each dollar in principal amount of those Zeosoft
Notes and the holders of such Zeosoft Notes will deliver them to Buyer.
(i) Buyer will deliver to the holders of its Class X-0, Xxxxx X-0, and
Class B Secured Promissory Notes a Security Agreement in substantially the
form of Exhibit I.
(j) Parent, Buyer, and Seller will each deliver to the others (to the extent
applicable), all consents and approvals (including, without limitation,
resolutions and incumbency certificates of the directors and officers of each,
and necessary minutes or resolutions of the stockholders of each) required for
each party to enter into this Agreement and consummate the transactions
described herein.
(k) Parent will execute and deliver to the holders of Buyer's Class A-1 and
Class A-2 Secured Promissory Notes Parent's guaranty of payment of those Notes
in substantially the form of Exhibit J.
(l) Seller will deliver to Buyer copies of an amendment to its articles of
incorporation, changing its name.
(m) Seller will deliver to Buyer and Parent copies of its Plan of Liquidation
and Dissolution.
All instruments of conveyance shall be free of all Encumbrances except for any
liens securing the Assumed Obligations and shall be in form and content
reasonably acceptable to counsel for the Buyer and the Seller.
Section 2.03 Prorations at Closing. All compensation (including
vacation and sick pay accruals, as applicable), payroll and withholding taxes
relating to the Seller's employees, including wages accrued but unpaid for the
current payroll period (determined as of the Closing Date) shall be paid by
the Buyer when due and shall be treated as an Assumed Obligation; provided,
however, that Seller will pay the entire payroll for the period ending
March 31, 2003. Seller will also pay all bills for ordinary accounts payable
received prior to the Effective Time, and Buyer will pay all bills for
ordinary accounts payable received after the Effective Time, not to exceed
$10,000 in the aggregate, plus the Assumed Obligations. All other operating
expenses and liabilities relating to the ownership and operation of the
Purchased Assets attributable to the period ending at the Effective Time that
are not Assumed Obligations shall be paid by the Seller as they fall due.
The Assumed Obligations and all operating and other expenses relating to the
ownership and operation of the Purchased Assets attributable to periods
commencing on and after the Effective Time shall be the sole responsibility
of the Buyer.
Section 2.04 Transfer of Possession. Simultaneously with the Effective
Time, the Seller shall give the Buyer full possession and enjoyment of the
Purchased Assets.
Section 2.05 Utility Services. On the Closing Date or as soon thereafter
as practicable, the Seller and the Buyer will cooperate with each other to
arrange to disconnect or obtain final readings with respect to all electricity,
water, telephone, and other utilities, and to have such services reconnected
in or otherwise transferred to the Buyer's name immediately thereafter.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to the Seller as follows:
Section 3.01 Organization and Good Standing. The Buyer is a Delaware
corporation, duly organized, validly existing, and in good standing.
Section 3.02 Power and Authority. The Buyer has the requisite power and
authority to execute, deliver, and perform its obligations under and pursuant
to this Agreement, including without limitation, the requisite power and
authority to acquire the Purchased Assets and assume the Assumed Obligations
upon the terms and conditions set forth herein. The execution and delivery of
this Agreement and the consummation of the transactions contemplated hereby
have been duly authorized by all necessary action on the part of the Buyer.
This Agreement has been duly executed and is a legal, valid and binding
obligation of the Buyer, enforceable in accordance with its terms, except
as such enforcement may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or similar laws affecting the enforcement of
creditors' rights generally and by general principles of equity.
Section 3.03 Validity of Contemplated Transactions. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated hereby do not and will not (i) contravene any
provision of the Articles of Incorporation or Bylaws of the Buyer, (ii)
violate, be in conflict with, constitute a default under, result in the
termination of, cause the acceleration of any payments pursuant to, or
otherwise impair the good standing, validity, and effectiveness of any
agreement, contract, commitment, indenture, lease or mortgage applicable to
the Buyer, or (iii) violate any judgment, order, writ, prohibition, injunction
or decree of any court, governmental body or arbitrator by which the Buyer
is bound.
Section 3.04 Capitalization. The capitalization of Buyer consists of
1,000 shares of voting common stock, of which at Closing, all will be issued
and outstanding, and owned by Parent. All of the outstanding shares of
Buyer's common stock have been duly authorized and validly issued, and
are fully paid and non-assessable.
Section 3.05 No Business. Buyer has conducted no business and at the
Closing Date will have conducted no business and will have no liabilities or
obligations, except those relating to this
Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PARENT
The Parent represents and warrants to the Seller, its shareholders, and the
holders of the Zeosoft Notes, and where applicable, covenants with the Seller,
its shareholders, and the holders of the Zeosoft Notes as follows:
Section 4.01 Due Organization. Parent is a corporation duly organized,
validly existing and in good standing under the laws of Delaware and has all
necessary power and authority to conduct its business in the manner in which
its business is currently being conducted. Each subsidiary of Parent is a
corporation duly organized, validly existing and in good standing under the
laws of its place of incorporation and has all necessary power and authority
to conduct its business in the manner in which its business is currently
being conducted.
Section 4.02 Capitalization, Etc. The capitalization of Parent
consists of 50,000,000 shares of voting common stock, of which at Closing,
approximately 12,000,000 will be issued and outstanding and 5,000,000 shares
of preferred stock, of which none are issued and outstanding. The relative
rights and preferences of any of the preferred stock have not been established.
All of the outstanding shares of Parent's common stock have been duly
authorized and validly issued, and are fully paid and non-assessable, and none
of such shares is subject to any repurchase option or restriction on transfer,
except as provided in Schedule 4.02. All of such shares have been issued in
compliance with applicable securities laws. Except as provided in Schedule
4.02,there is no: (i) outstanding subscription, option, call, warrant or right
(whether or not currently exercisable) to acquire or otherwise relating to,
any shares of the capital stock or other securities of Parent; (ii)
outstanding security, instrument or obligation that is or may become
convertible into or exchangeable for any shares of the capital stock or other
securities of Parent; (iii) contract under which Parent is or may become
obligated to sell or otherwise issue any shares of its capital stock or any
other securities; or (iv) condition or circumstance that may give rise to or
provide a basis for the assertion of a claim by any Person to the effect that
such Person is entitled to acquire or receive any shares of capital stock or
other securities of Parent. Except as provided in Schedule 4.02, Parent has
never issued or granted any expired option, call, warrant or right to acquire
or otherwise relating to, any shares of its capital stock or other securities.
Each subsidiary of Parent is wholly-owned by Parent, and with respect to each
subsidiary, there is no: (i) outstanding subscription, option, call,warrant
or right (whether or not currently exercisable) to acquire or otherwise
relating to, any shares of the capital stock or other securities of the
subsidiary; (ii) outstanding security, instrument or obligation that is or
may become convertible into or exchangeable for any shares of the capital
stock or other securities of Parent or the subsidiary; (iii) contract under
which Parent or the subsidiary is or may become obligated to sell or otherwise
issue any shares of its capital stock or any other securities; or (iv)
condition or circumstance that may give rise to or provide a basis for the
assertion of a claim by any Person to the effect that such Person is entitled
to acquire or receive any shares of capital stock or other securities of
Parent or the subsidiary.
Section 4.03 Financial Statements. Parent has delivered to Seller the
following financial statements and notes (collectively, the "Parent Financial
Statements"): the audited consolidated balance sheet, income statement, and
statement of cash flows of Parent and its subsidiaries as of October 31, 2002,
and the unaudited consolidated balance sheet, income statement, and statement
of cash flows of Parent and its subsidiaries as of January 31, 2003. The
Parent Financial Statements are accurate and complete in all material respects
and present fairly the financial position of Parent as of the dates thereof
and the results of operations and cash flows of Parent for the periods covered
thereby. Except as disclosed on Schedule 4.03, there has been no material
adverse change in Parent's financial condition, business or properties since
the date of the most recent Parent Financial Statements. Except as disclosed
on Schedule 4.03 attached hereto, neither Parent nor any of its subsidiaries
are liable for or subject to any liabilities, except for those liabilities
reflected on the Parent Financial Statements and not heretofore paid or
discharged and those liabilities arising in the ordinary course of business
consistent with past practice under any contract, commitment or
agreement specifically disclosed on any Schedule to this Agreement.
Section 4.04 Tax Matters. Except as set forth on Schedule 4.04, all
Tax Returns required to be filed by or on behalf of Parent or any of its
subsidiaries with any Governmental Body with respect to any transaction
occurring or any taxable period ending on or before the Closing Date (the
"Parent Returns") (i) have been or will be filed when due, and (ii) have been,
or will be when filed, accurately and completely prepared in compliance with
all applicable Legal Requirements.
Section 4.05 Insurance. Parent and each of its subsidiaries has
maintained, and will maintain insurance coverage against liability, loss or
casualty with respect to its operations. A description of all such policies
is hereto attached as Schedule 4.05.
Section 4.06 Legal Proceedings. Except as set forth on Schedule 4.06,
there is no pending Legal Proceeding, and, to the best of the knowledge of
Parent, no Person has threatened to commence any Legal Proceeding: (i) that
involves Parent, any subsidiary of Parent, or any of the assets owned or used
by Parent or its subsidiaries and which, if decided against Parent or the
subsidiaries, would have a Material Adverse Effect on the financial condition,
business or properties of Parent or the subsidiary; or (ii) that challenges,
or that may have the effect of preventing, delaying, making illegal or
otherwise interfering with any of the transactions contemplated by this
Agreement.
Section 4.07 Assets. Parent and its subsidiaries have good, valid and
marketable title to all assets shown on the most recent Parent Financial
Statements, free and clear of any liens, except as disclosed on Schedule 4.07.
Neither Parent nor any of its subsidiaries has sold, transferred, assigned
or conveyed any of its right, title and interest, or granted or entered into
any option to purchase or acquire any of its right, title or interest, in and
to any of its assets or its business since the date of the most recent Parent
Financial Statements. Neither Parent nor any of its subsidiaries has purchased
or acquired a material amount of assets or a line of business or entered into
any agreement or option to purchase or acquire a material amount of assets or
a line of business since the date of the most recent Parent Financial
Statements. No third party has any option or right to acquire Parent's
business or any of its assets or those of any of its subsidiaries.
Section 4.08 Real Property. Neither Parent nor any of its
subsidiaries owns any real property. Schedule 4.08 includes a
complete list of the real property leased by Parent and its
subsidiaries ("Parent Leased Real Property"). Parent has a
valid leasehold interest in the Parent Leased Real Property.
Section 4.09 Compliance with Laws. To the best knowledge of Parent,
it and each of its subsidiaries has at all times conducted its business in
compliance with all applicable laws, regulations, ordinances and other
requirements of all Governmental Bodies (including applicable federal, state
and local laws, rules and regulations respecting occupational safety and
health standards). Parent has not received any notice, advice, claim or
complaint from any employee or Governmental Body that Parent or any subsidiary
has not conducted, or is not presently conducting, its business and operations
in accordance with all applicable laws and other requirements of Governmental
Bodies.
Section 4.10 Guarantees. Neither Parent nor any of its subsidiaries
has guaranteed or pledged any assets with respect to any obligation or
indebtedness of any Person or Entity.
Section 4.11 Authority; Binding Nature of Agreement. Parent has the
absolute and unrestricted right, power and authority to enter into and to
perform its obligations under this Agreement; the execution, delivery and
performance by Parent of this Agreement have been duly authorized by all
necessary action on the part of Parent and its board of directors; and the
approval of Parent's shareholders is not required. This Agreement constitutes
the legal, valid and binding obligation of Parent, enforceable against it in
accordance with its terms, subject to (i) laws of general application
relating to bankruptcy, insolvency and the relief of debtors, and (ii) rules
of law governing specific performance, injunctive relief and other equitable
remedies. At the Closing, Parent will deliver to Seller such evidence of
the authorization of its execution, delivery, and performance of this
Agreement as Seller may reasonably request.
Section 4.12 Non-Contravention. Neither (i) the execution delivery or
performance of this Agreement or any of the other agreements referred to in
this Agreement, nor (ii) the consummation of any of the transactions
contemplated by this Agreement, will directly or indirectly (with or without
notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i) the provisions
of the respective Articles of Incorporation or Bylaws of Parent, or (ii) any
resolution adopted by the shareholders or Board of Directors of Parent;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body or any Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or
obtain any relief under, any Legal Requirement or any order, writ,
injunction, judgment, or decree to which Parent or any of its subsidiaries,
or any of the assets owned or used by it or them, is subject; or
(c) contravene, conflict with or result in a violation of, or breach of, or
result in a default under, any provision of any Contract to which Parent or
any of its subsidiaries is a party, or give any Person the right to (i)
declare a default or exercise any remedy under any such Contract, (ii)
accelerate the maturity or performance of any such Contract, (iii) cancel,
terminate or modify any such Contract.
Parent is not and will not be required to make any filing with or give any
notice to, or to obtain any Consent from, any Person in connection with (x)
the execution, delivery or performance of this Agreement or any of the other
agreements referred to in this Agreement, or (y) the consummation of
any of the transactions contemplated by this Agreement.
Section 4.13 Environmental Matters.
(a) Parent and each of its subsidiaries has complied with and is in
compliance with all federal, state, local and foreign statutes (civil and
criminal), common laws, ordinances, regulations, rules, notices, permits,
judgments, orders and decrees applicable to it and its properties, assets,
operations and businesses relating to environmental protection (collectively
"Environmental Laws"), including without limitation Environmental Laws
relating to air, water, land and the generation, storage, use, handling,
transportation, treatment or disposal of hazardous wastes and hazardous
substances (as such terms are currently defined in any applicable
Environmental Law), except to the extent that noncompliance with any
Environmental Law, either singly or in the aggregate, does not and would
not have a Material Adverse Effect;
(b) Parent and each of its subsidiaries has obtained and adhered to all
necessary permits and other approvals necessary to treat, transport, store,
dispose of and otherwise handle hazardous wastes and hazardous substances and
has reported, to the extent required by all Environmental Laws, all past and
present sites owned and operated by Parent and each of its subsidiaries where
hazardous wastes or hazardous substances have been treated, stored, disposed of
or otherwise handled, except to the extent that a failure to do so, either
singly or in the aggregate, does not and would not have a Material Adverse
Effect;
(c) There have been no releases or threats of releases (as defined in
Environmental Laws) by Parent or any of its subsidiaries from, in or on any
property owned or operated by Parent or any of its subsidiaries except as
permitted by Environmental Laws or where such releases do not and would not
have a Material Adverse Effect; and
(d) Parent knows of no on-site or off-site location to which Parent or any
of its subsidiaries has transported or disposed of hazardous wastes and
hazardous substances or arranged for the transportation of hazardous wastes
and hazardous substances, which site is the subject of any federal, state,
local or foreign enforcement action or any other investigation which could
lead to any claim against Parent or any of its subsidiaries for any clean-up
cost, remedial work, damage to natural resources or personal injury,
including without limitation any claim under United States environmental
statutes, as amended.
Section 4.14 Significant Customers; Material Contracts and Commitments.
Schedule 4.14 hereto contains an accurate list of (i) all significant
customers of Parent or its subsidiaries (i.e. those customers representing
5% or more of Parent's consolidated revenues for the 12 months ending on the
date of the most recent Parent Financial Statements) and (ii) all material
contracts, commitments, and leases to which Parent or any of its
subsidiaries is a party or by which it or its properties are bound
(including without limitation contracts with significant customers,
joint venture or partnership agreements, contracts with any labor
organizations, loan agreements, indemnity or guaranty agreements, bonds,
mortgages, options to purchase land, liens, pledges or other security
agreements, and material employment contracts) (collectively, the "Parent
Material Contracts"). Except to the extent set forth on Schedule 4.14
hereto, (i) none of Parent's significant customers have canceled or
substantially reduced or, to the knowledge of Parent are currently
attempting or threatening to cancel or substantially reduce their purchases
of goods or services, (ii) Parent and its subsidiaries have complied with its
material commitments and obligations and are not in default under any of the
Parent Material Contracts and no notice of default has been received with
respect to any thereof and (iii) there are no Parent Material Contracts that
were not negotiated at arm's length with third parties not affiliated with
Parent or any officer, director or stockholder of Parent or its subsidiaries.
No employees of Parent or any of its subsidiaries are represented by any labor
union or covered by any collective bargaining agreement and, to the best of
Parent's knowledge, no campaign to establish such representation is in
progress. Parent considers its relationship with its employees to be good.
Section 4.15 Employee Benefit Plans. All employee benefit plans,
programs and policies (whether formal or informal, and whether maintained for
the benefit of a single individual or more than one individual) maintained or
contributed to by Parent or any of its subsidiaries for the benefit of any
current or former employee of Parent or its subsidiaries or in which such
employees are entitled to participate are listed in Schedule 4.15 (the "Parent
Benefit Plans"), and copies of all such written plans and policies, written
descriptions of all such oral plans and policies, and all other documentation
relating to such plans and policies have been delivered or made available to
Zeosoft. Except as disclosed on Schedule 4.15: (i) each Parent Benefit Plan
and the administration thereof complies, and has at all times complied, in
all material respects with the requirements of all applicable law; (ii) no
suit, action or other litigation (excluding claims for benefits incurred in
the ordinary course of plan activities) has been brought against or with
respect to any Parent Benefit Plan; and (iii) all required contributions to
Parent Benefit Plans have been made, and all benefits accrued under any
unfunded Parent Benefit Plan will have been paid, accrued or otherwise
adequately reserved in accordance with GAAP, and Parent and each of its
subsidiaries have performed all material obligations required to be performed
under the Parent Benefit Plans.
Section 4.16 Intellectual Property.
(a) Parent owns, free and clear of any Encumbrance, or has the valid right
to use all Intellectual Property (as defined below) used by it and its
subsidiaries in their respective businesses as currently conducted. Each
employee of Parent or any of its subsidiaries who created any of Parent's or
its subsidiaries' Intellectual Property and each independent contractor
engaged by Parent or any of its subsidiaries who created any of Parent's or
its subsidiaries' Intellectual Property has assigned to Parent or its
subsidiaries all of such employee's or contractor's right, title and interest
in such Intellectual Property. No other Person (other than licensors of
software that is generally commercially available, licensors of Intellectual
Property under the agreements disclosed pursuant to paragraph (c) below and
non-exclusive licensees of Parent's Intellectual Property in the ordinary
course of Parent's business) has any rights to any of the Intellectual
Property owned or used by Parent or its subsidiaries, and, to Parent's
knowledge, no other person or entity is infringing, violating or
misappropriating any of the Intellectual Property that Parent or any of its
subsidiaries owns or has an exclusive license to use. For purposes of this
Agreement, "Intellectual Property" means all (i) patents and patent
applications, (ii) copyrights, and registrations thereof, (iii) mask works
and registrations and applications for registration thereof, (iv) computer
software, data and documentation, (v) trade secrets and confidential business
information, whether patentable or unpatentable and whether or not reduced to
practice, know-how, manufacturing and production processes and techniques,
research and development information, copyrightable works, financial,
marketing and business data, pricing and cost information, business and
marketing plans and customer and supplier lists and information, (vi)
trademarks, service marks, trade names, domain names and applications and
registrations therefor and (vii) other proprietary rights relating to any of
the foregoing.
(b) None of the activities or business conducted by Parent and none of the
Intellectual Property owned or used by Parent or any of its subsidiaries (other
than "off-the-shelf" generally commercially available software) infringes,
violates or constitutes a misappropriation of (or in the past infringed,
violated or constituted a misappropriation of) any Intellectual Property of
any other person or entity. Parent has not received any written complaint,
claim or notice alleging any such infringement, violation or misappropriation.
(c) Except as set forth on Schedule 4.16, there are no agreements with any
Person pursuant to which Parent obtains rights to Intellectual Property
material to the business of Parent or any of its subsidiaries (other than
software that is generally commercially available) that is owned by a party
other than Parent. Other than license fees for software that is generally
commercially available, Parent is not obligated to pay any royalties or other
compensation to any third party in respect of its ownership, use or license
of any of its Intellectual Property.(d) Parent has taken reasonable
precautions (i) to protect its rights in its and its subsidiaries'
Intellectual Property and (ii) to maintain the confidentiality of its and its
subsidiaries' trade secrets, know-how and other confidential Intellectual
Property, and to Parent's knowledge, there have been no acts or omissions by
the officers, directors, employees and agents of Parent or its subsidiaries,
the result of which would be to materially compromise the rights of Parent
or its subsidiaries to apply for or enforce appropriate legal protection of
Parent's or its subsidiaries' Intellectual Property.
Section 4.17 Software Licenses. Parent has all necessary licenses to
use all material third-party software used in Parent's business, and Parent's
use of third-party software does not infringe the rights of any Person.
Section 4.18 Full Disclosure. This Agreement, and all documents
delivered by Parent to Seller in connection with the transactions contemplated
herein, do not (i) contain any representation, warranty or information that
is false or misleading with respect to any material fact, or (ii) omit to
state any material fact necessary in order to make the representations,
warranties and information contained and to be contained herein and therein
not false or misleading.
Section 4.19 Valid Issuance. The Parent common stock to be issued and
delivered pursuant to the transactions contemplated herein will, when issued
in accordance with the provisions of this Agreement, be validly issued, fully
paid and nonassessable. Parent intends to issue the Parent common stock and
Buyer intends to deliver the Parent common stock in reliance on exemptions
from registration and qualification under various federal and state securities
laws. In the event such exemptions are determined not to be available, Parent
will make a good-faith effort to cure any noncompliance by undertaking to
register or qualify the Parent common stock issued hereunder by filing a
registration statement that includes the Parent common stock on or before
December 31, 2003.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants, to and for the benefit of Buyer and Parent
as follows as of the date hereof and as of the Closing Date:
Section 5.01 Due Organization. Seller is a corporation duly organized,
validly existing and in good standing under the laws of the State of Florida
and has all necessary power and authority to conduct its business in the
manner in which its business is currently being conducted.
Section 5.02 Financial Statements. Seller has delivered to Parent
the following financial statements and notes (collectively, the "Seller
Financial Statements"): the unaudited balance sheets, income statements,
and statements of cash flows and shareholders' equity of Seller as of December
31, 2001 and 2002, and February 28, 2003. The Seller Financial Statements
are accurate and complete in all material respects and present fairly the
financial position of Seller as of the dates thereof and the results of
operations and cash flows of Seller for the period covered thereby. Except
as disclosed on Schedule 5.02, there has been no material adverse change in
Seller's financial condition, business or properties since the date of the
most recent Seller Financial Statements. Except as reflected on the Seller
Financial Statements or otherwise disclosed on the Schedules attached hereto,
Seller is not liable for or subject to any liabilities not heretofore paid or
discharged and those liabilities arising in the ordinary course of its
business consistent with past practice.
Section 5.03 Tax Matters. Except as set forth on Schedule 5.03, all
Tax Returns required to be filed by or on behalf of Seller with any
Governmental Body with respect to any transaction occurring or any taxable
period ending on or before the Closing Date (the "Seller Returns") (i) have
been timely filed or are not yet due, and (ii) have been accurately and
completely prepared in compliance with all applicable Legal Requirements.
Section 5.04 Insurance. Seller has maintained, and will maintain
through the Closing Date, insurance coverage against liability, loss or
casualty with respect to the operations of Seller. A description of all such
policies is hereto attached as Schedule 5.04.Section 5.05 Legal Proceedings.
Except as set forth on Schedule 5.05, there is no pending Legal Proceeding,
and, to the best of the knowledge of Seller, no Person has threatened to
commence any Legal Proceeding: (i) that involves Seller or any of the assets
owned or used by Seller and which, if decided against Seller, would have a
Material Adverse Effect on the financial condition, business or properties
of Seller; or (ii) that challenges, or that may have the effect of preventing,
delaying, making illegal or otherwise interfering with any of the
transactions contemplated by this Agreement.
Section 5.06 Assets. Seller has, and will have at the Closing, good,
valid and marketable title to all of the Purchased Assets, free and clear of
any liens, except as disclosed on Schedule 5.06. Seller has not sold,
transferred, assigned or conveyed any of its right, title and interest, or
granted or entered into any option to purchase or acquire any of its right,
title or interest, in and to any of the Purchased Assets or its business.
No third party has any option or right to acquire Seller's business or any
of the Purchased Assets.
Section 5.07 Real Property. Seller owns no real property. Schedule 5.07
includes a complete list of the real property leased by Seller ("Seller Leased
Real Property"). Seller has a valid leasehold interest in the Seller Leased
Real Property and will deliver to Buyer at Closing a certificate
confirming that such leases are in full force and effect.
Section 5.08 Compliance with Laws. To the best knowledge of Seller,
it has at all time conducted its business in compliance with all applicable
laws, regulations, ordinances and other requirements of all Governmental
Bodies (including applicable federal, state and local laws, rules and
regulations respecting occupational safety and health standards). Seller
has not received any notice, advice, claim or complaint from any employee
or Governmental Body that Seller has not conducted, or is not presently
conducting, its business and operations in accordance with all applicable
laws and other requirements of Governmental Bodies.
Section 5.09 Guarantees. Except as for the blanket lien on its assets
in favor of the holders of the Zeosoft Notes, Seller has not guaranteed or
pledged any assets with respect to any obligation or indebtedness of any
Person or Entity.
Section 5.10 Authority; Binding Nature of Agreement. Subject only to
the approval of its shareholders, Seller has the absolute and unrestricted
right, power and authority to enter into and to perform its obligations under
this Agreement; and the execution, delivery and performance by Seller of this
Agreement has been duly authorized by all necessary action on the part of
Seller and its board of directors. Subject to the approval of Seller's
shareholders, this Agreement constitutes the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms,
subject to (i) laws of general application relating to bankruptcy, insolvency
and the relief of debtors, and (ii) rules of law governing specific
performance, injunctive relief and other equitable remedies. At the Closing,
Seller will deliver to Buyer such evidence of the authorization of Seller's
execution, delivery, and performance of this Agreement as Buyer may
reasonably request.
Section 5.11 Non-Contravention. Neither (i) the execution, delivery
or performance of this Agreement or any of the other agreements referred to
in this Agreement, nor (ii) the consummation of any of the transactions
contemplated by this Agreement, will directly or indirectly (with or without
notice or lapse of time):
(a) contravene, conflict with or result in a violation of (i) any of the
provisions of Seller's articles of incorporation or bylaws, or (ii) any
resolution adopted by Seller's shareholders or Board of Directors;
(b) contravene, conflict with or result in a violation of, or give any
Governmental Body or other Person the right to challenge any of the
transactions contemplated by this Agreement or to exercise any remedy or
obtain any relief under, any Legal Requirement or any order, writ,injunction,
judgment or decree to which Seller, or any of the Purchased Assets is subject;
or
(c) contravene, conflict with or result in a violation or breach of, or
result in a default under, any provision of any Seller Contract, or give any
Person the right to (i) declare a default or exercise any remedy under any
Seller Contract, (ii) accelerate the maturity or performance of any Seller
Contract, or (iii) cancel, terminate or modify any Seller Contract.
Except for the required shareholder approval, Seller is not and will not be
required to make any filing with or given any notice to, or to obtain any
Consent from, any Person in connection with (x) the execution, delivery or
performance of this Agreement or any of the other agreements referred to in
this Agreement, or (y) the consummation of any of the transactions
contemplated by this Agreement, except to the extent the consent of third
parties may be required in connection with the assignment of the Purchased
Assets and the Assumed Obligations.
Section 5.12 Environmental Matters.
(a) Seller has complied with and is in compliance with all Environmental
Laws, including without limitation Environmental Laws relating to air, water,
land and the generation, storage, use, handling, transportation, treatment
or disposal of hazardous wastes and hazardous substances (as such terms are
currently defined in any applicable Environmental Law), except to the extent
that noncompliance with any Environmental Law, either singly or in the
aggregate, does not and would not have a Material Adverse Effect;
(b) Seller has obtained and adhered to all necessary permits and other
approvals necessary to treat, transport, store, dispose of and otherwise
handle hazardous wastes and hazardous substances and has reported, to the
extent required by all Environmental Laws, all past and present sites owned
and operated by Seller where hazardous wastes or hazardous substances have
been treated, stored, disposed of or otherwise handled, except to the extent
that a failure to do so, either singly or in the aggregate, does not and
would not have a Material Adverse Effect;
(c) There have been no releases or threats of releases (as defined in
Environmental Laws) by Seller at, from, in or on any property owned or
operated by Seller except as
permitted by Environmental Laws or where such releases do not and would not
have a Material Adverse Effect; and
(d) Seller knows of no on-site or off-site location to which Seller has
transported or disposed of hazardous wastes and hazardous substances or
arranged for the transportation of hazardous wastes and hazardous substances,
which site is the subject of any federal, state, local or foreign enforcement
action or any other investigation which could lead to any claim against Seller
for any clean-up cost, remedial work, damage to natural resources or personal
injury, including without limitation any claim under United States
environmental statutes, as amended.
Section 5.13 Significant Customers; Material Contracts and Commitments.
Schedule 5.13 hereto contains an accurate list of all material contracts,
commitments, leases, instruments, agreements, licenses or permits to which
Seller is a party or by which it or its properties are bound (including
without limitation contracts with significant customers, joint venture or
partnership agreements, contracts with any labor organizations, loan
agreements, indemnity or guaranty agreements, bonds, mortgages, options to
purchase land, liens, pledges or other security agreements, employment
contracts, and employee benefit plans) (collectively, the "Seller Material
Contracts"). Except to the extent set forth on Schedule 5.13 hereto, (i)
Seller has complied with its material commitments and obligations and is not
in default under any of the Seller Material Contracts and no notice of
default has been received with respect to any thereof and (ii) there are no
Seller Material Contracts that were not negotiated at arm's length with
third parties not affiliated with Seller or any officer, director or
stockholder of Seller. Seller is not bound by or subject to (and none of its
respective assets or properties is bound by or subject to) any arrangement
with any labor union. No employees of Seller are represented by any labor
union or covered by any collective bargaining agreement and, to the best of
Seller's knowledge, no campaign to establish such representation is in
progress. Seller considers its relationship with its employees to be good.
Section 5.14 Intellectual Property.
(a) Except for the lien securing payment to the holders of the Zeosoft
Notes, Seller owns, free and clear of any Encumbrance, or has the valid right
to use all Intellectual Property (as defined in Section 4.16) used by it in
its business as currently conducted. Each employee of Seller who created any
of Seller's Intellectual Property and each independent contractor engaged by
Seller who created any of Seller 's Intellectual Property has assigned to
Seller all of such employee's or contractor's right, title and interest in
such Intellectual Property. No other Person (other than licensors of software
that is generally commercially available, licensors of Intellectual Property
under the agreements disclosed pursuant to paragraph (c) below and
non-exclusive licensees of Seller's Intellectual Property in the ordinary
course of Seller's business) has any rights to any of the
Intellectual Property owned or used by Seller, and, to Seller's knowledge, no
other Person or Entity is infringing, violating or misappropriating any of
the Intellectual Property that Seller owns or has an exclusive license to use.
(b) None of the activities or business conducted by Seller and none of the
Intellectual Property owned or used by Seller (other than "off-the-shelf"
generally commercially available software) infringes, violates or constitutes
a misappropriation of (or in the past infringed, violated or constituted a
misappropriation of) any Intellectual Property of any other person or entity.
Seller has not received any written complaint, claim or notice alleging any
such infringement, violation or misappropriation.
(c) Except as set forth on Schedule 5.14, Seller has no agreements with
any Person pursuant to which Seller obtains rights to Intellectual Property
material to the business of Seller (other than software that is generally
commercially available) that is owned by a Person other than Seller. Other
than license fees for software that is generally commercially available,
Seller is not obligated to pay any royalties or other compensation to any
third party in respect of its ownership, use or license of any of its
Intellectual Property.(d) Seller has taken reasonable precautions (i)
to protect its rights in its Intellectual Property and (ii) to maintain the
confidentiality of its trade secrets, know-how and other confidential
Intellectual Property, and to Seller's knowledge, there have been no acts
or omissions by the officers, directors, employees and agents of Seller, the
result of which would be to materially compromise the rights of Seller to
apply for or enforce appropriate legal protection of Seller's Intellectual
Property.
Section 5.15 Software Licenses. Seller has all necessary licenses to use
all material third-party software used in Seller's business, and Seller's
use of third-party software does not infringe the rights of any Person.
Section 5.16 Full Disclosure. This Agreement, and all documents
delivered by Seller to Buyer and Parent in connection with the transactions
contemplated herein, do not (i) contain any representation, warranty or
information that is false or misleading with respect to any material fact, or
(ii) omit to state any material fact necessary in order to make the
representations, warranties and information contained and to be contained
herein and therein not false or misleading. Parent and Buyer have completed
their due diligence investigation of Seller.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER AND PARENT.
The obligations of Buyer and Parent to consummate the transactions
contemplated by this Agreement are subject to the satisfaction, at or
prior to the Closing, of each of the following conditions:
Section 6.01 Accuracy of Representations. Each of the representations
and warranties made by Seller in this Agreement and in each of the other
agreements and instruments delivered to Buyer and Parent in connection with
the transactions contemplated by this Agreement shall have been accurate in
all respects as of the date of this Agreement, and shall be accurate in all
respects as of the Closing Date as if made on the Closing Date.
Section 6.02 Performance of Covenants. Each covenant or obligation that
Seller is required to comply with or to perform at or prior to the Closing
shall have been complied with and performed in all respects.
Section 6.03 Consents. All Consents required to be obtained in
connection with the transactions contemplated by this Agreement shall have
been obtained and shall be in full force and effect.
Section 6.04 Agreements and Documents. Buyer shall have received a
certificate executed by Seller containing the representation and warranty
of Seller that each of the representations and warranties set forth in Article
V is accurate in all material respects as of the Closing Date as if made on
the Closing Date and that the conditions set forth in Article VI have been
duly satisfied.
Section 6.05 Additional Loans. Within five (5) days after the Closing,
Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx shall fund such sum into Seller as may be
necessary for Seller to have a balance of $250,000 in its bank accounts,
which sum will be transferred to Buyer pursuant to Section 1.01(c), and
Xxxxxx Xxxxxxxx and Xxxxx Xxxxxxxx shall make commitments to fund such other
sums as Seller deems appropriate to enable Seller to complete its liquidation
and winding up. Zeosoft shall issue additional Zeosoft Notes to evidence
these obligations. Provided this condition is met, the holders of the
Zeosoft Notes issued pursuant to this Section 6.05 shall, at the Closing,
exchange such Zeosoft Notes for the consideration provided in Section 2.02(h)
hereof.
Section 6.06 No Change of Control. On the Closing date, Parent shall
have a number of shares of common stock issued and outstanding at least equal
to the total number of shares of Parent common stock to be issued hereunder,
plus one (1). If Parent has not met this condition on the Closing Date,
Seller's Board of Directors may elect to (i) defer the Closing until this
condition is met or (ii) proceed to Closing; provided, however that if
Seller's Board of Directors elects to proceed to Closing, it will cause
proxies for certain of the shares of Parent common stock to be issued
hereunder to be granted to Parent's designee. The number of proxied shares
will be equal to one (1), plus the excess of (a) the Parent shares to be
issued hereunder, over (b) the number of Parent shares issued and outstanding
on the day prior to the Closing Date. Following the Closing, Parent will
release the shares of Parent common stock from the proxies from time to time
as Parent issues shares. Parent will notify Seller each time Parent issues
stock, and upon each such issuance, Parent will release from the proxies a
number of shares of Parent common stock equal to the number of shares issued
by Parent. All proxies will terminate when Parent has outstanding twice the
number of shares to be issued hereunder plus one.
ARTICLE VII
CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER
The obligations of Seller to consummate the transactions contemplated by this
Agreement are subject to the satisfaction, at or prior to the Closing, of the
following conditions:
Section 7.01 Accuracy of Representations. Each of the representations
and warranties made by Buyer and Parent in this Agreement and in each of the
other agreements and instruments delivered to Seller in connection with the
transactions contemplated by this Agreement shall have been accurate in all
respects as of the date of this Agreement, and shall be accurate in all
respects as of the Closing Date as if made on the Closing Date.
Section 7.02 Performance of Covenants. All of the covenants and
obligations that Buyer or Parent is required to comply with or to perform at
or prior to the Closing shall have been complied with and performed in all
respects.
Section 7.03 Consents. All Consents required to be obtained in
connection with the transactions contemplated by this Agreement shall have
been obtained and shall be in full force and effect.
Section 7.04 Agreements and Documents. Seller shall have received a
certificate executed by each of Buyer and Parent, and containing the
representation and warranty of each that each of the representations and
warranties set forth in Articles III and IV are accurate in all material
respects as of the Closing Date as if made on the Closing Date and that the
conditions set forth in Article VII
have been duly satisfied.
ARTICLE VIII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION
Section 8.01 Survival of Representations and Warranties. All of the
representations and warranties of Buyer, Parent and Seller contained in this
Agreement shall survive the Closing and shall continue for a period of one
year following the Closing Date.
Section 8.02 Seller Indemnity. Subject to the provisions of Section 8.04
hereof, Seller shall defend, indemnify and hold harmless Buyer and Parent
(and their respective directors, officers, employees, agents, affiliates,
successors and assigns) from and against any and all demands, claims, payments,
defenses, obligations, recoveries, deficiencies, fines, penalties, interest,
assessments, actions, liens, causes of action, suits, proceedings, judgments,
losses, damages (including without limitation punitive, exemplary or
consequential damages, lost income and profits, interruptions of business and
diminution in the value of stock), liabilities, costs, and expenses of any kind
(including
without limitation (i) interest, penalties and reasonable attorneys' fees and
expenses, (ii) attorneys' fees and expenses necessary to enforce their rights
to indemnification hereunder, and (iii) consultants' fees and other costs of
defending or investigating any claim hereunder), whether accrued, absolute,
contingent, known, unknown, or otherwise as of the Closing Date or thereafter
asserted against, imposed upon or incurred by Buyer or its directors, officers,
employees, agents, affiliates, successors or assigns by reason of, resulting
from, arising out of, based upon, awarded or asserted against or otherwise in
respect of:
(a) any period or periods of Seller ending prior to the Closing and which
involve any claims against Buyer, Parent, Seller, or their respective
properties or assets, relating to actions or inactions of Seller or its
officers, directors, shareholder, employees or agents prior to Closing, or
the operation of the business of Seller prior to the Closing unless such
liability relates to an Assumed Obligation;
(b) any breach of any representation and warranty contained in this
Agreement or any misrepresentation in or omission on the part of Seller
contained in any certificate furnished or to be furnished to Buyer by Seller
pursuant to this Agreement; and
(c) any claim by a broker, agent, or finder alleged to be employed by,
representing, or otherwise involved with Seller in connection with this
Agreement, except for the seven percent (7%) commission to be paid to F.M.
Investments or its assigns, pursuant to the authorization of Seller's Board
of Directors, which shall be paid from the consideration described in
Section 1.04.
The remedy and right of recovery for any indemnity claim covered hereby
shall be limited to the recovery by Buyer of the consideration paid hereunder.
The indemnity herein contained shall expire one year following the Closing;
provided, however, that if an indemnity claim is asserted prior to such
expiration date, but is contested or otherwise not resolved at such expiration
date, this indemnity shall expire with respect to such claim only upon
resolution of the claim.
Section 8.03 Indemnity Agreement of Parent and Buyer. Buyer and
Parent, jointly and severally, shall indemnify and hold harmless Seller and
its shareholders and the holders of Zeosoft Notes, and the officers and
directors of Seller (and their successors and assigns) from and against any
and all direct or indirect requests, demands, claims, payments, defenses,
obligations, recoveries, deficiencies, fines, penalties, interest,
assessments, actions, liens, causes of action, suits, proceedings, judgments,
losses, damages (including without limitation punitive, exemplary or
consequential damages and lost income and profits and interruptions of
business), liabilities, costs, and expenses of any kind (including without
limitation (i) interest, penalties and reasonable attorneys' fees and
expenses, (ii) attorneys' fees and expenses necessary to enforce their rights
to indemnification hereunder, and (iii) consultants' fees and other costs of
defending or investigating any claim
hereunder) whether accrued, absolute, contingent, known, unknown or otherwise
as of the Closing Date or thereafter asserted against, imposed upon or
incurred by Seller or a shareholder, noteholder, officer, or director of
Seller or its respective representatives or assigns, by reason of, resulting
from, arising out of, based upon, awarded or asserted against in respect of or
otherwise in respect of:
(a) any breach of any representation and warranty contained in this
Agreement, or any misrepresentation in or omission from any certificate
furnished or to be furnished to Seller by Parent or Buyer pursuant to this
Agreement;
(b) any failure to pay or perform any of the Assumed Obligations; and
(c) any claim by a broker, agent, or finder alleged to be employed by,
representing, or otherwise involved with Parent or Buyer in connection with
this Agreement.
Section 8.04 Indemnification Procedure.
(a) Upon obtaining knowledge thereof, the party to be indemnified hereunder
(the "Indemnitee") shall promptly notify the indemnifying party hereunder (the
"Indemnitor") in writing of any damage, claim, loss, liability or expense or
other matter which the Indemnitee has determined has given or could give rise
to a claim for which indemnification rights are granted hereunder (such
written notice referred to as the "Notice of Claim"). The Notice of Claim
shall specify, in all reasonable detail, the nature and estimated amount of
any such claim giving rise to a right of indemnification, to the extent the
same can reasonably be estimated. Any failure on the part of an Indemnitee
to give timely notice to the Indemnitor of a claim shall not affect the right
of the Indemnitee to obtain indemnification from the Indemnitor with respect
to such claim unless the Indemnitor is materially and adversely affected
thereby.
(b) With respect to any matter set forth in a Notice of Claim relating to a
third-party claim, the Indemnitor shall have the absolute right to defend, in
good faith and at its expense, any such claim or demand, and the Indemnitee,
at its expense, shall have the right to participate in the defense of any such
third party claim. So long as Indemnitor is defending, in good faith, any
such third party claim, the Indemnitee shall not settle or compromise such
third party claim. The Indemnitee shall make available to the Indemnitor or
its representatives all records and other materials reasonably required by
them for use in contesting any third party claim and shall cooperate fully
with the Indemnitor in the defense of all such claims. If the Indemnitor
does not defend any such third-party claim or if the Indemnitor does not
provide the Indemnitee with prompt and reasonable assurances that the
Indemnitor will satisfy the third party claim, the Indemnitee may, at its
option, elect to defend any such third party claim at the Indemnitor's expense.
An Indemnitor may not settle or compromise any claim without obtaining a full
and unconditional release of the Indemnitee, unless the Indemnitee consents
in writing to such settlement or compromise.
(c) Mitigation of Damages. The party entitled to indemnification shall take
all reasonable steps to mitigate all indemnifiable liabilities and damages
upon and after becoming aware of any event that could reasonably be expected
to give rise to any liabilities and damages that are indemnifiable hereunder.
ARTICLE IX
CONDUCT OF THE PARTIES AFTER CLOSING
Section 9.01 Cooperation. The Buyer and the Seller will cooperate upon
and after the Closing Date in effecting the orderly transfer of the Purchased
Assets to the Buyer. Without limiting the generality of the foregoing, the
Seller, at the request of the Buyer without additional consideration, will
execute and deliver from time to time such further instruments of assignment,
conveyance and transfer, will sign any documents necessary or useful to ensure
that all of the right, title and interest in and to the Purchased Assets vests
in the Buyer, will cooperate in the conduct of litigation and the processing
and collection of insurance claims, and will take such other actions as may
reasonably be required to convey and deliver to the Buyer more effective title
to the Purchased Assets, or to confirm and perfect the Buyer's title thereto,
as contemplated by this Agreement.
Section 9.02 Access to Books and Records. As long as the Buyer retains
any books and records of Seller's business acquired by the Buyer hereunder, it
will provide the Seller with reasonable access during customary business hours
to such books and records and as long as the Seller retains the books and
records of the Seller's business retained by the Seller hereunder, it will
provide the Buyer with reasonable access during customary business hours to
such books and records. Prior to the disposal of any such books and records
by any party hereto, such party shall provide 60 days' prior written notice
to the other party and shall relinquish possession of such books and records
to such other party upon receipt of a written request therefor within the
60-day time period.
Section 9.03 Use of Name. The Seller shall discontinue the use of the
name "Zeosoft," or any derivation thereof effective upon the Closing Date.
Promptly after the Closing Date, the Seller shall change its corporate name
to a name other than "Zeosoft Corporation" or any derivation thereof.
Section 9.04 Repayment of Obligations. The Seller agrees to pay all of
the Seller's liabilities and obligations (other than the Assumed Obligations)
by either: (a) paying such liabilities and obligations in full as they come
due, (b) entering into arrangements acceptable to the obligees of such
liabilities and obligations for the repayment of such liabilities and
obligations, or (c) reserving sufficient assets (in Seller's business
judgment) to pay contingent or disputed claims. The Seller agrees that, so
long as any of the Seller's liabilities and obligations (other than the Assumed
Obligations) existing on the Closing Date or arising thereafter remain unpaid,
the Seller will not make any dividend or distribution with respect to the
Seller's capital stock from any reserved assets, but Seller will otherwise
make such distributions as are appropriate to comply with its Plan of
Liquidation and Dissolution.
Section 9.05 Incentive Compensation. As soon after Closing as possible,
Parent will allocate options to purchase shares of Parent common stock for
incentive programs for employees of Seller that are hired by Buyer, and will
replace their Zeosoft Options with a like amount of options under the Parent's
Employee Stock Ownership Plan. The exercise price of the Parent stock options
will be adjusted to the closing market price of Parent's common stock on the
date of Closing. Parent will modify its Employee Stock Option Plan as needed
to provide the Seller's employees the same vesting schedule as under the
Zeosoft Stock Option Plan, and will provide them with service credit for
their respective periods of service to Seller.
ARTICLE X
MISCELLANEOUS
Section 10.01 144 Legend. To the extent required by law, the securities
of Buyer and Parent to be issued hereunder shall be characterized as
"restricted securities" for purposes of Rule 144 under the Securities Act,
and each certificate representing any of such shares shall bear a legend
identical or similar in effect to the following legend (together with any
other legend or legends required by applicable state securities laws or
otherwise):
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT") AND MAY NOT BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED, ASSIGNED, PLEDGED
OR HYPOTHECATED UNLESS AND UNTIL REGISTERED UNDER THE ACT
OR UNLESS THE COMPANY HAS RECEIVED AN OPINION OF COUNSEL
SATISFACTORY TO THE COMPANY AND ITS COUNSEL THAT SUCH
REGISTRATION IS NOT REQUIRED.
To the extent permitted by law, Parent will permit the shareholders of Seller
to tack the Rule 144 holding period on to the shares of Parent common stock to
be issued and delivered hereunder.
Section 10.02 Further Assurances. Each party hereto shall execute and
cause to be delivered to each other party hereto such instruments and other
documents, and shall take such other actions, as such other party may
reasonably request (prior to, at, or after the Closing) for the purpose of
carrying out or evidencing any of the transactions contemplated by this
Agreement.
Section 10.03 Fees and Expenses. All fees, costs and expenses (including
legal fees and accounting fees) that have been incurred or that are incurred
in the future by any party in connection with the transactions contemplated
by this Agreement, including all fees, costs and expenses incurred by such
party in connection with or by virtue of (a) any investigation and review
conducted by such party of the other party's business (and the furnishing of
information in connection with such investigation and review), (b) the
negotiation, preparation and review of this Agreement and all agreements,
certificates, opinions and other instruments and documents delivered or to be
delivered in connection with the transactions contemplated by this Agreement,
(c) the preparation and submission of any filing or notice required to be
made or given in connection with any of the transactions contemplated by this
Agreement, and the obtaining of any Consent required to be obtained in
connection with any of such transactions, and (d) the consummation of the
transactions contemplated hereby shall be paid: (i) by Parent, if incurred
by Parent or Buyer; and (ii) by Seller, if incurred by Seller.
Section 10.04 Attorneys' Fees. If any action or proceeding relating to
this Agreement or the enforcement of any provision of this Agreement is
brought against any party hereto, the prevailing party shall be entitled to
recover reasonable attorneys' fees, costs and disbursements (in addition to
any other relief to which the prevailing party may be entitled).
Section 10.05 Notices. Any notice or other communication required or
permitted to be delivered to any party under this Agreement shall be in
writing and shall be deemed properly delivered, given and received when
delivered (by hand, by registered mail, by courier or express delivery service
or by facsimile) to the address or facsimile telephone number set forth
beneath the name of such party below (or to such other address or facsimile
telephone number as such party shall have specified in a written notice given
to the other parties hereto):
if to Buyer or Parent:
Neometrix Technology Group, Inc.
00000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxx, Esq.
New Venture Attorneys
00000 Xxxxxxx Xxx
Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
if to Seller:
Zeosoft Corporation
0000 Xxx Xxxx Xxxxxxxxxx Xxxx.
Xxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxxx, Esq.
0000 Xxx Xxxx Xxxxxxxxxx Xxxx.
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Section 10.06 Severability. In the event that any provision of this
Agreement, or the application of any such provision to any Person or set of
circumstances, shall be determined to be invalid, unlawful, void or
unenforceable to any extent, the remainder of this Agreement, and the
application of such provision to Persons or circumstances other than those
as to which it is determined to be invalid, unlawful, void or unenforceable,
shall not be impaired or otherwise affected and shall continue to be valid
and enforceable to the fullest extent permitted by law.
Section 10.07 Headings. The Section headings contained in this Agreement
are for convenience of reference only, shall not be deemed to be a part of
this Agreement and shall not be referred to in connection with the
construction or interpretation of this Agreement.
Section 10.08 Counterparts. This Agreement may be executed in several
counterparts, each of which shall constitute an original and all of which,
when taken together, shall constitute one agreement.
Section 10.09 Governing Law; Venue.
(a) This Agreement shall be construed in accordance with, and governed in
all respects by, the internal laws of the State of Florida (without giving
effect to principles of conflicts of laws).
(b) Any legal action or other legal proceeding relating to this Agreement
or the enforcement of any provision of this Agreement shall be brought in or
otherwise commenced in any state or federal court located in Hillsborough
County, Florida. Each party to this Agreement:
(i) expressly and irrevocably consents and submits to the jurisdiction of
each state and federal court located in Hillsborough County, Florida in
connection with any such legal proceeding;
(ii) agrees that each state and federal court located in Hillsborough
County, Florida shall be deemed to be a convenient forum; and
(iii) agrees not to assert (by way of motion, as a defense or otherwise), in
any such legal proceeding commenced in any state or federal court located in
Hillsborough County, Florida, any claim that such party is not subject
personally to the jurisdiction of such court, that such legal proceeding has
been brought in an inconvenient forum, that the venue of such proceeding is
improper or that this Agreement or the subject matter of this
Agreement may not be enforced in or by such court.
Section 10.10 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement may not be assigned by any party.
Seller's shareholders and the holders of Zeosoft Notes are intended third-
party beneficiaries hereof, but there are no other intended third-party
beneficiaries hereof.
Section 10.11 Remedies Cumulative; Specific Performance. The rights and
remedies of the parties hereto shall be cumulative (and not alternative).
The parties to this Agreement agree that, in the event of any breach or
threatened breach by any party to this Agreement of any covenant, obligation
or other provision set forth in this Agreement for the benefit of any other
party to this Agreement, such other party shall be entitled (in addition to
any other remedy that may be available to it) to (a) a decree or order of
specific performance or mandamus to enforce the observance and performance
of such covenant, obligation or other provision, and (b) an injunction
restraining such breach or threatened breach.
Section 10.12 Waiver.
(a) No failure on the part of any party to exercise any power, right,
privilege or remedy under this Agreement, and no delay on the part of any
party in exercising any power, right, privilege or remedy under this
Agreement, shall operate as a waiver of such power, right, privilege or
remedy; and no single or partial exercise of any such power, right, privilege
or remedy shall preclude any other or further exercise thereof or of any
other power, right, privilege or remedy.
(b) No party shall be deemed to have waived any claim arising out of this
Agreement, or any power, right, privilege or remedy under this Agreement,
unless the waiver of such claim, power, right, privilege or remedy is
expressly set forth in a written instrument duly executed and delivered on
behalf of such party; and any such waiver shall not be applicable or have
any effect except in the specific instance in which it is given.
Section 10.13 Amendments. This Agreement may not be amended, modified,
altered or supplemented other than by means of a written instrument duly
executed and delivered on behalf of all of the parties hereto.
Section 10.14 Entire Agreement. This Agreement and the attached Exhibits
and Schedules sets forth the entire understanding of the parties hereto
relating to the subject matter hereof and thereof and supersedes all prior
agreements and understandings among or between any of the parties relating
to the subject matter hereof.
Section 10.15 Board Appointment. Parent will appoint Xxxxx Xxxxxxxx to
its Board of Directors at the first meeting of the Board following Closing,
and he shall serve until at least December 2003, or, if later, the next
meeting of shareholders at which directors are elected.
Section 10.16 Share Combination. As of the date hereof, Parent has
notified Seller that it intends to undertake a combination, or reverse split,
of its outstanding shares, combining seven shares into one share, and to have
Neometrix Corporation merge into it. The parties have calculated the
consideration for the transactions contemplated herein based on and following
the effects of the share combination and merger. If the record date of the
share combination and merger does not precede the Closing, the number of
shares of Parent common stock provided as consideration hereunder shall be
multiplied by seven to give effect to the share combination and merger.
Section 10.17 Public Trading of Buyer Stock. In the event Buyer
undertakes an initial public offering of its own securities, Buyer will,
prior to such public offering, deliver and distribute to the Seller's
shareholders and the Zeosoft Noteholders rights to purchase the securities
to be offered in the initial public offering. The terms of the rights
offering shall be as follows:
(a) Buyer will grant the holders of Seller's shares and the Zeosoft Notes
rights to purchase nine and one-half percent (9.5%) of Buyer's common stock
(calculated immediately following the initial public offering). Such
purchase rights will be divided pro rata among them, based on the number
of shares of Parent common stock they each receive (i) as consideration
hereunder (in the case of the holders of Zeosoft Notes) or (ii) from Seller
upon completion of Seller's Plan of Liquidation and Dissolution.
(b) All purchase rights will carry a nominal purchase price.
(c) Shares issued pursuant to the exercise of the foregoing purchase rights
will be treated as "restricted securities" as that term is defined in Rule 144
of the Securities and Exchange Commission.
(d) The stock purchase rights granted in this Section 10.17 do not attach
to any of the shares of Parent common stock issued hereunder, and are
personal to each holder of Seller's shares and Zeosoft Notes. The stock
purchase rights granted in this Section 10.17 may be transferred to a donee,
legatee, or other recipient by operation of law of a holder's Parent stock,
but may not otherwise be transferred to any subsequent holder of the shares
of Parent common stock issued hereunder, and may never be transferred
separate and apart from the shares of Parent stock issued hereunder.
Nothing contained in this Section 10.17 shall be deemed to preclude any
recipient of Parent common stock from receiving dividend shares or
participating in other dividends or distributions to shareholders from Parent.
Section 10.18 Construction.
(a) For purposes of this Agreement, whenever the context requires: the
singular number shall include the plural, and vice versa; the masculine
gender shall include the feminine and neuter genders; the feminine gender
shall include the masculine and neuter genders; and the neuter gender shall
include the masculine and feminine genders.
(b) The parties hereto agree that any rule of construction to the effect
that ambiguities are to be resolved against the drafting party shall not be
applied in the construction or interpretation of this Agreement.
(c) As used in this Agreement, the words "include" and "including," and
variations thereof, shall not be deemed to be terms of limitation, but rather
shall be deemed to be followed by the words "without limitation."
(d) Except as otherwise indicated, all references in this Agreement to
"Sections," "Schedules" and "Exhibits" are intended to refer to Sections of
this Agreement and the Schedules and Exhibits to this Agreement.
(e) Certain capitalized terms used in this Agreement are defined in
Exhibit A.
The parties hereto have caused this Agreement to be executed and delivered
as of the date first above written.
ZEOSOFT CORPORATION, a Florida corporation
By:__________________________________________
Its:
NEOMETRIX TECHNOLOGY GROUP, INC., a
Delaware corporation
By:__________________________________________
Its:
NEOMETRIX ACQUISITION I, INC., a Delaware
corporation
By:__________________________________________
Its:
EXHIBIT A
CERTAIN DEFINITIONS
For purposes of the Agreement (including this Exhibit A):
Consent. "Consent" shall mean any approval, consent, ratification,
permission, waiver or authorization (including from a Governmental Body).
Contract. "Contract" shall mean any written, oral or other agreement,
contract, subcontract, lease, understanding, instrument, note, warranty,
insurance policy, benefit plan, or legally binding commitment or undertaking
of any nature.
Entity. "Entity" shall mean any corporation (including any non-profit
corporation), general partnership, limited partnership, limited liability
partnership, joint venture, estate, trust, company (including any limited
liability company or joint stock company), firm or other enterprise,
association, organization or entity.
Governmental Body. "Governmental Body" shall mean any court, tribunal,
arbitrator, authority, agency, commission, official or other instrumentality
of the United States, any foreign country or any domestic or foreign state,
county, city, local or other political subdivision.
Legal Proceeding. "Legal Proceeding" shall mean any action, suit, litigation,
arbitration, proceeding (including any civil, criminal, administrative,
investigative or appellate proceeding), hearing, inquiry, audit, examination
or investigation commenced, brought, conducted or heard by or before, or
otherwise involving, any court or other Governmental Body or any arbitrator
or arbitration panel.
Legal Requirement. "Legal Requirement" shall mean any federal, state, local,
municipal, foreign or other law, statute, constitute, principle of common law,
resolution, ordinance, code, edict, decree, rule, regulation, ruling or
requirement issued, enacted, adopted, promulgated, implemented or otherwise
put into effect by or under the authority of any Governmental Body.
Material Adverse Effect. A violation or other matter will be deemed to have
a "Material Adverse Effect" on a Person if such violation or other matter
(considered together with all other matters that would constitute exceptions
to the representations and warranties set forth in the Agreement or in any
Closing Certificate but for the presence of "Material Adverse Effect" or other
materiality qualifications, or any similar qualifications, in such
representations and warranties) would have a material adverse effect on such
Person's business, condition, assets, liabilities, operations, financial
performance or prospects.
Person. "Person" shall mean any individual, Entity or Governmental Body.
Tax. "Tax" shall mean any tax (including any income tax, franchise tax,
capital gains tax, gross receipts tax, value-added tax, surtax, excise tax,
ad valorem tax, transfer tax, stamp tax, sales tax, use tax, property tax,
business tax, withholding tax or payroll tax), levy, assessment, tariff, duty
(including any customs duty), deficiency or fee, and any related charge or
amount (including any fine, penalty or interest), imposed, assessed or
collected by or under the authority of any Governmental Body.
Tax Return. "Tax Return" shall mean any return (including any information
return), report, statement, declaration, estimate, schedule, notice,
notification, form, election, certificate or other document or information
filed with or submitted to, or required to be filed with or submitted to, any
Governmental Body in connection with the determination, assessment, collection
or payment of any Tax or in connection with the administration,
implementation or enforcement of or compliance with any Legal Requirement
relating to any Tax.
EXHIBIT B
LEASE AGREEMENT
This Lease Agreement (this "Lease") is made this 1st day of April, 2003,
between Zeosoft Corporation, a Florida corporation having its principal place
of business at 0000 Xxx Xxxx Xxxxxxxxxx Xxxxxxxxx, Xxxxx, Xxxxxxx ("Lessor")
and Neometrix Acquisition I, Inc., a Delaware corporation, whose address is
00000 Xxxxxxx Xxxxx, Xxxxx 000, Xxxxxx, XX 00000 ("Lessee").
BACKGROUND
Lessor is the owner of the personal property listed on Exhibit "A",
attached hereto (the "Equipment"). Lessee desires to lease the Equipment
from Lessor and Lessor desires to lease the Equipment to Lessee.
In consideration of the foregoing, and in consideration of the terms and
covenants contained herein, the parties agree as follows:
AGREEMENT
1. Term. Lessor hereby leases the Equipment to Lessee, and Lessee leases
the Equipment from Lessor, for a period of 24 months, commencing on the date
hereof, and ending on March 31, 2005, unless sooner terminated or cancelled
pursuant to any provision hereinafter contained, or unless extended pursuant
to the provisions of any option hereinafter granted.
2. Rental and Other Payments Made by Lessee. Lessee shall pay to Lessor
the total sum of Twenty-four Thousand and no/100 Dollars ($24,000.00), plus
applicable sales tax, during the term of this lease. Said rent shall be
paid in advance in 24 equal monthly installments in the amount of One
Thousand and no/100 Dollars ($1,000.00), plus applicable sales tax,
commencing on the date hereof and on the first day of each calendar month
hereafter; provided, however, that if the date of this Lease is after the
first day of the calendar month in which this Lease is executed, the rent
payable for calendar month in which this Lease is signed shall be calculated
on a per diem basis of 1/30 of the monthly installment from the date hereof,
and each day thereafter, through the last day of the calendar month in which
this Lease is executed, plus applicable sales tax.
3. Maintenance. Lessee, at its sole expense, shall keep the Equipment
in good repair, condition, and working order. Lessee, in effecting repairs
or maintenance shall use, or cause to be used, only parts specified by the
manufacturer of the Equipment. No modification of, or addition to the
Equipment shall be made without Lessor's prior written consent.
4. Insurance. Lessee agrees, at its sole cost and expense, to keep the
Equipment insured against: (i) fire, theft, and all other casualties covered
by the broadest policy of comprehensive insurance available; and (ii)
liability for personal injury and property damage in any accident in which
the Equipment is involved, or arising out of its operation, with the following
limits:
(a) Injury: _____________________ each person; _____________________ each
incident.
(b) Property damage: ____________________ per incident.
An insurer acceptable to Lessor shall underwrite said insurance policy.
Lessee shall deliver evidence of the required insurance coverage to Lessor.
All policies of insurance shall be in the names of Lessor and Lessee, as their
interests may appear, and shall not be altered without Lessor's prior written
consent. All policies of insurance shall require at least 10 days' written
notice to Lessor of any cancellation or reduction of the limits of coverage.
5. Taxes. It is agreed by the parties that the rent due hereunder is net
to Lessor, and that Lessee shall pay all federal, state, and municipal
license fees, registration fees, assessments, charges, and taxes hereafter
imposed on the ownership, leasing, renting, sale, use or possession of the
Equipment (other than taxes of Lessor's income).
6. Use of Equipment. Lessee shall not use the Equipment for any illegal
or improper purpose, and shall use the Equipment only for the purpose for
which it was intended.
7. Title, Encumbrances. Title to the Equipment leased hereunder shall
remain in the name of the Lessor. The parties hereto agree that this Lease
is a lease contract, and that, by the execution or performance of this Lease,
Lessee acquires no ownership, title, property right, or interest in the
Equipment other than the right of use in accordance with the terms and
conditions hereof. Lessee shall not attempt to sell, mortgage, encumber,
pledge, or hypothecate any of the Equipment, or any interest therein, and
Lessee agrees to keep the Equipment free and clear of any lien, encumbrance
or attachment.
8. Return of Equipment. Upon the termination of this Lease, Lessee shall
return the Equipment to Lessor at Lessor's principal place of business in
good condition, reasonable wear and tear excepted.
9. Right of Inspection. Lessee agrees to make the Equipment available for
Lessor's inspection at such time and place as Lessor may reasonably require;
provided, however, that Lessor's address first specified, above, shall be
deemed to be a reasonable place for any of such inspections.
10. Subordination to Lien. Lessee agrees that it will, at any time during
the term of this Lease, give to Lessor or any holder or prospective holder of
a lien encumbering the Equipment, a written statement of the status of this
Lease, including a certification as to whether this Lease is in good standing
or has been amended. Lessee agrees that all of its right, title, and interest
in and to the Equipment shall be subordinate to the right, title, and interest
of the holder of any lien on the Equipment, whether now existing or hereafter
acquired, and Lessee acknowledges that Lessor may pledge or assign its
interest under this Lease as additional security to the holder of any lien.
Lessee agrees to abide by the terms of any such pledge or assignment and shall
execute such documents as required by Lessor or the holder of the lien to
acknowledge such pledge or assignment.
11. Assignment, Subletting. Lessee may not assign or sublet the Equipment,
this Lease, or any interest therein, either voluntarily or by operation of
law, without Lessor's prior written consent, which may be withheld for any
reason. If Lessor shall consent to any assignment or sublease, such consent
shall not be deemed consent to any other assignment or subletting. This Lease
and all of Lessor's rights herein and to the Equipment shall be assignable by
Lessor without Lessee's consent, and upon receipt of notice of such assignment,
Lessee shall attorn to the assignee.
12. Default. The following shall constitute events of default:
(a) Failure by Lessee to pay any installment of rent within ten (10) days
of the date when due;
(b) Failure by Lessee to pay any other amount due Lessor within ten (10)
days of the date when due;
(c) Breach by Lessee of any of the terms, conditions or covenants herein;
(d) The commencement of bankruptcy or insolvency proceedings by or against
Lessee, Lessee's assignment of assets for the benefit of creditors, or the
appointment of a receiver of the property or business of Lessee;
(e) The assignment or attempted assignment by Lessee of any interest in this
Lease or in the Equipment without Lessor's prior written consent.
13. Remedies. If an Event of Default occurs, Lessor shall be entitled to
pursue all remedies provided in this Lease or under Florida law without
further notice to or demand from Lessee. Such remedies shall be cumulative,
may be exercised concurrently or separately, and shall include, but shall
not be limited to, the following:
(a) To declare the entire amount of rent hereunder immediately due and
payable;
(b) To xxx for and recover all rents and other payments theretofore
accrued or thereafter accruing;
(c) To take possession of and remove the Equipment, wherever the same
shall be located, or to take such steps as are necessary to prevent Lessee
from using it during the period of default, all without court order or any
legal process. Lessee hereby waives any and all damages, costs, and expenses
occasioned by Lessor's actions hereunder, and Lessor's actions hereunder shall
not constitute a termination of this Lease;
(d) To terminate this Lease;
(e) To sell the Equipment at public or private sale, for the best price that
Lessor is offered and upon such terms as Lessor, in its sole discretion, deems
desirable, and apply the proceeds to all expenses of repossession and sale and
then to the payment of rent or such other sums as may be due hereunder in such
order of application as Lessor elects;
(f) To require Lessee to deliver the Equipment to Lessor at Lessor's
principal place of business, or at such other place as is convenient to both
parties;
(g) To require Lessee to pay all expenses associated with the repossession
and sale of the Equipment, including Lessor's reasonable attorney's fees;
(h) To collect interest from Lessee on all unpaid sums from the date when due
until the date paid, at the highest rate allowed by applicable law;
(i) To pursue any other right or remedy at law or in equity.
14. Risk of Less; Indemnification. Lessee hereby assumes and shall bear the
entire risk of loss and damages: (i) to the Equipment from any and every
cause; (ii) for the use, operation, and storage thereof (iii) for all damage
to property arising therefrom; and (iv) for all injury or death to persons
arising therefrom. Lessee shall indemnify Lessor, and hold Lessor and its
agents and employees harmless from all costs, expenses, losses, damages,
claims, and penalties, including reasonable attorney's fees, arising out of
Lessee's use, operation, or storage of the Equipment, or otherwise arising
under the terms of this Lease.
15. Disclaimer of Warranties. BECAUSE LESSOR IS NEITHER THE
MANUFACTURER OF THE EQUIPMENT NOR THE MANUFACTURER'S AGENT, LESSOR
MAKES NO EXPRESS OR IMPLIED WARRANTIES OF ANY KIND WHATSOEVER WITH
RESPECT TO THE EQIUPMENT, INCLUDING, BUT NOT LIMITED TO: THE
MERCHANTABILITY OF THE EQUIPMENT OR ITS FITNESS FOR A PARTICULAR
PURPOSE; THE DESIGN OF THE EQUIPMENT; THE QUALITY OR CAPACITY OF THE
EQUIPMENT; THE WORKMANSHIP IN THE EQUIPMENT; COMPLIANCE OF THE
EQUIPMENT WITH APPLICABLE LAWS, REGULATIONS OR RULES OF GOVERNMENTAL
BODIES OR COMPLIANCE WITH CONTRACTUAL REQUIREMENTS; OR THE
NONEXISTENCE OF DEFECTS IN THE EQUIPMENT, INCLUDING LATENT DEFECTS.
Lessee leases the Equipment "as is." Lessee will be subrogated to Lessor's
claims, if any, against the manufacturer of the Equipment for breach of
warranty or misrepresentation, and, upon written request from Lessee, Lessor
shall take all reasonable steps to enforce any warranty against the
manufacturer of the Equipment, provided that Lessee is not then in default,
and provided, further, that Lessor shall not be required to commence or enter
into any litigation to enforce any of its rights, unless Lessee agrees to
indemnify Lessor and hold him harmless from all costs and expenses
associated therewith. All proceeds recovered by Lessor shall first be
used to repair the Equipment.
16. Binding Effect, Amendment. This Lease shall be binding upon the
parties hereto, their heirs, successors, and permitted assignees. This
Lease may only be amended or modified in writing, signed by the parties hereto.
17. Notices. All notices required or permitted to be given hereunder shall
be in writing, signed by the party giving same, and shall be deemed delivered
3 days after the deposit of same in the United States mail, postage prepaid,
for delivery via certified or registered mail, return receipt requested, and
addressed to the party at the address first set forth above, or at such other
address as shall have been delivered to the notifying party.
18. Headings. The paragraph headings have been inserted for convenience
only, and are not intended to be used in the construction or interpretation
of this Lease.
19. Governing Law, Venue. This Lease shall be governed by and construed in
accordance with the laws of the State of Florida. The parties agree that
Hillsborough County, Florida shall be the sole proper and convenient venue for
any litigation arising out of this Lease, and each party hereby waives any
claim or defense, whether asserted by motion or pleading, that Hillsborough
County, Florida is an improper or inconvenient venue.
20. Attorney's Fees and Costs. In any litigation arising out of this Lease,
the prevailing party shall be entitled to recover all costs and expenses,
including reasonable attorney's fees, from the non-prevailing party.
21. Time of Essence. Time is of the essence of the payment of all sums
falling due under the terms of this Lease.
22. Gender, Number. As used herein the masculine gender shall include the
feminine and the neuter, the singular number shall include the plural, and
vice-versa.
23. Severability. If any provision of this Lease is deemed invalid as
contrary to law or to public policy, then such provision shall be deemed
omitted herefrom, but shall not invalidate the remaining provisions hereof.
24. Purchase Option. Provided Lessee timely and faithfully fulfills its
obligations hereunder, at the end of the term hereof, Lessee shall have the
absolute unrestricted option to purchase the Equipment for the sum of One
Dollar ($1.00).
IN WITNESS WHEREOF, the parties hereto have executed this Lease on the date
first above written.
"LESSOR"
ZEOSOFT CORPORATION
By:_____________________________________
, President
"LESSEE"
NEOMETRIX ACQUISITION I, INC.
By:_______________________________________
, President
EXHIBIT C
ALLOCATION OF PURCHASE PRICE
Asset Category Allocated Amount
EXHIBIT D
XXXX OF SALE AND ASSIGNMENT
KNOW ALL MEN BY THESE PRESENTS THAT, for value received, the undersigned,
ZEOSOFT CORPORATION, a Florida corporation ("Seller"), does hereby sell,
assign, convey and transfer unto NEOMETRIX ACQUISITION I, INC., a Delaware
corporation ("Buyer"), all of Seller's right, title and interest in and to
the personal property more particularly described on Exhibit "A" attached
hereto and made a part hereof.
Seller hereby warrants to Buyer, its successors and assigns, that Seller is
the rightful owner of the property conveyed; that Seller is conveying to
Buyer good and merchantable title to all of the property conveyed, free and
clear of all liabilities, obligations, claims, and encumbrances of any kind
or nature; and that Seller (and Seller's successors and assigns) will warrant
and defend this sale against the claims and demands of all persons whomsoever;
provided, however, that the property conveyed is subject to a lien in favor
of the holders of Seller's Series A Convertible Secured Promissory Notes.
Seller hereby covenants and agrees that it will, at the request of Buyer and
without further consideration, execute and deliver, and will cause its
employees to execute and deliver, such other instruments of sale, transfer,
conveyance and assignment, and take such other action as may be reasonably
necessary to vest in Buyer, its successors and assigns, good and merchantable
title to the property conveyed, free and clear of all liabilities, obligations,
claims, and encumbrances of any kind or nature and to put Buyer in control and
possession thereof; provided, however, that the property conveyed is subject
to a lien in favor of the holders of Seller's Series A Convertible Secured
Promissory Notes.
Seller does hereby irrevocably constitute Buyer, its successors and assigns,
as Seller's true and lawful attorney-in-fact, with full power of substitution,
in Seller's or Buyer's name, to claim, demand, collect and receive the
property conveyed.
This instrument shall be binding on Seller and its successors and assigns,
and shall inure to the benefit of Buyer and its successors and assigns.
Dated this 1st day of April, 2003.
SELLER:
ZEOSOFT CORPORATION
By:________________________________
Its:
EXHIBIT "A"
EXHIBIT E
NEOMETRIX ACQUISITION I, INC.
Class B Secured Promissory Note
April 1, 2003
Subject to the terms and conditions of this Class B Secured Promissory Note
(the "Note"), for value received, NEOMETRIX ACQUISITION I, INC., a Delaware
corporation (the "Company"), whose address is __________________________
promises to pay to __________________________________ or its assigns (the
"Holder"), whose address is ____________________________________________,
the principal amount of ____________________________________________________
_____________ and 00/100 U.S. Dollars ($__________), together with interest at
the rate of twelve percent (12%) per annum, compounded annually. Principal
and accrued interest shall be due and payable on March 31, 2005, subject to
the terms set forth herein.
The following is a statement of the rights of the Holder and the terms and
conditions to which this Note is subject, and to which the Holder hereof,
by the acceptance of this Note, agrees:
1. Maturity Date. Unless earlier converted as provided in Section 2 below,
beginning March 31, 2005 (the "Maturity Date"), the principal amount of this
Note, and interest accrued thereon, will be due and payable without demand.
2. Default. If Company (i) fails to make payment of principal or interest
on the date such payment is due and payable as required by this Note or (ii)
fails to observe or perform any of the covenants or agreements to be observed
or performed hereunder or under the terms of that certain Security Agreement
to which the Company and Holder are parties, to the extent such failure has a
material adverse effect on the Company or Holder, then such event shall be
deemed an event of default hereunder after fifteen (15) days' notice by Holder
to Company specifying such default and the failure by the Company to cure and
Holder may, at its option, declare the entire principal amount of the Note,
together with all accrued and unpaid interest thereon, to be immediately due
and payable. Upon any event of default hereunder, the Company promises to pay
all costs and reasonable attorneys' fees incurred by the Holder in enforcing
any right or remedy available to the Holder.
3. Remedies. In addition to the rights and remedies set forth in this
Note, Holder shall have all of the rights and remedies accorded under any
and all applicable laws and any other instrument or agreement now or
hereafter entered into between Holder and Company (subject to the provisions
set forth herein), and all of such rights and remedies are cumulative and none
is exclusive. Exercise or partial exercise by Holder of one or more rights or
remedies shall not be deemed an election, nor bar Holder from subsequent
exercise or partial exercise of any other rights or remedies.
4. Severability. If one or more of the provisions hereof shall be declared
or held to be invalid, illegal, or unenforceable in any respect in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby and
any such declaration or holding shall not invalidate or render unenforceable
such provision in any other jurisdiction.
5. Mutilated, Destroyed, Lost or Stolen Notes. In case the Note shall
become mutilated or defaced, or be destroyed, lost or stolen, the Company
shall execute and deliver a new Note of like principal amount in exchange
and substitution for the mutilated or defaced Note, or in lieu of and in
substitution for the destroyed, lost or stolen Note. In the case of a
mutilated or defaced Note, the Holder shall surrender such Note to the
Company. In the case of any destroyed, lost or stolen Note, the Holder
shall furnish to the Company (i) evidence to its satisfaction of the
destruction, loss or theft of such Note and (ii) such security or indemnity
as may be reasonably required by it to hold the Company harmless.
6. Payment. All payments shall be made in lawful money of the United
States of America at such place as the Holder hereof may from time to time
designate in writing to the Company. Payment shall be credited first to the
accrued interest then due and payable and the remainder applied to principal.
Prepayment of principal, together with accrued interest, may be made at any
time without penalty.
7. Assignment. The rights and obligations of the Company and the Holder
of this Note will be binding upon and inure to the benefit of the successors,
assigns, heirs, administrators and transferees of the parties.
Notwithstanding the foregoing, the Holder may not assign, pledge or otherwise
transfer this Note without first complying with all applicable securities
laws. Subject to the preceding sentence, this Note may be transferred only
upon surrender of the original Note for registration of transfer, duly
endorsed, or accompanied by a duly executed written instrument of transfer
in form satisfactory to the Holder. Thereupon, a new note for like principal
amount and interest will be issued to, and registered in the name of, the
transferee. Interest and principal are payable only to the registered holder
of this Note.
8. Waivers and Amendment. Any provision of this Note, including, without
limitation, the due date hereof, and the observance of any term hereof, may be
amended, waived or modified (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Company and the Holder. Except as set forth in Section 1 of this Note, the
Company hereby waives presentment, notice of non-payment, notice of dishonor,
protest, notice of protest, demand and diligence.
9. Notices. Any notice, request or other communication required or
permitted hereunder will be in writing and shall be deemed to have been duly
given if personally delivered or mailed by registered or certified mail,
postage prepaid, at the respective addresses of the parties as set forth
herein. Any party hereto may by notice so given change its address for
future notice hereunder. Notice will be conclusively deemed given when
personally delivered or when deposited in the mail in the manner set forth
above and will be deemed received when delivered.
10. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Florida, excluding that body of law
relating to conflict of laws.
11. Security. This Note is secured by the assets of the Company, as more
fully described in that certain Security Agreement to which the Company and
the Holder are parties.
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of
the date first above written.
NEOMETRIX ACQUISITION I, INC., a Delaware
corporation
By:_______________________________________
Its:
ASSUMPTION AND RELEASE AGREEMENT
This is an Agreement dated this 1ST day of April, 2003, between NEOMETRIX
ACQUISITION I, INC., a Delaware corporation (""NEOMETRIX") and ZEOSOFT
CORPORATION, a Florida corporation ("ZEOSOFT").
BACKGROUND
NEOMETRIX and ZEOSOFT are parties to an Asset Acquisition Agreement ("Asset
Agreement") pursuant to which ZEOSOFT has sold substantially all its assets to
NEOMETRIX. NEOMETRIX has agreed to assume certain indebtedness owed by
ZEOSOFT to the holders of Zeosoft Notes (as that term is defined in the Asset
Agreement) and others. NEOMETRIX is issuing its Class A-1 and Class A-2
secured Promissory Notes in exchange for the Zeosoft Notes. In consideration
of the foregoing, and of the covenants herein contained herein, the parties
agree as follows:
AGREEMENT
1. Recitals. The foregoing recitals, entitled "Background," are
incorporated herein by reference.
2. Assumption. For Ten Dollars ($10.00) in hand paid and other good and
valuable considerations, the receipt of which is hereby acknowledged,
NEOMETRIX does hereby assume and agree to pay and perform in accordance
with their respective terms all obligations relating to the Assumed
Obligations (as that term is defined in the Asset Agreement) owed to any
Person (as that term is defined in the Asset Agreement).
3. Indemnity. For Ten Dollars ($10.00) in hand paid and other good and
valuable considerations, the receipt of which is hereby acknowledged,
NEOMETRIX does hereby agree to protect, defend, indemnify, and hold ZEOSOFT
harmless from and against and with respect to any loss, liability, claim,
demand, suit, action, or proceeding directly or indirectly arising out of or
connected with, or incurred as a result of any of the Assumed Obligations.
This indemnity also includes all costs, attorneys' fees, and expenses
incurred by ZEOSOFT as a result of the making of any of the claims hereby
indemnified against; provided, however, that if NEOMETRIX assumes the defense
of any claim, it shall not be liable for attorneys' fees thereafter incurred
by ZEOSOFT. If any liability, suit, action or claim that is or may be
subject to this indemnity shall be asserted against ZEOSOFT, it shall promptly
notify NEOMETRIX and NEOMETRIX shall undertake to defend, settle or compromise
such matter. ZEOSOFT shall fully cooperate with NEOMETRIX in any such
defense. If NEOMETRIX fails to undertake to defend, compromise, or settle
such matter within twenty (20) days after receipt of notice thereof, ZEOSOFT
may take such actions as they deem appropriate with respect to the liability,
suit, action, or claim. Upon ascertainment by ZEOSOFT of any loss,
compromise, or settlement for any matter hereby indemnified against, or
upon entry of a final judgment against ZEOSOFT with respect to any such
matter, NEOMETRIX shall be liable to ZEOSOFT for the amount of such loss,
settlement, compromise, or judgment, plus, in each case, attorneys' fees,
costs, and expenses incurred by ZEOSOFT attributable thereto. If ZEOSOFT
becomes aware of any liability, suit, action, or claim that is subject to
this indemnity and fails to promptly notify NEOMETRIX of the existence and
nature thereof, or if ZEOSOFT fails to fully cooperate with the defense
thereof, the indemnity herein contained shall be deemed waived.
4. Release. For Ten Dollars ($10.00) in hand paid and other good and
valuable considerations, the receipt of which is hereby acknowledged,
NEOMETRIX does hereby release ZEOSOFT from any and all liabilities and
obligations under the Zeosoft Notes.
5. Governing Law. This Agreement shall be governed by, construed, and
enforced in accordance with the laws of the State of Florida, excluding those
provisions relating to the resolution of conflicts of laws of different
jurisdictions if the application of such provisions would cause this Agreement
to be governed by, construed, or enforced in accordance with the laws of a
jurisdiction other than Florida.
6. Headings. The headings contained in this Agreement have been inserted
for convenient reference, are not a part hereof, and shall not affect the
meaning or interpretation of the terms hereof.
7. Amendment. This Agreement may not be amended, modified, or supplemented,
except by a written instrument signed by the party against whom enforcement of
any amendment, modification, or supplement is sought. No waiver of any
provision of this Agreement shall be effective unless in writing, signed by
the party against whom the effect of the waiver is to be charged. A waiver of
any breach of this Agreement shall not be considered a waiver of any
subsequent breach.
8. Construction. As used herein, words denoting the masculine gender shall
be deemed inclusive of the feminine and neuter, and words of singular number
shall be deemed to include the plural, and vice-versa. Capitalized terms not
defined herein shall have the meanings ascribed to them in the Asset Agreement.
9. Notices. All notices, demands, or other communications hereunder shall
be in writing and shall be deemed effective (i) upon actual receipt if
delivered by courier, facsimile transmission or regular U.S. Mail; (ii) one
business day after deposit with a national overnight delivery service; or
(iii) three (3) business days after mailing by certified or registered mail
to the parties at their respective addresses set forth below:
if to NEOMETRIX:
Neometrix Acquisition I, Inc.
00000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxx, Esq.
New Venture Attorneys
00000 Xxxxxxx Xxx
Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
if to Seller:
Zeosoft Corporation
0000 Xxx Xxxx Xxxxxxxxxx Xxxx.
Xxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxxx X. Xxxxxx, Esq.
0000 Xxx Xxxx Xxxxxxxxxx Xxxx.
Xxxxx, XX 00000
Facsimile: (000) 000-0000
Each party may change its address for the giving of notice as provided in
this paragraph.
IN WITNESS WHEREOF, the undersigned have executed this Agreement this 1st
day of April, 2003.
ZEOSOFT CORPORATION, a Florida corporation
By:________________________________________
Its:
NEOMETRIX ACQUISITION I, INC., a Delaware
corporation
By:________________________________________
Its:
EXHIBIT G
NEOMETRIX ACQUISITION I, INC.
Class A-1 Secured Promissory Note
April 1, 2003
Subject to the terms and conditions of this Class A-1 Secured Promissory Note
(the "Note"), for value received, NEOMETRIX ACQUISITION I, INC., a Delaware
corporation (the "Company"), whose address is __________________________
promises to pay to __________________________________ or its assigns
(the "Holder"), whose address is _________________________________________
___, the principal amount of _______________________________________________
__________________ and 00/100 U.S. Dollars ($__________), together with
interest at the rate of twelve percent (12%) per annum, compounded annually.
Principal and accrued interest shall be due and payable on March 31, 2004,
subject to the terms set forth herein.
This Note is one of a series of promissory notes of like tenor, denominated
the Class A-1 Secured Promissory Notes of the Company ("Class A-1 Notes").
All payments by the Company pursuant to the terms and conditions hereof shall
be paid ratably among the Holders, in proportion to the amount owed to each
under the Class A-1 Notes, and all sums recovered by any of the Holders
pursuant to the exercise of any remedies herein contained shall be divided
ratably among the Holders of Class A-1 Notes in proportion to the amount
owed to each of them.
The following is a statement of the rights of the Holder and the terms and
conditions to which this Note is subject, and to which the Holder hereof, by
the acceptance of this Note, agrees:
1. Maturity Date. Unless earlier converted as provided in Section 2 below,
beginning March 31, 2004 (the "Maturity Date"), the principal amount of this
Note, and interest accrued thereon, will be due and payable without demand.
2. Conversion.
2.1 Investment by Holder. At the option of the Holder, the principal amount
of this Note, and interest accrued thereon, may be converted, in whole or in
part, into fully paid and nonassessable shares of the common capital stock
("Stock") of Neometrix Technology Group, Inc., a Delaware corporation
("Parent") the parent company of Maker, at a conversion price equal to
seventy-two and one-half percent (72.5%) of the price at which Parent has
most recently sold any shares of its stock (determined on the date of
conversion), but not lower than the closing trade price of Parent's stock on
the Closing Date (the conversion price is hereafter referred to as the
"Conversion Price"). The number of shares of Stock to be issued upon such
conversion shall be equal to the quotient obtained by dividing (a) the
principal amount of this Note, and interest accrued thereon, by (b) the
Conversion Price.
2.2. Mechanics and Effect of Conversion. Upon the election of Holder, this
note will be converted, in whole or in such part as may be determined by
Holder, into Stock upon notice to the Parent. Upon conversion of this Note
pursuant to this Section 2, the Holder of this Note shall surrender this Note,
duly endorsed, at the principal office of the Parent or any transfer agent for
the Parent. At its expense, the Parent shall, as soon as practicable
thereafter, issue and deliver to such Holder a certificate or certificates
in the agreed upon form for the number of shares to which such Holder is
entitled upon such conversion, together with a check payable to the Holder for
any cash amounts payable as described herein and a replacement Note of like
tenor for the remaining principal and interest if this Note is converted only
in part. Upon conversion of this Note, the Company will be forever released
from all its obligations and liabilities under this Note with regard to that
portion of the principal amount and accrued interest being
converted, including, without limitation, the obligation to repay
such portion of the principal amount and any accrued interest
converted.
3. Default. If Company (i) fails to make payment of principal or interest
on the date such payment is due and payable as required by this Note or (ii)
fails to observe or perform any of the covenants or agreements to be observed
or performed hereunder or under the terms of that certain Security Agreement
to which the Company and Holder are parties, to the extent such failure
has a material adverse effect on the Company or Holder, then such event shall
be deemed an event of default hereunder after fifteen (15) days' notice by
Holder to Company specifying such default and the failure by the Company to
cure and Holder may, at its option, declare the entire principal amount of
the Note, together with all accrued and unpaid interest thereon, to be
immediately due and payable. Upon any event of default hereunder, the
Company promises to pay all costs and reasonable attorneys' fees incurred
by the Holder in enforcing any right or remedy available to the Holder.
4. Remedies. In addition to the rights and remedies set forth in this
Note, Holder shall have all of the rights and remedies accorded under any and
all applicable laws and any other instrument or agreement now or hereafter
entered into between Holder and Company or Parent (subject to the provisions
set forth herein), and all of such rights and remedies are cumulative and none
is exclusive. Exercise or partial exercise by Holder of one or more rights or
remedies shall not be deemed an election, nor bar Holder from subsequent
exercise or partial exercise of any other rights or remedies. All rights
and remedies shall be exercised for the benefit of all Holders in
proportion to the amounts owing to each of them under the Notes.
5. Mergers, Etc. (a) In case of any consolidation with or merger of the
Parent with or into another corporation (other than a merger of consolidation
in which the Parent is the continuing or surviving corporation), or in case of
any sale, lease or conveyance to another corporation of all or substantially
all of the assets of the Parent, appropriate provision (as reasonably
determined by the Parent's Board of Directors) shall be made so that the
Holder shall have the right thereafter to receive upon conversion of this
Note solely the kind and amount of shares of stock and other securities,
property, cash or any combination thereof receivable upon such consolidation,
merger, sale, lease or conveyance by a holder of the number of shares of Stock
for which this Note might have been converted immediately prior to such
consolidation, merger, sale, lease or conveyance, and, in any such case,
effective provision shall be made in the Parent's Articles of
Incorporation or otherwise, if necessary, in order to effect such agreement.
(b) In case of any reclassification or change in the Stock issuable upon
conversion of this Note (other than a change in par value, or from par value
to no par value or from no par value to par value, or as a result of a
subdivision or combination, but including any change in the shares into
two or more classes or series of shares) or in case of any consolidation or
merger of another corporation into the Parent in which the Parent is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) in the
Stock (other than a change in par value, or from par value to no par value,
or as a result of division or combination, but including any change in the
Stock into two or more classes or series of shares), the Holder shall have
the right thereafter to receive upon conversion of this Note solely the kind
and amount of shares of stock and other securities, property, cash or any
combination thereof receivable by a holder of the number of shares for which
this Note might have been exercised immediately prior to such
reclassification, change, consolidation or merger.
(c) The above provisions of this Section 5 shall similarly apply to successive
reclassification and changes in shares of Stock and to successive
consolidations, mergers, sales or conveyances.
6. Severability. If one or more of the provisions hereof shall be
declared or held to be invalid, illegal, or unenforceable in any respect in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby and
any such declaration or holding shall not invalidate or render unenforceable
such provision in any other jurisdiction.
7. Mutilated, Destroyed, Lost or Stolen Notes. In case the Note shall
become mutilated or defaced, or be destroyed, lost or stolen, the Company
shall execute and deliver a new Note of like principal amount in exchange
and substitution for the mutilated or defaced Note, or in lieu of and in
substitution for the destroyed, lost or stolen Note. In the case of a
mutilated or defaced Note, the Holder shall surrender such Note to the
Company. In the case of any destroyed, lost or stolen Note, the Holder
shall furnish to the Company (i) evidence to its satisfaction of the
destruction, loss or theft of such Note and (ii) such security or indemnity
as may be reasonably required by it to hold the Company harmless.
8. Payment. Unless earlier converted into shares of Stock of the Parent,
all payments shall be made in lawful money of the United States of America
at such place as the Holder hereof may from time to time designate in writing
to the Company. Payment shall be credited first to the accrued interest then
due and payable and the remainder applied to principal. Prepayment of
principal, together with accrued interest, may be made at any time without
penalty.
9. Assignment. The rights and obligations of the Company and the Holder
of this Note will be binding upon and inure to the benefit of the successors,
assigns, heirs, administrators and transferees of the parties.
Notwithstanding the foregoing, the Holder may not assign, pledge or otherwise
transfer this Note without first complying with all applicable securities
laws. Subject to the preceding sentence, this Note may be transferred only
upon surrender of the original Note for registration of transfer, duly
endorsed, or accompanied by a duly executed written instrument of transfer
in form satisfactory to the Holder. Thereupon, a new note for like principal
amount and interest will be issued to, and registered in the name of, the
transferee. Interest and principal are payable only to the registered holder
of this Note.
10. Waivers and Amendment. Any provision of this Note, including, without
limitation, the due date hereof, and the observance of any term hereof, may be
amended, waived or modified (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Company and the Holder. Except as set forth in Section 1 of this Note, the
Company hereby waives presentment, notice of non-payment, notice of dishonor,
protest, notice of protest, demand and diligence.
11. Notices. Any notice, request or other communication required or
permitted hereunder will be in writing and shall be deemed to have been
duly given if personally delivered or mailed by registered or certified mail,
postage prepaid, at the respective addresses of the parties as set forth
herein. Any party hereto may by notice so given change its address for
future notice hereunder. Notice will be conclusively deemed given when
personally delivered or when deposited in the mail in the manner set forth
above and will be deemed received when delivered.
12. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Florida, excluding that body of
law relating to conflict of laws.
13. Security. This Note and all other notes denominated Class A-1 Secured
Promissory Notes issued by the Company are secured by the assets of the
Company, as more fully described in that certain Security Agreement to
which the Company and the Holder are parties.
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of
the date first above written.
NEOMETRIX ACQUISITION I, INC., a Delaware
corporation
By:_______________________________________
Its:
EXHIBIT G
NEOMETRIX ACQUISITION I, INC.
Class A-2 Secured Promissory Note
April 1, 2003
Subject to the terms and conditions of this Class A-1 Secured Promissory Note
(the "Note"), for value received, NEOMETRIX ACQUISITION I, INC., a Delaware
corporation (the "Company"), whose address is __________________________
promises to pay to __________________________________ or its assigns (the
"Holder"), whose address is ____________________________________________,
the principal amount of __________________________________________________
_______________ and 00/100 U.S. Dollars ($__________), together with interest
at the rate of twelve percent (12%) per annum, compounded annually. Principal
and accrued interest shall be due and payable on September 30, 2004, subject
to the terms set forth herein.
This Note is one of a series of promissory notes of like tenor, denominated
the Class A-2 Secured Promissory Notes of the Company ("Class A-2 Notes").
All payments by the Company pursuant to the terms and conditions hereof shall
be paid ratably among the Holders, in proportion to the amount owed to each
under the Class A-2 Notes, and all sums recovered by any of the Holders
pursuant to the exercise of any remedies herein contained shall be divided
ratably among the Holders of Class A-2 Notes in proportion to the amount
owed to each of them.
The following is a statement of the rights of the Holder and the terms and
conditions to which this Note is subject, and to which the Holder hereof, by
the acceptance of this Note, agrees:
1. Maturity Date. Unless earlier converted as provided in Section 2 below,
beginning September 30, 2004 (the "Maturity Date"), the principal amount of
this Note, and interest accrued thereon, will be due and payable without
demand.
2. Conversion.
2.1 Investment by Holder. At the option of the Holder, the principal amount
of this Note, and interest accrued thereon, may be converted, in whole or in
part, into fully paid and nonassessable shares of the common capital stock
("Stock") of Neometrix Technology Group, Inc., a Delaware corporation
("Parent") the parent company of Maker, at a conversion price equal to
seventy-two and one-half percent (72.5%) of the price at which Parent has
most recently sold any shares of its stock (determined on the date of
conversion), but not lower than the closing trade price of Parent's stock on
the Closing Date (the conversion price is hereafter referred to as the
"Conversion Price"). The number of shares of Stock to be issued upon such
conversion shall be equal to the quotient obtained by dividing (a) the
principal amount of this Note, and interest accrued thereon, by (b) the
Conversion Price.
2.2. Mechanics and Effect of Conversion. Upon the election of Holder, this
note will be converted, in whole or in such part as may be determined by
Holder, into Stock upon notice to the Parent. Upon conversion of this Note
pursuant to this Section 2, the Holder of this Note shall surrender this Note,
duly endorsed, at the principal office of the Parent or any transfer agent for
the Parent. At its expense, the Parent shall, as soon as practicable
thereafter, issue and deliver to such Holder a certificate or certificates
in the agreed upon form for the number of shares to which such Holder is
entitled upon such conversion, together with a check payable to the Holder for
any cash amounts payable as described herein and a replacement Note of like
tenor for the remaining principal and interest if this Note is converted only
in part. Upon conversion of this Note, the Company will be forever released
from all its obligations and liabilities under this Note with regard to that
portion of the principal amount and accrued interest being converted,
including, without limitation, the obligation to repay such portion of
the principal amount and any accrued interest converted.
3. Default. If Company (i) fails to make payment of principal or interest
on the date such payment is due and payable as required by this Note or (ii)
fails to observe or perform any of the covenants or agreements to be observed
or performed hereunder or under the terms of that certain Security Agreement
to which the Company and Holder are parties, to the extent such failure has a
material adverse effect on the Company or Holder, then such event shall be
deemed an event of default hereunder after fifteen (15) days' notice by Holder
to Company specifying such default and the failure by the Company to cure and
Holder may, at its option, declare the entire principal amount of the Note,
together with all accrued and unpaid interest thereon, to be immediately due
and payable. Upon any event of default hereunder, the Company promises to
pay all costs and reasonable attorneys' fees incurred by the Holder in
enforcing any right or remedy available to the Holder.
4. Remedies. In addition to the rights and remedies set forth in this
Note, Holder shall have all of the rights and remedies accorded under any and
all applicable laws and any other instrument or agreement now or hereafter
entered into between Holder and Company or Parent (subject to the provisions
set forth herein), and all of such rights and remedies are cumulative and none
is exclusive. Exercise or partial exercise by Holder of one or more rights or
remedies shall not be deemed an election, nor bar Holder from subsequent
exercise or partial exercise of any other rights or remedies. All rights
and remedies shall be exercised for the benefit of all Holders in
proportion to the amounts owing to each of them under the Notes.
5. Mergers, Etc. (a) In case of any consolidation with or merger of the
Parent with or into another corporation (other than a merger of consolidation
in which the Parent is the continuing or surviving corporation), or in case
of any sale, lease or conveyance to another corporation of all or substantially
all of the assets of the Parent, appropriate provision (as reasonably
determined by the Parent's Board of Directors) shall be made so that the
Holder shall have the right thereafter to receive upon conversion of this
Note solely the kind and amount of shares of stock and other securities,
property, cash or any combination thereof receivable upon such consolidation,
merger, sale, lease or conveyance by a holder of the number of shares of Stock
for which this Note might have been converted immediately prior to such
consolidation, merger, sale, lease or conveyance, and, in any such case,
effective provision shall be made in the Parent's Articles of Incorporation
or otherwise, if necessary, in order to effect such agreement.
(b) In case of any reclassification or change in the Stock issuable upon
conversion of this Note (other than a change in par value, or from par value
to no par value or from no par value to par value, or as a result of a
subdivision or combination, but including any change in the shares into
two or more classes or series of shares) or in case of any consolidation
or merger of another corporation into the Parent in which the Parent is the
continuing corporation and in which there is a reclassification or change
(including a change to the right to receive cash or other property) in the
Stock (other than a change in par value, or from par value to no par value,
or as a result of division or combination, but including any change in the
Stock into two or more classes or series of shares), the Holder shall have
the right thereafter to receive upon conversion of this Note solely the kind
and amount of shares of stock and other securities, property, cash or any
combination thereof receivable by a holder of the number of shares for
which this Note might have been exercised immediately prior to such
reclassification, change, consolidation or merger.
(c) The above provisions of this Section 5 shall similarly apply to
successive reclassification and changes in shares of Stock and to successive
consolidations, mergers, sales or conveyances.
6. Severability. If one or more of the provisions hereof shall be declared
or held to be invalid, illegal, or unenforceable in any respect in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions hereof shall not in any way be affected or impaired thereby and
any such declaration or holding shall not invalidate or render unenforceable
such provision in any other jurisdiction.
7. Mutilated, Destroyed, Lost or Stolen Notes. In case the Note shall
become mutilated or defaced, or be destroyed, lost or stolen, the Company
shall execute and deliver a new Note of like principal amount in exchange and
substitution for the mutilated or defaced Note, or in lieu of and in
substitution for the destroyed, lost or stolen Note. In the case of a
mutilated or defaced Note, the Holder shall surrender such Note to the
Company. In the case of any destroyed, lost or stolen Note, the Holder
shall furnish to the Company (i) evidence to its satisfaction of the
destruction, loss or theft of such Note and (ii) such security or indemnity
as may be reasonably required by it to hold the Company harmless.
8. Payment. Unless earlier converted into shares of Stock of the Parent,
all payments shall be made in lawful money of the United States of America at
such place as the Holder hereof may from time to time designate in writing to
the Company. Payment shall be credited first to the accrued interest then due
and payable and the remainder applied to principal. Prepayment of principal,
together with accrued interest, may be made at any time without penalty.
9. Assignment. The rights and obligations of the Company and the Holder of
this Note will be binding upon and inure to the benefit of the successors,
assigns, heirs, administrators and transferees of the parties. Notwithstanding
the foregoing, the Holder may not assign, pledge or otherwise transfer this
Note without first complying with all applicable securities laws. Subject
to the preceding sentence, this Note may be transferred only upon surrender
of the original Note for registration of transfer, duly endorsed, or
accompanied by a duly executed written instrument of transfer in form
satisfactory to the Holder. Thereupon, a new note for like principal amount
and interest will be issued to, and registered in the name of, the transferee.
Interest and principal are payable only to the registered holder of this Note.
10. Waivers and Amendment. Any provision of this Note, including, without
limitation, the due date hereof, and the observance of any term hereof, may be
amended, waived or modified (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Company and the Holder. Except as set forth in Section 1 of this Note, the
Company hereby waives presentment, notice of non-payment, notice of dishonor,
protest, notice of protest, demand and diligence.
11. Notices. Any notice, request or other communication required or
permitted hereunder will be in writing and shall be deemed to have been
duly given if personally delivered or mailed by registered or certified mail,
postage prepaid, at the respective addresses of the parties as set forth
herein. Any party hereto may by notice so given change its address for future
notice hereunder. Notice will be conclusively deemed given when personally
delivered or when deposited in the mail in the manner set forth above and
will be deemed received when delivered.
12. Governing Law. This Note shall be governed by and construed in
accordance with the laws of the State of Florida, excluding that body of law
relating to conflict of laws.
13. Security. This Note and all other notes denominated Class A-2 Secured
Promissory Notes issued by the Company are secured by the assets of the
Company, as more fully described in that certain Security Agreement to which
the Company and the Holder are parties.
IN WITNESS WHEREOF, the Company has caused this Note to be issued as of
the date first above written.
NEOMETRIX ACQUISITION I, INC., a Delaware
corporation
By:_______________________________________
Its:
EXHIBIT H
SECURITY AGREEMENT
This SECURITY AGREEMENT ("Security Agreement") is made and entered into
as of the 1ST day of April, 2003, by and between NEOMETRIX ACQUISITION I,
INC., a Delaware corporation, with its principal office at __________________
___________________________, ("Borrower") and each holder of Borrower's Class
X-0, Xxxxx X-0, and Class B Secured Promissory Notes (each, a "Lender" and
collectively, the "Lenders").
RECITALS
Borrower has requested that Lenders extend certain credit facilities to
Borrower, consisting of term loans in an aggregate principal amount up to Two
Million Two Hundred Thousand Dollars ($2,200,000.00) (the "Loans"). The
Loans are and will be evidenced by Borrower's Class X-0, Xxxxx X-0, and Class
B Secured Promissory Notes (the "Notes").
Lenders are willing to extend the Loans to Borrower on a secured basis,
subject to the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Borrower and Lenders agree as
follows:
ARTICLE I DEFINITIONS
1.1 Defined Terms. In addition to terms defined elsewhere in this
Security Agreement, when used herein, the following terms shall have the
following meanings:
"Account" means any right of Borrower, whether or not earned by
performance, to payment for goods or other property sold or leased or for
services rendered that is not evidenced by an Instrument or Chattel Paper,
including without limitation:
(a) all presently owned and hereafter acquired receivables,
including all open accounts, contract rights, notes, drafts, acceptances,
rental receivables, installment payment obligations and other obligations
for or rights to the payment of money created by Borrower, or acquired by
Borrower from others;
(b) all cash and non-cash proceeds thereof, and all contracts,
documents, invoices and other instruments evidencing the same; and
(c) all collateral security therefor (including guaranties,
mortgages, or security interests) and all of Borrower's rights and remedies
in connection with the Accounts or in connection with any property sold or
leased which is represented thereby.
"Account Debtor" means the Person who is obligated on an Account.
"Chattel Paper" means a writing or writings that evidence both a
monetary obligation and a security interest in or a lease of specified goods.
"Collateral" has the meaning given to such term in Section 2.1.
"Default" shall mean the failure by the Borrower to timely perform any
monetary obligation under this Agreement or any of the Loan Documents or
Obligations or the failure by the Borrower to observe or perform in any
material respect any of the covenants or agreements to be observed or
performed hereunder or under the terms of any of the Loan Documents or
Obligations after fifteen (15) days' notice by Lenders to Borrower specifying
such default and the failure by the Borrower to cure.
"Default Rate" shall mean the lesser of (i) eighteen percent (18%) per
365-day annum, or (ii) the highest rate of interest permitted from time to
time by applicable law.
"Document" shall mean any now owned or hereafter acquired xxxx of
lading, dock warrant, dock receipt, warehouse receipt or order for the
delivery of goods, and also any other document, whether negotiable or
non-negotiable, that in the regular course of business of financing is treated
as adequately evidencing that the Person in possession of it is entitled to
receive, hold and dispose of the document and the goods it covers.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Due Date" shall mean the date any payment of principal or interest is
due and payable on the Loans or the Notes.
"Equipment" means all goods (other than Inventory) used or bought for
use primarily in the business of Borrower, wherever located, including, but
not limited to, machinery, furniture, furnishings, fixtures, leasehold
improvements, computers, parts (including spare parts and repair parts) and
tools, together with all fittings, accessories, accessions, additions,
modifications, improvements, equipment and special tools now or hereafter
affixed to any or any part of the foregoing or used in connection with any
part of the foregoing and all replacements of any part thereof.
"Event of Default" means an event of default specified in Article V of
this Security Agreement or an event of default under any other Loan Document.
"Financing Statement" means any financing statement permitted under the
UCC or any other state law for the purpose of perfecting or continuing the
Security Interest.
"General Intangibles" means any personal property of Borrower other than
goods, Accounts, Chattel Paper, Documents, Instruments and money, and including
without limitation, Intellectual Property.
"Instrument" means a negotiable instrument or any other writing that
evidences a right to payment of money and is not itself a security agreement
or lease and is of a type that is in ordinary course of business transferred
by delivery with any necessary endorsement or assignment.
"Intellectual Property" means all of the following, owned or used in the
business of the Borrower as presently conducted or as proposed to be
conducted: (i) trademarks and service marks (registered or unregistered),
trade dress, trade names and other names and slogans embodying business
or product goodwill
or indications of origin, all applications or registrations in any
jurisdiction pertaining to the foregoing and all goodwill associated
therewith; (ii) domestic and foreign patents, patentable inventions,
discoveries, improvements, ideas, know-how, formula methodology, techniques,
processes, technology and computer programs, software and databases
(including source code, object code, algorithms, development documentation,
programming tools, drawings, specifications and data) and all applications or
registrations in any jurisdiction pertaining to the foregoing, including all
reissues, continuations, divisions, continuations-in-part, renewals or
extensions thereof; (iii) trade secrets, including confidential and other
non-public information, and the right in any jurisdiction to limit the use or
disclosure thereof; (iv) copyrights in writings, designs, mask works or other
works, and applications or registrations in any jurisdiction for the foregoing;
(v) scientific, technical, engineering and marketing data and database rights;
(vi) Internet Web sites, domain names and registrations or applications for
registration thereof; (vii) licenses, immunities, covenants not to xxx and the
like relating to any of the foregoing; (viii) books and records describing or
used in connection with any of the foregoing; and (ix) claims or causes of
action arising out of or related to infringement or misappropriation of any
of the foregoing.
"Interest Rate" means twelve percent (12%) per annum, except when the
Default Rate is in effect, but in no event to exceed the maximum rate
permitted by law.
"Inventory" means all (a) goods, merchandise or personal property,
wherever located, held for sale or lease by Borrower in the ordinary course
of business or to be furnished under contracts of service, (b) raw materials,
(c) work in process, (d) materials used or consumed in the Borrower's business,
(e) materials or supplies used or usable in manufacturing or processing,
(f) packaging and shipping materials, (g) inventory covered by a warehouse
receipt, xxxx of lading or other negotiable or non-negotiable Document and
(h) returned or repossessed merchandise, of Borrower.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien,
or charge of any kind (including any agreement to give any of the foregoing,
any conditional sales or other title retention agreements, or any lease in
the nature thereof, and the filing of or agreement to give any financing
statement under the Uniform Commercial Code of any jurisdiction).
"Loan Documents" means this Security Agreement, the Notes, and the
Financing Statements, together with all other agreements, documents and
instruments executed and delivered by Borrower to Lenders in connection
herewith.
"Loans" means the indebtedness evidenced by the Class X-0, Xxxxx X-0,
and Class B Secured Promissory Notes issued from time to time by Borrower to
Lenders.
"Majority in Interest" means the Lenders holding a majority of the Notes
by principal amount.
"Maturity Date" means, with respect to the Class A-1 Secured Promissory
Notes, March 31, 2004; with respect to the Class A-2 Secured Promissory Notes,
September 30, 2004; and with respect to the Class B Secured Promissory Notes,
March 31, 2005. The Notes must be paid at their respective Maturity Dates
(except as otherwise specifically provided in the Loan Documents),
regardless of source.
"Note(s)" means the Class X-0, Xxxxx X-0, and Class B Secured Promissory
Notes issued from time to time by Borrower to Lenders, and all allonges
thereto, and all renewals, extensions, modifications or replacements thereof.
"Obligations" means all payment and performance duties, obligations and
liabilities of any kind or nature of Borrower to Lenders, including, but not
limited to, (a) the indebtedness evidenced by the Notes, together with all
accrued but unpaid interest thereon, (b) all banking and loan fees, costs,
expenses and attorneys' and paralegals' fees and expenses for which Borrower
may be liable, and (c) all other payment and performance duties, obligations
and liabilities of Borrower to Lenders, however and whenever incurred,
acquired or evidenced, whether primary or secondary, direct or indirect,
absolute or contingent, sole or joint and several, or due or to become due,
including without limitation, all such duties, obligations and liabilities
of Borrower to Lenders under and pursuant to this Security Agreement, the
Notes or any of the other Loan Documents, the Loans, and all renewals,
extensions, modifications, amendments or replacements of any thereof. The
term "Obligations" shall include and continue to include payment on any
Obligations which have been made to a Lenders that are subsequently required
to be turned over or returned to Borrower or any other Person for any
reason.
"Person" means any natural person, corporation, division of a
corporation, firm, partnership, association, trust, organization, governmental
authority, or any other entity, whether acting in an individual, fiduciary, or
other capacity.
"Proceeds" means whatever is received upon the sale, exchange,
collection or other disposition of the Collateral, including without
limitation, insurance proceeds.
"Records" means all books, correspondence, credit files, records,
invoices and other papers and documents at any time evidencing or relating to
all or any part of the Collateral, including, without limitation, all tapes,
cards, computer runs, computer programs and other papers and documents in the
possession or control of Borrower or any computer bureau from time to time
acting for Borrower, and all rights in, to and under all policies of insurance,
including claims of rights to payments thereunder and proceeds therefrom,
including any credit insurance;
"Security Agreement" means this Security Agreement, and all supplements,
amendments, modifications or restatements here
"Security Documents" means this Security Agreement, and all other
agreements, assignments, filings, financing statements, certificates of title,
notices, returns and other security instruments and records, however described
or denominated, now or hereafter created or existing, pledging or evidencing
any pledge of any property or assets, however described, to secure any or all
of the Obligations.
"Security Interest" means the security interest in the Collateral
granted by Borrower to Lenders pursuant to Section 2.1.
"UCC" means the Florida Uniform Commercial Code, as amended from
time to time.
1.2 Terms Generally. The definitions in Section 1.1 shall apply
equally to both the singular and plural forms of the terms defined. All
references in this Security Agreement to Articles, Sections, Exhibits and
Schedules shall be deemed references to Articles and Sections of and Exhibits
and Schedules to this Security Agreement unless the context requires otherwise.
All terms contained in this Security Agreement and which are not otherwise
specifically defined herein shall have the meanings provided in the UCC to
the extent the same are used or defined therein.
ARTICLE II COLLATERAL AND GRANT OF SECURITY INTERESTS
2.1 Grant of Security Interest. To secure payment and
performance of all of the Obligations, Borrower hereby grants to Lenders a
continuing Security Interest in and to all of Borrower's right, title and
interest in and to all personal property of Borrower, whether now owned or
existing or hereafter acquired, wherever now or hereafter located (all such
property is hereinafter referred to collectively as the "Collateral"),
including, but not limited to:
(a) All Accounts;
(b) All Inventory;
(c) All Equipment;
(d) All Documents;
(e) All Instruments;
(f) All Chattel Paper;
(g) All General Intangibles;
(h) All cash and cash equivalents;
(i) Any and all balances, credits, deposits (general or special, time or
demand, provisional or final), accounts or monies of or in the name of
Borrower now or hereafter with any financial institution and any and all
property of every kind or description of or in the name of Borrower.
(j) To the extent not encumbered above, all of the right, title and interest
of Borrower in and to the goods or other property represented by or securing
Accounts, Chattel Paper and Instruments;
(k) All rights, remedies, title and interest in, to and in respect of the
Collateral, including without limitation (i) rights and remedies under or
relating to guaranties, contracts of suretyship, letters of credit and credit
and other insurance related to the Collateral, (ii) rights of Borrower as an
unpaid vendor, lienor or secured party, including stoppage in transit,
replevin, repossession and reclamation, and in and to any returned,
repossessed or reclaimed goods, (iii) deposits by and property of Account
Debtors or other Persons securing the obligations of Account Debtors
and (iv) rights, remedies and payments arising from any legal
proceedings initiated by Borrower;
(l) All interests of Borrower in any leases;
(m) All Records;
(n) All products of and all replacements, substitutions, additions or
accessions to or for any of the foregoing; and
(o) All Proceeds of all of the foregoing.
All of the Obligations shall be cross-defaulted with one another, such that an
Event of Default with respect to any of the Obligations, whether under this
Security Agreement or any of the other Loan Documents, shall be deemed an
Event of Default with respect to all of the Obligations.
Notwithstanding anything to the contrary herein contained, the Security
Interest granted herein does not attach to the assets of Neometrix Technology
Group, Inc., the parent corporation of the Borrower (except those assets it
receives from Borrowr) or any of its other subsidiaries.
2.2 Collateral Covenants.
2.2.1 General. (a) The Collateral shall be and remain free and
clear of all Liens whatsoever, other than the lien of a bank in Borrower's
deposit accounts.
(b) To the extent any of the Collateral is tangible
personal property, Borrower shall cause to be maintained on the Collateral
hazard insurance in an amount at least equal to the replacement cost thereof.
(c) Borrower shall defend the Collateral against the
claims and demands of all Persons at any time claiming the same or any
interest therein.
(d) There is not now and shall not be filed in the future
in any jurisdiction any financing statement listing any Person other than
Lenders as a secured party covering any or all of the Collateral.
(e) Borrower will use its reasonable best efforts to
prevent (i) any levy on any of the Collateral under legal process, and (ii)
anything being done that may materially impair the value of any of the
Collateral or the security intended to be afforded by this Agreement.
(f) Borrower shall pay promptly when due all taxes and
assessments upon the Collateral or for its use or operation.
2.2.2 Accounts Covenants. Borrower will notify Lenders promptly
of: (i) any material delay in Borrower's performance of any of its obligations
to any Account Debtor or the assertion of any material claims, offsets,
defenses or counterclaims by any Account Debtor, or any material disputes
with Account Debtors, or any settlement, adjustment or compromise thereof and
(ii) all material adverse information relating to the financial condition of
any Account Debtor. No credit, discount, allowance or extension or agreement
for any of the foregoing shall be granted to any Account Debtor, except in
the ordinary course of Borrower's business.
2.2.3 Lender's Right to Cure. Lenders or any of them may, at
their option, (a) cure any default by Borrower under any agreement with a
third party or pay or bond on appeal any judgment entered against Borrower,
(b) discharge taxes or Liens at any time levied on or existing with respect
to the Collateral and (c) pay any amount, incur any reasonable expense or
perform any act which, in Lenders' judgment, is necessary or appropriate to
preserve, protect, insure or maintain the Collateral and the rights of
Lenders with respect thereto. Lenders may add any amounts so expended
to the Obligations and charge Borrower's account therefor, such amounts to
be repayable by Borrower on demand. Lenders shall be under no obligation to
effect such cure, payment or bonding and shall not, by doing so, be deemed to
have assumed any obligation or liability of Borrower. Any payment made or
other action taken by Lenders under this Section shall be without prejudice
to any right to assert an Event of Default hereunder and to proceed accordingly.
ARTICLE III REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Lenders as follows:
3.1 Corporate Existence and Power; Name; Chief Executive
Office; Inventory and Equipment Locations. Borrower is a corporation duly
incorporated, validly existing and in good standing under the laws of the
State of Delaware. Borrower has all requisite power and authority, corporate
or otherwise, to conduct its business, to own its properties and to execute
and deliver, and to perform all of its obligations under, the Loan Documents.
The principal place of business of Borrower is located at 00000 Xxxxxxx Xxxxx,
Xxxxx 000, Xxxxxx, XX 00000, and all Records are kept at that location.
3.2 Qualification. Borrower is in good standing and is qualified to
do business in all states and locations where qualifications are necessary
and failure to so qualify would preclude it from enforcing its rights with
respect to any material asset, expose it to any material liability or have
a material adverse effect on its business.
3.3 Authorization of Loans, etc. The execution, delivery and
performance of the Loan Documents by Borrower (a) have been duly authorized
by all requisite corporate action (no shareholder action being required
pursuant to applicable law) and (b) will not (i) violate (y) any provision
of law, rule, regulation or order of any governmental authority or the
Articles of Incorporation or Bylaws of Borrower or (z) any provision of
any indenture, agreement or other instrument to which Borrower is party or
by which Borrower or any of its properties or assets are bound (ii) be in
conflict with, result in a breach or constitute (with due notice or lapse of
time or both) a default under any such indenture, agreement or other
instrument, or (iii) result in the creation or imposition of any Lien upon
any of the properties or assets of Borrower other than as permitted by the
terms hereof.
3.4 Title to Assets. Except for the Security Interest granted to
Lenders hereunder, Borrower has good and marketable title to all of its
property and assets free and clear of all other Liens.
3.5 Priority Security Interest. The Security Interest granted to
Lenders hereunder has priority over all other Liens on the Collateral and is
a valid, enforceable, perfected (to the extent capable of perfection by filing)
unavoidable first priority security interest in all personal property of
Borrower.
3.6 Legal Agreements. This Agreement and the other Loan Documents,
upon execution by the respective parties, will constitute the legal, valid and
binding obligations of Borrower, enforceable against Borrower and all its
successors and assigns, including any bankruptcy trustee or examiner, in
accordance with their respective terms.
3.7 Statements. All statements, written or oral, which Borrower has
made or provided to Lenders in connection with any Loan Document, taken as a
whole, contain no untrue statement of a material fact and do not omit stating
a material fact necessary to make such statements not misleading.
3.8 No Default. No Default or Event of Default has occurred and is
continuing, and no such Default or Event of Default will occur as a result
of the execution and delivery of this Agreement and other Loan Documents.
3.9 Compliance. (i) Borrower is in compliance with all applicable
law, rules, regulations and ordinances of any governmental authority having
jurisdiction over its business operations; and (ii) Borrower is in compliance
with all contracts to which it is a party.
ARTICLE IV COVENANTS
Borrower covenants, for so long as any of the principal amount of or
interest on the Notes is outstanding and unpaid or any duty or obligation of
the Borrower hereunder or under any of the other Obligations remains unpaid
or unperformed as follows:
4.1 Affirmative Covenants.
4.1.1 Financial Statements and Other Information. Borrower
shall deliver to Lenders, within sixty (60) Days from the end of each
calendar year, internally prepared financial statements.
4.1.2 Taxes and Other Claims. Borrower shall file when due
all required tax returns, shall pay when due all taxes, including without
limitation, payroll, real and personal property taxes, sales taxes,
assessments and other governmental charges levied or imposed upon it or
upon its income or profits or upon any of its property, and shall pay when
due all lawful claims for labor, materials and supplied which, if unpaid,
might become a Lien upon any property of Borrower; provided, that Borrower
shall not be required to pay any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested by Borrower in good
faith in appropriate proceedings, provided that adequate reserve has been
set aside for the amount in question.
4.1.3 Insurance. Borrower shall obtain and maintain, to the
extent of Lenders' interests, insurance in such amounts and with such coverage
as is reasonably necessary for the operation of Borrower's business. In the
event Borrower fails to pay any premium on any such insurance, Lenders may do
so (but shall not be obligated to do so), and Borrower shall reimburse
Lenders for any such payment on demand.
4.1.4 Corporate Existence; Compliance with Laws. Borrower shall
preserve and maintain its corporate existence and all of its rights,
privileges, licenses, permits and franchises, and shall comply with all
applicable laws, regulations and ordinances, including without limitation,
Environmental Laws and laws relating to ERISA, applicable to Borrower, the
operation of its business and such licenses, permits and franchises.
4.1.5 Further Assurances; Initial Collateral Documents. Borrower
shall, at its cost and expense, execute, acknowledge and deliver and cause to
be executed, acknowledged and delivered, to Lenders all such instruments,
including without limitation, financing statements, assumptions and
continuation statements, and take all such other action as Lenders may from
time to time request for the purpose of further assuring to Lenders the
security for the Obligations provided for, or intended to be provided for,
in this Agreement and the other Loan Documents and to confirm the Obligations.
Further, to the extent Borrower acquires from time to time any additional
property within the definition of the term "Collateral," Borrower shall
immediately execute and delivery to Lenders such documents as are necessary
to grant to Lenders a valid and perfected first priority security interest
in such property.
4.2 Negative Covenants. Without the prior written consent of the
Lenders:
4.2.1 Liens. Borrower shall not create, incur, or permit to exist
in favor of any Person any Liens on any of its property now owned or hereafter
acquired.
4.2.2 Indebtedness; Guaranties. Borrower shall not guarantee,
endorse, assume, or otherwise become directly or contingently liable in
connection with any obligation of any other Person, except by the endorsement
of negotiable instruments by Borrower for deposit or collection or similar
transactions in the ordinary course of business.
4.2.3 Sale of Assets. Borrower shall not sell, lease, assign,
transfer, or otherwise dispose of all or a substantial part of its assets
(whether in one transaction or in a series of transactions) to any Person
unless the Obligations shall be paid in full.
4.2.4 Dividends; Capital Stock. Borrower shall not declare or
pay, directly or indirectly, any dividends or make any other distribution or
payment, whether in cash, property, securities or a combination thereof, with
respect to (whether by reduction of capital or otherwise) any shares of
capital stock (or any options, warrants, rights or other equity securities
or agreements relating to any capital stock), or set apart any sum for the
aforesaid purposes unless the Obligations shall be paid in full.
4.2.5 Consolidation and Merger; Asset Acquisition. Borrower
shall not consolidate with or merge into any Person, or permit any other
Person to merge into it, or acquire (in a transaction analogous in purpose
or effect to a consolidation or merger) all or substantially all the
assets of any other Person.
4.2.6 Salaries. Borrower shall not pay excessive or unreasonable
salaries, bonuses, commissions, consultant fees or other compensation.
ARTICLE V
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
5.1 Events of Default. The occurrence of any of the following events
shall constitute an "Event of Default":
5.1.1 Monetary Default. If Borrower shall default in any payment
of (i) the principal of or interest on the Loan or (ii) any of the other
Obligations (after three (3) days' written notice) on the Due Date thereof,
whether at maturity, by acceleration or otherwise; or
5.1.2 Non-Monetary Default. If after ten (10) days' written
notice, Borrower shall fail to cure any default in the performance of or
compliance with any term or covenant contained in this Security Agreement,
other than a term or covenant a default in the performance of which or non-
compliance with which is elsewhere specifically dealt with under this Article
V; or
5.1.3 Invalidity Assertion. If Borrower in any pleading filed in
any court asserts that any material provision in any of the Loan Documents is
invalid or not binding on Borrower; or
5.1.4 Termination, etc. of Security Interest. Except for the
termination of the Security Interest upon payment and performance in full
of all of the Obligations as provided herein, if the Security Interest
shall terminate or otherwise cease for any reason to be in full force and
effect.
5.2 Rights and Remedies. Upon the occurrence of an Event of Default,
and at any time thereafter during the continuance of such event, Lenders, or
any of them, may take any or all of the following actions, at the same or
different times, all of which are cumulative and nonexclusive:
(a) declare the Obligations to be forthwith due and payable,
whereupon the same shall become and be forthwith due and payable, without
presentment, demand, protest, notice of acceleration, notice of intent to
accelerate or other notice of any kind, all of which are hereby expressly
waived, anything in this Security Agreement to the contrary notwithstanding;
(b) request Borrower to assemble at its expense the Collateral
and make it available to Lenders at a convenient place acceptable to Lenders
and, upon making of said request, Borrower shall promptly comply with said
request;
(c) give notice to and make demand upon all Account Debtors to
make payments directly to Lenders on all Accounts;
(d) seize and take possession of the Collateral and dispose of
same under the UCC or otherwise (or to have a receiver appointed for such
purpose) and, in such case, if any notice is required under applicable law,
the giving of five (5) business days' written notice to Borrower at its
address set forth herein shall constitute reasonable notice to Borrower;
provided, however, Lenders shall not by virtue of this Security Agreement
be obligated to give any such notice to Borrower, and Borrower expressly
authorizes Lenders to enter upon all property owned by Borrower for the
purpose of taking into custody and seizing any and all of the Collateral;
(e) exercise any and all rights or remedies contained in this
Security Agreement or any Loan Document; and
(f) exercise any and all rights and remedies available to
Lenders under the UCC and any other applicable law.
All recoveries distributed to the Lenders shall be divided among
them as follows:
(i) First, to the holders of the Class A-1 Secured Promissory Notes,
in proportion to the amounts owing to each of them;
(ii) Second, to the holders of the Class A-2 Secured Promissory Notes, in
proportion to the amounts owing to each of them; and
(iii) Third, to the holders of the Class B Secured Promissory Notes, in
proportion to the amounts owing to each of them.
5.3 Application of Proceeds on Default. Upon the occurrence of an
Event of Default, all Proceeds shall be applied to the outstanding Obligations,
at the Lenders' sole and absolute discretion, without any marshalling of
assets (i) first to the expenses of retaking and preparing the Collateral
for sale, including expenses of sale, (ii) next to other costs and attorneys'
fees incurred by Lenders in exercising rights under this Security Agreement
or any of the other Loan Documents, and (iii) next to the payment of interest,
fees and principal due on the Obligations in proportion to the amounts owed
to the Lenders, in the order specified in Section 5.2, above. Should any
deficiency result after disposition of the Collateral, Borrower shall remain
liable for any deficiency. Any amounts remaining after such payment in full
shall be remitted to Borrower.
5.4 Financing Statements; Direct Payments; Confirmation of
Accounts and Audit Rights. Borrower hereby authorizes Lenders to file and
maintain UCC financing statements and any amendments thereto or continuations
thereof and any other appropriate security documents or instruments and to
give any notices necessary or desirable to perfect the Security Interest,
in all cases without the signatures of Borrower or with the signature by
Lenders as attorney-in-fact for Borrower. Lenders will provide Borrower
with notice simultaneously with any such filings made or notices given by
Lenders; however, failure by Lenders to provide such notice to Borrower
shall not affect the validity of such filings or notices. Borrower further
authorizes Lenders upon the occurrence of an Event of Default, to notify any
Account Debtors that all sums payable to Borrower and relating to the
Collateral shall be paid directly to Lenders and to confirm with any Account
Debtors the amounts payable by them to Borrower with regard to the Collateral.
ARTICLE III MISCELLANEOUS
6.1 Waiver and Amendment. No provision of this Security Agreement or
any Loan Document or writing contemplated hereby can be waived, modified,
amended, abridged, supplemented or terminated, except by a writing executed by
Lenders. No delay or failure by Lenders to exercise any right or remedy shall
be a waiver thereof, nor shall any single or partial exercise by Lenders of
any right or remedy preclude any other exercise thereof or the exercise of any
other right or remedy. All rights and remedies of Lenders under this Security
Agreement and any other writing are cumulative and not exclusive.
6.2 Costs and Expenses. Borrower shall pay, or shall reimburse Lenders
for, and shall indemnify and save Lenders harmless against liability for the
payment of all reasonable legal fees and expenses (whether incurred at trial,
on rehearing, retrial or appeal, in any bankruptcy proceeding or otherwise)
of counsel to Lenders, in connection with enforcement of this Security
Agreement, the Notes or any of the other Loan Documents, provided Lenders
are the prevailing party.
6.3 Addresses. All notices, requests, demands and other communications
provided for under this Security Agreement and the writings contemplated by
this Security Agreement shall be in writing and shall be delivered in person,
deposited in the mail postage prepaid, via overnight courier or by facsimile
addressed as follows:
If to Borrower:
Neometrix Acquisition I, Inc.
00000 Xxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000
Attention: President
Facsimile: (000) 000-0000
with a copy to:
Xxxxx Xxx, Esq.
New Venture Attorneys
00000 Xxxxxxx Xxx
Xxxxx 000
Xxxxxx, XX 00000
Facsimile: (000) 000-0000
If to Lenders:
At the address for each shown on the signature page of this Security Agreement
or, as to each party, at such other address as shall be designated by such
party in a written notice to the other party complying as to delivery with
the terms of this Section. All such notices, requests,
demands and other communications shall be effective when actually delivered,
deposited in the mail or with overnight courier service or faxed.
6.4 Binding Effect and Assignment. This Security Agreement and the
other writings contemplated by this Security Agreement shall be binding upon
and inure to the benefit of the parties hereto and thereto and their
respective successors and assigns including, but not limited to, any
bankruptcy trustees or examiners, except that Borrower shall have no
right to assign any of its rights hereunder or thereunder or any interest
herein or therein without the prior written consent of Lender. If any
provision or application of this Security Agreement, the Notes, or any other
writing contemplated hereby is held unlawful or unenforceable in any respect,
such illegality or unenforceability shall not affect the other provisions
or applications which can be given effect, and this Security Agreement
and such writings shall be construed as if the unlawful or unenforceable
provision or application had never been contained herein or therein or
prescribed hereby or thereby.
6.5 No Third Party Beneficiaries. The parties intend that this
Security Agreement is solely for their benefit and no Person not a party
hereto shall have any rights or privileges under this Security Agreement
whatsoever either as a third party beneficiary or otherwise.
6.6 Prior Agreements. This Security Agreement represents the entire
agreement of the parties with regard to the subject matter hereof and the
terms of any letters and other documentation entered into between Borrower
and Lenders prior to the execution of this Security Agreement shall be
replaced by the terms of this Security Agreement. Notwithstanding the
foregoing, nothing contained herein shall be deemed to replace or supersede
the terms of the Notes or other Loan Documents.
6.7 Term. This Security Agreement and the rights and privileges
granted hereunder to Lenders, including without limitation, the Security
Interest, shall continue and remain in full force and effect until all of
the Obligations have been paid and performed in full. At such time as the
foregoing conditions are met, Lenders shall execute a termination statement
in regard to any Financing Statement filed by Lenders. Until each of the
conditions set forth above regarding the term of this Security Agreement is
met, the Security Interest shall continue to secure all of the Obligations.
6.8 Survival of Agreement, Representations and Warranties, etc. All
warranties, representations and covenants made herein by Borrower or in any
certificate or other instrument delivered by it or on its behalf in connection
with this Security Agreement shall be considered to have been relied upon by
Lenders and shall survive and shall continue in full force and effect so long
as any amount due or to become due hereunder is outstanding and unpaid.
All statements in any such certificate or other instrument shall constitute
representations and warranties by Borrower.
6.9 Headings. Article and Section headings in this Security Agreement
are for convenience of reference only, and shall not constitute a part of this
Security Agreement for any other purpose or a limitation of the scope of the
particular Articles or Sections to which they refer.
6.10 Severability. Any provision of this Security Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
6.11 Execution in Counterparts. This Security Agreement may be
executed in any number of counterparts, each of which shall constitute an
original, but all of which taken together shall constitute one and the
same instrument.
6.12 Time of the Essence. Time is of the essence of this Security
Agreement, the Notes and the other Loan Documents.
6.13 Construction of Agreement. If in the event it is ever necessary
to construe this Security Agreement, it will be construed without giving any
effect as to which party drafted this Security Agreement, the parties having
agreed that each party, with the benefit of counsel, has reviewed and
participated in the preparation of this Security Agreement.
6.14 Governing Law. This Security Agreement and the other Loan
Documents shall be governed by and construed in accordance with the laws
of the State of Florida.
IN WITNESS WHEREOF, the parties have executed this Security Agreement
on the date first above written.
"BORROWER"
NEOMETRIX ACQUISITION I, INC., a Delaware
corporation
By:_______________________________________
Its:
"LENDERS"
__________________________________________
Name:
(Please Print)
EXHIBIT I
GUARANTY
THIS GUARANTY ("Guaranty") is given by NEOMETRIX TECHNOLOGY
GROUP, INC., a Delaware corporation, as its address 00000 Xxxxxxx Xxxxx, Xxxxx
000, Xxxxxx, XX 00000 (the "Guarantor"), to each holder of the Class A-1 and
Class A-2 Secured Promissory Notes of NEOMETRIX ACQUISITION I, INC., a Delaware
corporation (each, a "Holder" and collectively, the "Holders").
R E C I T A L S:
A. Guarantor and Zeosoft Corporation, a Florida corporation ("Zeosoft"),
are parties to an Asset Acquisition Agreement ("Asset Agreement") pursuant
to which Zeosoft has sold substantially all its assets to Neometrix
Acquisition I, Inc., a Delaware corporation ("Debtor") that is a subsidiary
of Guarantor. Debtor has agreed to assume certain indebtedness owed by
Zeosoft to the holders of Zeosoft Notes (as that term is defined in the Asset
Agreement). Debtor is issuing its Class A-1 and Class A-2 Secured Promissory
Notes in replacement of the Zeosoft Notes. Guarantor has agreed to guarantee
payment of the Class A-1 and Class A-2 Secured Promissory Notes issued by
Debtor.
B. Holders would not lend money to Debtor and accept its Class A-1 and
Class A-2 Secured Promissory Notes Note except for the execution and delivery
of this Guaranty by Guarantor; and
C. Guarantor has received and reviewed a copy of the Class A-1 and
Class A-2 Secured Promissory Notes.
THEREFORE, for good and valuable consideration, including the Holders
lending money to Debtor, the Guarantor agrees as follows:
Recitals. The above recitals are true and correct and are a part of this
Guaranty.
Guaranty. The Guarantor, for itself and its successors and assigns, guaranties
the prompt payment when due of all payments under the Class A-1 and Class A-2
Secured Promissory Notes issued by Debtor, and the prompt performance of all
terms, conditions, and covenants on the part of Debtor to be performed under
the Note.
Performance Guaranty. In the event that the Debtor fails to pay sums when due
under the Class A-1 and Class A-2 Secured Promissory Notes, the Guarantor will
promptly and fully pay such amounts in the place and stead of the Debtor and
shall promptly perform any other terms, conditions, and covenants on the part
of Debtor to be performed under the Class A-1 and Class A-2 Secured Promissory
Notes. The Guarantor shall pay, reimburse and indemnify the Holders from any
and all damages, costs, expenses, losses and other liabilities arising or
resulting from the failure of the Debtor to pay the Class A-1 and Class A-2
Secured Promissory Notes when due or the failure of Debtor to otherwise
perform under the Class A-1 and Class A-2 Secured Promissory Notes.
Waiver of Notices. Without notice to or further assent from the Guarantor,
any Holder may waive or modify any of the terms or conditions of the Class
A-1 and Class A-2 Secured Promissory Notes or related Debtor obligations; or
compromise, settle or extend the time of payment of any amount due from the
Debtor or the time of performance of any obligation of the Debtor. These
actions may be taken by the Holder without discharging or otherwise affecting
the obligations of the Guarantor.
Unconditional Obligations. The Holders shall not be required to pursue any
remedies they may have against the Debtor or against any collateral as a
condition to enforcement of this Guaranty, nor shall the Guarantor be
discharged or released by reason of the discharge or release of the Debtor
for any reason, including a discharge in bankruptcy, receivership or other
proceedings, a stay or other enforcement restriction, or any other reduction,
modification, impairment, or limitations of the liability of the Debtor.
Binding Effect. This Guaranty is binding upon the Guarantor, its legal
representatives and assigns, and is binding upon and shall inure to the
benefit of the Holders and each of them, and their respective successors and
assigns. No assignment or delegation by the Guarantor shall release the
Guarantor of its obligations under this Guaranty.
Modifications. This Guaranty may not be modified orally, but only in writing
signed by both the Guarantor and each Holder. Modifications include any waiver,
change, discharge, modification or termination.
IN WITNESS WHEREOF the Guarantor has duly signed this Guaranty on the date
stated below.
Witnesses: GUARANTOR:
NEOMETRIX TECHNOLOGY GROUP, INC., a
Delaware corporation
By____________________________
STATE OF FLORIDA
COUNTY OF HILLSBOROUGH
The foregoing instrument was acknowledged before me this 1st day of April,
2003, by
__________________, as ______________ of NEOMETRIX TECHNOLOGY GROUP, INC., a
Delaware corporation. He has produced _____________ as identification.
_____________________________________________
NOTARY PUBLIC
SCHEDULE 1.01(a)
PATENTS, TRADEMARKS, AND APPLICATIONS
The following trademarks have been applied for:
ZeoSphere
ZeoFusion
On Demand Mobile Server Networks
On Demand Mobile Servers
Seller is the owner of the following patent and patent applications:
Patent No. 6,125,363 (entitled "Distributed Multi-threaded Application
Development System and Method")
Patent Application Serial No. 09/670,988 (entitled "Distributed
Multi-threaded Application Development System and Method"), filed 9/26/00
Provisional Patent Application No. 60/337,579 (entitled "System for
Development, Management, and Operation of Distributed Clients and Servers"),
filed 10/26/01
Non-provisional Patent Application No. 10/268,924 (entitled "System for
Development, Management, and Operation of Distributed Clients and Servers"),
filed 10/11/02
SCHEDULE 1.01(j)
LIST OF LEASED ASSETS
All computers, monitors, printers, and other peripherals
All desks, chairs, file cabinets, and office furniture
Conference table and chairs
All cubicles
Telephone system, switching equipment, telephones, and fax machines
Microwave and refrigerator
All leasehold improvements
SCHEDULE 1.02
ASSUMED OBLIGATIONS
Buyer will assume the following obligations of Seller and no others:
1. The Zeosoft Notes described in Sections 2.02 (e), (g), and (h) of the
Agreement.
2. All costs, liabilities, and obligations associated with Seller's lease
of real property in Scottsdale, AZ.
3. All costs, liabilities, and obligations associated with Seller's lease
of real property in Parsippany, NJ.
4. All costs, liabilities and obligations associated with payroll for
the current payroll period, determined as of the Closing Date (subject to
Seller's agreement contained in section 2.03 to pay all payroll obligations
through March 31, 2003).
5. All costs, liabilities and obligations associated with current ordinary
course accounts payable, determined as of the Closing Date (subject to Seller's
agreement contained in section 2.03 to pay all such bills received prior to
the Effective Time and the $10,000 limitation [not applicable to Assumed
Obligations] contained in Section 2.03).
SCHEDULE 4.02
SHARE RESTRICTIONS, ETC.
Neometrix has outstanding 200,000 options to purchase common stock.
SCHEDULE 4.03
FINANCIAL STATEMENT EXCEPTIONS
None.
SCHEDULE 4.04
TAX EXCEPTIONS
Federal and state income tax returns for FYE 2002 are unfiled. Extensions
have been procured.
SCHEDULE 4.05
INSURANCE
None.
SCHEDULE 4.06
LEGAL PROCEEDINGS
Theater Radio Network has sued Neometrix in the 13th Judicial Circuit of
Florida, seeking damages for breach of contract. Neometrix is vigorously
defending the claims.
SCHEDULE 4.07
LIENS AND ENCUMBRANCES
None.
SCHEDULE 4.08
REAL PROPERTY LEASES
None.
SCHEDULE 4.14
MATERIAL CONTRACTS
The State of Maryland, City of Baltimore, and Baltimore City School System
are all significant customers.
SCHEDULE 4.15
EMPLOYEE BENEFITS PLANS
None.
SCHEDULE 4.16
INTELLECTUAL PROPERTY EXCEPTIONS
None.
SCHEDULE 5.02
FINANCIAL STATEMENT EXCEPTIONS
None.
SCHEDULE 5.03
TAX EXCEPTIONS
Zeosoft has not filed its federal or state income tax returns for 2002. Those
returns are on extension.
SCHEDULE 5.04
INSURANCE
Zeosoft maintains a hazard insurance policy having coverage limits of $350,000
(blanket premises), and $200,000 (personal property), and supplementary
coverages. Zeosoft maintains a commercial and products liability policy having
coverage limits of $5,000,000 (aggregate). Zeosoft also maintains workers'
compensation and employer liability policies in each state where it is
required to do so.
SCHEDULE 5.05
LEGAL PROCEEDINGS
Zeosoft is a named defendant in the case Sky Peak, LLC x. Xxxxxx, Inc. et al.,
Case No. CV 01-012656, pending in the Maricopa County, Arizona Superior Court.
SCHEDULE 5.06
LIENS AND ENCUMBRANCES
The holders of the Zeosoft Notes have a blanket lien on all of Zeosoft's
assets, securing payment of the Zeosoft Notes. In the legal proceeding
described in Schedule 5.05, Sky Peak, LLC claims a lien on certain tangible
personal property that will be leased to Buyer.
SCHEDULE 5.07
REAL PROPERTY LEASES
Zeosoft leases real property in Scottsdale, Arizona from B-H Associates.
Zeosoft leases real property located in Parsippany, New Jersey from Boulevard
Plaza Associates.
SCHEDULE 5.13
MATERIAL CONTRACTS
Zeosoft's material contracts consist of the leases set forth in Schedule 2.8,
the Zeosoft Notes, the Security Agreement securing payment of the Zeosoft
Notes, the Software License Agreement with Phoenix Rsmart Group, Inc., and a
number of contracts Zeosoft has with various third-party software vendors and
equipment maintenance vendors. Zeosoft is not in default under any of its
contracts; however, Phoenix Rsmart Group, Inc. is in default under its contract
with Zeosoft, for failure to pay minimum royalties thereunder. Phoenix
Rsmart Group, Inc. has notified Zeosoft that it has not completed
development of its software and is unable to offer a timetable for such
completion. Zeosoft has not yet decided whether to exercise any remedies
under the License Agreement.
SCHEDULE 5.14
INTELLECTUAL PROPERTY EXCEPTIONS
Zeosoft has an agreement with IBM that permits Zeosoft to add IBM's JV2
software for hand-held devices to its products. Zeosoft has not yet made
use of the IBM software, but may do so in the future. Zeosoft has an
agreement with Savaje Technologies to use Savaje's development software
for hand-held devices. Zeosoft has not yet made use of the Savaje software,
but may do so in the future.
