ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (the "Agreement") is made as of October 3,
2005 by and among Tectonic Network, Inc., a Delaware corporation and its
subsidiary Tectonic Solutions, Inc., a Georgia corporation, debtors and
debtors-in-possession in the Case (as defined below) (each a "Seller" and
collectively the "Seller"), and Boston Equities Corporation, a Nevada
corporation, or designee (the "Buyer"), with respect to the following facts:
A. Seller operates an information management services and software
development business with product and service offerings targeted to the
construction industry (the "Business").
B. On October 3, 2005 (the "Petition Date"), each Seller filed a Chapter
11 bankruptcy case in the United States Bankruptcy Court for the Northern
District of Georgia (the "Court"), Case No. 0578966-JEM (Tectonic Networks,
Inc.) and case No. 5578955-JEM (Tectonic Solutions, Inc.) (the "Bankruptcy
Case") and since that date, Seller has remained in possession and control of
each estate as a debtor-in-possession.
C. Seller desires to sell to Buyer and Buyer desires to acquire from
Seller substantially all of the tangible and intangible assets used in the
operation of the Business, on the terms and conditions set forth herein.
IN CONSIDERATION OF the premises and mutual covenants contained in this
Agreement, and for good and valuable consideration, the parties agree as
follows:
1. Purchase and Sale of Assets. On the Closing Date (as defined below), in
consideration of the covenants, representations and obligations of Buyer
hereunder, and subject to the conditions set forth in this Agreement, Seller
shall sell, assign, transfer, convey and deliver to Buyer, and Buyer shall
purchase from Seller all of Seller's right, title and interest as of the Closing
Date in and to the assets used by Seller in connection with the Business,
wherever located, tangible or intangible, (collectively, the "Assets"), free and
clear of all liens, security interests or other encumbrances of any character
whatsoever (the "Encumbrances") other than the Assumed Liabilities (as defined
in this Agreement). The Assets include, without limitation the following:
1.1 Leases and contacts. Seller's right, title and interest in:
(a) the leases for real property for the facilities located at 000
Xxxxxxxxx Xxxxxx Xxxxxxx, Xxxxx 000, Xxxxxxx XX 00000, and 0000 Xxxxx Xxxxxx,
#000 Xxxxxxxx, XX 00000 as more particularly described in Exhibit A (the "Real
Property Leases");
(b) the equipment and personal property leases, rental agreements
and similar agreements identified on Exhibit B (the "Personal Property Leases");
and
(c) those other specific contracts or agreements to which Seller is
a party that are identified on Exhibit C (the "Seller Contracts").
Notwithstanding the introductory language of Section 1 to the contrary,
(i) only the Real Property Leases, the Personal Property Leases and the Seller's
Contracts (collectively, the "Section 365 Agreements") shall be assumed by
Seller and assigned to Buyer pursuant to the provision of Section 365 of the
Bankruptcy Code, and (ii) Buyer hereby reserves the right not to assume any of
the Section 365 Agreements and to amend Exhibits A, B and C to delete any
Section 365 Agreement, which reservation of rights shall expire the day before
the Court hearing on the motion to approve the sale transactions contemplated by
this Agreement.
1.2 Personal Property. All of the fixtures, furniture, equipment and
tangible personal property used in connection with the Business, including those
items described on Exhibit D (the "Personal Property").
1.3 Intangible Property. All of Seller's intangible personal property used
in connection with the Business, including without limitation, all software,
patents, patent applications, trademarks, copyrights, trade secrets, licenses,
research, development, know-how inventions, technical information, tradenames,
registrations, service marks, applications with respect to any of the foregoing,
Seller's name, and other intangible rights and property owned or held by Seller,
including going concern value, goodwill, telephone, telecopy and e-mail
addresses and listings and those items specifically listed on Exhibit E,
customer and vendor lists, files, documents, books, records, computer programs,
advertising and sales materials, prepaid charges, and like items pertaining to
the Business, in each case whether owned by Seller or licensed to others,
together with all rights under or pursuant to all warranties, representations
and guarantees made by suppliers, manufacturers and contractors in connection
with products or services of the Business or affecting the Assets (collectively,
the "Intangible Property"). Notwithstanding the foregoing, the Intangible
Property shall not include: (i) any materials containing privileged
communications or information about employees, the disclosure of which would
violate an employee's reasonable expectation of privacy, or (ii) any other
materials which are subject to attorney-client or any other privilege or
requirement to maintain confidential; provided, however, that the Intangible
Property shall not include books and records related to the corporate existence
of the Seller .
1.4 Inventories. All supplies, goods, materials, work in process, raw
materials, inventory, and stock in trade owned by Seller that are used in or are
held for sale in connection with the Business.
1.5 Insurance. All liability insurance (including any premium refunds due
and owing thereunder now or after the date hereof) and any insurance proceeds,
claims and causes of action with respect to or arising in connection with the
Assets to the extent insuring Seller with respect to the Assumed Liabilities (as
defined below) assumed by Buyer to the extent assignable.
1.6 Deposits. Seller's right title and interest in all utility deposits,
deposits with trade creditors, security deposits and similar deposits with
landlords or other contracting parties under the Section 365 Agreements,
including without limitation those deposits identified on Exhibit F.
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2. Excluded Assets. Notwithstanding the foregoing, Buyer is not purchasing the
following (the "Excluded Assets"):
(a) those items excluded listed on Exhibit G;
(b) all cash, cash equivalents and short-term investments;
(c) all accounts receivable;
(d) the Section 365 Agreements terminated or expired prior to the
Closing Date in accordance with their terms or in the ordinary course of the
Business;
(e) all preference or avoidance claims and actions of Seller,
including without limitation, any such claims and actions arising under Sections
542, 543, 544, 545, 547, 548, 549, 550 and 553 of the Bankruptcy Code or under
comparable state law provisions;
(f) Seller's rights which accrue or will accrue under this Agreement
and all cash and non-cash consideration payable or deliverable to Seller
pursuant to the terms and provisions hereof;
(g) liability insurance (including any premium refunds due and owing
thereunder now or after the date hereof) and any insurance proceeds, claims and
causes of action with respect to or arising in connection with any assets that
are not Assets to the extent insuring Seller with respect to liabilities not
assumed by Buyer, including, without limitation, claims under any directors and
officers policy;
(h) all Inventory transferred or used by Seller in the ordinary
course of the Business from the date hereof prior to the Closing Date;
(i) all claims for refund of taxes and other governmental charges of
whatever nature; and
(j) all rights in any pre-petition retainer or professional fee
escrow held by or paid to any professional employed by Seller as set forth on
Exhibit G.
3. Assumed Liabilities. As of the Closing Date, subject to the terms of this
Agreement, Buyer shall assume and pay, perform, discharge and have
responsibility for the performance and satisfaction of the following liabilities
of Seller (collectively, the "Assumed Liabilities") as the same shall exist on
the Closing Date: (a) all executory obligations and liabilities of Seller
pursuant to the terms of the Section 365 Agreements arising after the Closing
Date; and (b) all costs and liabilities pro rated to Buyer as set forth in
Section 4 below. At the Closing, Seller shall cure any and all monetary defaults
and pay all unpaid payments and obligations owed under the Section 365
Agreements as of the date of the Closing (in the amounts as determined or
approved by the Court), as a condition of Buyer's assumption of the Section 365
Agreements. Buyer shall be solely obligated to discharge, pay, perform and
satisfy all of the duties, liabilities and obligations of Seller pursuant to or
under the Section 365 Agreements that first become due after the Closing Date.
Except as expressly provided in this Agreement or any document executed in
connection herewith, Buyer is not assuming any pre-Closing liabilities or
obligations of Seller under the Section 365 Agreements, or otherwise. At the
Closing, Seller shall assign its interests in the Section 365 Agreements
effective as of the close of business on the Closing Date. Buyer shall accept
the assignment and assume and be responsible for all obligations pursuant to the
Section 365 Agreements arising after the Closing Date. At the Closing, Buyer and
Seller shall execute an Assignment and Assumption Agreement in substantially the
form attached hereto as Exhibit H (the "Assignment Agreement"). Buyer is not
assuming any liabilities other than the Assumed Liabilities. Without limiting
the generality of the foregoing, will not be responsible for any obligations to
employees, including without limitation claims for unpaid wages, severance,
vacation pay, sick leave, any rights or obligations under any employment
agreements, whether or not in writing, and all rights in connection with and
assets of any employee benefit plans.
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4. Purchase Price.
4.1 Calculation of Purchase Price. The total consideration to be paid by
the Buyer for the Assets and the assumption of the Assumed Liabilities shall be
cash in the amount of $2,000,000 (the "Purchase Price") with a portion thereof
paid pursuant to an offset of amounts outstanding under the Senior Secured
Super-Priority Debtor-in-Possession Loan and Security Agreement of even date
herewith between Seller and Buyer (the "Loan Agreement").
4.2 Payments at the Closing. On the Closing Date, Buyer shall pay and
deliver the Purchase Price to Seller by wire transfer in the amount of the
Purchase Price less all amounts owed to Buyer under the Loan Agreement
(including unpaid principal and accrued and unpaid interest). Buyer shall also
deliver to Seller the original of the Promissory Note executed pursuant to the
Loan Agreement marked "Paid In Full". The portion of the Purchase Price due at
Closing shall have been deposited into escrow or into the Client Trust Account
of Xxxxx Xxxxxx LLP, attorneys for Buyer, prior to the hearing in the Bankruptcy
Case at which the Court will consider the motion for entry of an order approving
the sale of the Assets to Buyer and the transactions contemplated by this
Agreement (the "Sale Order"), and Buyer shall provide Seller with evidence
(reasonably acceptable to Seller) of such deposit prior to said hearing.
4.3 Allocation of Purchase Price Consideration. The Purchase Price shall
be allocated among the Assets as set forth on Exhibit I. Following the Closing,
Buyer and Seller (in connection with their respective U.S. Federal, State and
local income tax returns and other filings) shall not take any position
inconsistent with such allocation.
4.4 Taxes. Seller shall pay any and all sales, use, transfer or other tax
or similar charge due with respect to the transactions contemplated hereby.
Seller shall have the responsibility to collect the tax and file any required
tax reports or returns. Buyer represents to Seller that Buyer's purchase of any
Assets which are inventory, materials or work in process are purchased for
resale, and Buyer will sell such items pursuant to a reseller's license as
necessary in order to assure that the sale of any such items to Buyer is exempt
from sales tax.
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5. Closing Transactions.
5.1 Closing. The closing of the transactions provided for herein (the
"Closing") shall take place at the offices of Xxxxx Xxxxxx LLP, 0000 Xxxx
Xxxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, Xxxxxxx 00000.
5.2 Closing Date. Closing shall occur at such time as all conditions to
closing set forth in this Agreement have been met, but in no event later than:
two (2) business days after entry of the Sale Order and expiration of the stay
on the effectiveness of such Sale Order, whichever is later (the "Closing
Date"). The parties may mutually agree in writing on an earlier or later date.
Provided however that in no event shall Closing occur after December 31, 2005.
5.3 Seller's Deliveries to Buyer at Closing. Seller shall make the
following deliveries at Closing:
(a) The Assignment Agreement, duly executed by Seller, pursuant to
which Seller assigns the Section 365 Agreements to Buyer, and Buyer agrees to
perform and discharge the Assumed Liabilities and in respect thereof;
(b) A Xxxx of Sale in substantially the form attached hereto as
Exhibit J;
(c) Assignments, on the appropriate official forms, of any of
Seller's registered trademarks, copyrights or other intellectual property
transferred under this Agreement;
(d) Assignments, on the appropriate official forms, of any of
Seller's patents registered, transferred under this Agreement; and
(e) Such other documents as Buyer may reasonably request in form and
substance acceptable to Buyer.
5.4 Buyer's Deliveries to Seller at Closing. Buyer shall make the following
deliveries at Closing:
(a) Via wire transfer the amount of the Purchase Price to be paid at
Closing in accordance with Section 4.1 and 4.2, plus costs and prorations (the
"Prorations") to be paid to Seller under Section 5.5.
(b) The original promissory note under the Loan Agreement marked
"Paid in Full".
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(c) A counterpart original of the Assignment Agreement duly executed
by Buyer.
(d) If applicable, a certified copy of its resolution or consent
action authorizing the purchase of the Assets and an incumbency certificate and
such other organizational related documents as Seller shall reasonably request.
(e) Such other documents as Seller may reasonably request in form
and substance acceptable to Seller.
5.5 Prorations.
(a) Rental and lease charges related to the Section 365 Agreements,
current taxes related to the Real Property Leases or the Personal Property, or
other similar items of expense, and utilities related to the Real Property
Leases or the Personal Property (collectively, the "Proration Items") shall be
prorated between Seller and Buyer as of the Closing Date. All Proration Items
that represent obligations due or accrued in respect of periods prior to the
Closing shall be paid in full or otherwise satisfied by Seller, and all
Proration Items that represent obligations due and accrued in respect of periods
after Closing shall be paid in full or otherwise satisfied by Buyer.
(b) As soon as reasonably practicable after the Closing Date,
representatives of Seller and Buyer shall examine all relevant books and records
as of the Closing Date in order to make the determination of Proration Items
that were not settled at the Closing. Payments for taxes related to the Real
Property Leases and the Personal Property (the "Tax Item") shall be determined
based on the assumption that the tax obligations for the current year are one
hundred and five percent (105%) of the tax obligations for the prior year. The
parties expressly acknowledge and agree that the determination of the Tax Items
based on such assumption shall be final and binding on the parties, regardless
of the actual taxes that will be due and owing once the current year's tax bills
are rendered. Payments in respect of Proration Items shall be made to the
appropriate party by wire transfer within five business days after
determination.
(c) In the event that any party (the "Payor") pays a Proration Item
to which the other party (the "Payee") is obligated in whole or in part, the
Payor shall present to the Payee evidence of payment and a statement setting
forth the Payee's proportionate share of such Proration Item, and the Payee
shall promptly pay such share to the Payor. In the event that any party receives
payment of a Proration Item to which the other party is entitled in whole or in
part, under this Agreement, the receiving party shall promptly pay the other
party's share to the other party.
5.6 Possession. Right to possession of the Assets shall transfer to Buyer on the
Closing Date. Seller shall transfer and deliver to Buyer on the Closing Date
such keys, lock and safe combinations and other similar items as Buyer shall
require to obtain immediate and full occupation and control of the Assets, and
Seller shall also make available to Buyer at their then existing locations all
documents in Seller's possession that are required to be transferred to Buyer by
this Agreement, provided, however, that Seller may, for the express and limited
purpose of administering the Bankruptcy Case, retain a duplicate copy of all
files, papers, computer files, customer lists and records, advertising
materials, promotional materials, studies, reports and books and accounting and
business records of Seller in any medium relating to the Business or Assets with
costs and expenses for producing such duplicates to be paid by Seller . Seller
will treat all such records as confidential information of the Buyer and shall
use such information only for the purposes set forth above. Following the
termination of the Bankruptcy Case, Seller will return all such information to
Buyer or destroy all of the copies and provide Buyer with confirmation of the
destruction.
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6. Conditions Precedent to Closing
6.1 Conditions to Seller's Obligations. Seller's obligation to consummate
the transactions contemplated by this Agreement shall be subject to the
satisfaction or waiver by Seller of each of the following conditions:
(a) Buyer shall have performed in all material respects each of the
covenants and obligations to be performed by Buyer prior to the Closing.
(b) Buyer shall have executed and delivered to Seller all of those
documents, instruments and agreements required to be executed by Buyer to Seller
pursuant to Section 5.4 of this Agreement.
(c) Seller shall have either reached satisfactory agreements with
the other parties to the Section 365 Agreements as to the amounts owing
thereunder (the "Cure Amounts") as of the Closing Date and the nature and timing
of cures of any defaults thereunder, or Seller shall obtain an order of the
Court, as part of the approval of this Agreement, confirming that the cure
amounts estimated by Seller as set forth on Exhibit K are the cure amounts which
Seller must pay as a condition of Buyer's assumption of the Section 365
Agreements.
(d) No action, suit or proceeding shall have been commenced before
any court to restrain or prevent the carrying out of the transactions
contemplated by this Agreement.
(e) Seller and Buyer shall have agreed on mutually acceptable
procedures for the conduct of the sale of the Assets.
(f) This Agreement and the transactions contemplated herein shall
have been approved by the Court and the Court shall have entered the Sale Order
in the Bankruptcy Case so approving, concurrently with findings of fact and
conclusions of law to be contained in a separate document (the "Findings"), and
the Sale Order shall have become "final" unless, as part of the Sale Order, the
Court has expressly ordered that the Sale Order and matters approved therein are
expressly not stayed for the ten (10) day period after the Court's entry of the
Sale Order.
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6.2 Conditions Precedent to Buyer's Closing. Buyer's obligation to
consummate the transactions contemplated by this Agreement shall be subject to
the satisfaction or waiver by Buyer of each of the following conditions:
(a) Seller shall have performed in all material respects each of the
covenants and obligations to be performed by Buyer prior to the Closing.
(b) All representations and warranties of Seller as set forth herein
shall be true and accurate in all material respects as of the Closing.
(c) Seller shall have executed and delivered to Buyer all of those
documents, instruments and agreements required to be executed by Buyer to Seller
pursuant to Section 5.3 of this Agreement.
(d) All matters incident to the transactions contemplated hereby
shall be in form and substance satisfactory to Buyer and Buyer's counsel.
(e) No action, suit or proceeding shall have been commenced before
any court to restrain or prevent the carrying out of the transactions
contemplated by this Agreement.
(f) Seller and Buyer shall have agreed on mutually acceptable
procedures for the conduct of the sale of the Assets.
(g) This Agreement and the transactions contemplated herein shall
have been approved by the Court and the Court shall have entered an Sale Order
in the Bankruptcy Case so approving, concurrently with the "Findings", and the
Sale Order shall have become "final" unless, as part of the Sale Order, the
Court has expressly ordered that the Sale Order and matters approved therein are
expressly not stayed for the ten (10) day period after the Court's entry of the
Sale Order. The Sale Order and Findings shall have terms reasonably acceptable
to Buyer and Buyer's counsel, and shall provide among other things that the
Assets are transferred to Buyer free and clear of all Encumbrances and interests
(within the meaning of 11 U.S.C. ss. 363(f) and including without limitation all
claims, liens, encumbrances and successor liability other than the Assumed
Liabilities).
(h) There shall have been no materially adverse change in the
business, operations or prospects of the Business.
7. Seller's Representations and Warranties and Related Covenants. Seller makes
the following representations and warranties, which shall survive full execution
of this Agreement and which shall survive the Closing:
7.1 Organization. Seller is a corporation duly organized, validly existing
and in good standing under the jurisdiction of its organizations. Seller has all
requisite corporate power and corporate authority to own, lease and operate its
properties, to carry on the Business as now being conducted, except as limited
by the Bankruptcy Code. Upon obtaining the Sale Order, Seller shall have the
corporate power, and corporate authority to execute, deliver and perform this
Agreement and all documents and agreements related hereto.
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7.2 Valid Agreement. All corporate action on the part of Seller as a
debtor in possession necessary for the authorization, execution, and delivery of
this Agreement by Seller, has been, or will be by the Closing, duly taken. Upon
obtaining the Sale Order, this Agreement shall constitute the validity and
binding obligation of the Seller, enforceable in accordance with its terms.
7.3 No Conflicts. Upon obtaining the Sale Order, the execution and
delivery of this Agreement, the consummation of the transactions contemplated
hereby and the performance of, fulfillment of and compliance with the terms and
conditions hereof by Seller do not and will not: (i) conflict with or result in
a breach of the certificate of incorporation or bylaws of Seller; or (ii)
violate any statute, law, rule or regulation, or any order, writ, injunction or
decree of any court or governmental authority.
7.4 Title. Seller has good and marketable title to the Assets owned by
Seller and valid leasehold interests in the Assets leased by Seller. The Assets
constitute all of the assets necessary for the operation of the Business as
currently conducted by the Seller. There are no known or alleged liens,
interests, or other adverse claims affecting title to the owned Assets, whether
voluntarily or involuntary created, including tax liens, except for contractual
warranties on Seller Contracts which are being assumed. There are no known or
suspected arbitrations, lawsuits, civil, criminal or administrative proceedings,
adversary proceedings or other actions pending or threatened known to Seller
which relate to title to, or any claimed interest in, the Assets. At the
Closing, Buyer will acquire all of Seller's right, title and interest in and to
all of the Assets free and clear of any liens and encumbrances to the extent so
provided in the Sale Order.
7.5 No Infringement. To the knowledge of Seller, there is no infringement
or alleged infringement by Seller on any patent, trademark, or copyright,
registered or unregistered, which relates to the software, patents, trademarks,
copyrights or any of the intangible property used in the operation of the
Business. Seller has not received any written citation, violation notice or
similar notice of any such claimed infringement.
7.6 No Violations of Law. Except as set forth on EXHIBIT L to the
knowledge of Seller there is no known or alleged infringement of any law
affecting any of the Assets or the operation of the Business, including OSHA,
building code, zoning violations, health and safety regulations, past or present
and Seller has not received any written citation, violation notice or similar
notice of any such claimed violation.
8. Indemnification and Related Matters.
8.1 Indemnification by Seller. Subject to the provisions of this Article
8, Seller, for a period of 180 days after the Closing Date, agrees to indemnify,
defend and hold Buyer and each director, officer, employee, stockholder, partner
or affiliate thereof harmless from and against:
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(a) any and all liabilities, obligations, damages and expenses
resulting from the failure of Seller to comply in all material respects with any
of the covenants contained in this Agreement which are required to be performed
by Seller after the Closing Date;
(b) the breach of any representation or warranty contained in this
Agreement;
(c) any and all third party claims for liabilities, obligations,
damages and expenses relating to Seller's ownership or management of the
Business or the Assets (other than the Assumed Liabilities); and
(d) all actions, suits, proceedings, costs and expenses, including
reasonable attorneys' fees, incident to the foregoing.
8.2 Indemnification by Buyer. Subject to the provisions of this Article 8,
Buyer, for a period of 180 days after the Closing Date, agrees to indemnify and
hold Seller and each director, officer, employee, stockholder, partner or
affiliate of Seller harmless from and against:
(a) any and all liabilities, obligations, damages and expenses
resulting from the failure of Buyer to comply in all material respects with any
of the covenants contained in this Agreement which are required to be performed
by Buyer;
(b) any and all third party claims for liabilities, obligations,
damages and expenses relating to Buyer's ownership or management of the Business
or the Assets; and
(c) all actions, suits, proceedings, costs and expenses, including
reasonable attorneys" fees, incident to the foregoing.
8.3 Notice of Indemnification. In the event any legal proceeding is
threatened or instituted or any claim or demand is asserted by any person
(including a party hereto) in respect of which payment or other indemnification
may be sought by one party hereto from the other party under the provisions of
this Article 8, the party seeking indemnification ("Indemnitees") will promptly
cause written notice of the assertion of any such claim of which it has
knowledge which is covered by this indemnity to be forwarded to the other party
("Indemnitor"). Any notice of a claim by reason of any of the representations,
warranties or covenants contained in this Agreement will state specifically the
representation, warranty or covenant with respect to which the claim is made,
the facts giving rise to an alleged basis from the claim, and the amount of the
liability asserted against the Indemnitor by reason of the claim.
8.4 Indemnification Procedure for Third-Party Claims. In the event of the
initiation of any legal proceeding against an Indemnitee by a third party, the
Indemnitor will have the absolute right after the receipt of notice, at its
option and at its own expense, to be represented by counsel of its choice, and
to defend against, negotiate, settle or otherwise deal with any proceeding,
claim, or demand which relates to any loss, liability or damage indemnified
against hereunder; provided, however, that the Indemnitee may participate in any
such proceeding with counsel of its choice and at its expense. The parties will
cooperate fully with each other in connection with the defense, negotiation or
settlement of any such legal proceeding, claim or demand. To the extent the
Indemnitor elects not to defend such proceeding, claim or demand, and the
Indemnitee defends against or otherwise deals any such proceeding, claim or
demand, the Indemnitee may retain counsel, at the expense of the Indemnitor, and
control the defense of such proceeding. Neither the Indemnitor nor the
Indemnitee may settle any such proceeding without the consent of the other
party, such consent not to be unreasonably withheld. After any final judgment or
award has been rendered by a court, arbitration board or administrative agency
or competent jurisdiction and the time in which to appeal therefrom has expired,
or a settlement has been consummate, or the Indemnitee and the Indemnitor have
arrived at a mutually binding agreement with respect to each separate matter
alleged to be indemnified by the Indemnitor hereunder, the Indemnitee will
forward to the Indemnitor notice of any sums due and owing by it with respect to
such matter and the Indemnitor will pay all of the sums so owing to the
Indemnitee by wire transfer, certified or bank cashier's check within thirty
(30) days after the date of such notice.
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9. Conduct Prior to Closing.
9.1 Access to Information. Between the date of this Agreement and the
Closing Date, and upon reasonable advance notice received from Buyer, Seller
shall (a) afford Buyer and its representatives full and free access, during
regular business hours, to Seller's personnel, properties, contracts, books and
records and other documents and data, in each case, related to the Business,
such rights of access to be exercised in a manner that does not unreasonably
interfere with the operations of Seller; (b) furnish Buyer with copies of all
such contracts, books and records and other existing documents and data, in each
case, related to the Business, as Buyer may reasonably request; (c) furnish
Buyer with such additional financial, operating and other relevant data and
information, in each case, related to the Business, as Buyer may reasonably
request; and (d) otherwise cooperate and assist, to the extent reasonably
requested by Buyer, with Buyer's investigation of the properties, assets and
financial condition related to Seller's Business.
9.2 Operation of the Business Pending Closing. From the date of this
Agreement through the Closing Date, Seller shall operate the Business in the
usual and ordinary course, consistent with past practice in all material
respects, subject to compliance with the Bankruptcy Code, any orders entered by
the Court in the Bankruptcy Case and applicable law. Notwithstanding the
foregoing, Seller may take actions to reduce employments and to shut down
locations under leases for real property that are not part of the Real Property
Leases being transferred hereunder.
9.3 Seller's Employees. At any time and from time to time up to the
Closing, Buyer may interview any of Seller's employees, and in connection
therewith, Buyer may in its sole discretion, offer employment to any such
employees to commence after the Closing Date on such terms and conditions as
Buyer, in its discretion, shall determine. Seller shall make reasonable efforts,
as requested by Buyer, to cooperate with Buyer in its efforts to interview and
retain such employees. Buyer will be responsible for any employment agreements
made with Seller's former employees commencing after the Closing Date. Buyer is
not assuming any liabilities with respect to Seller's employees prior to the
Closing Date. Seller represents that it has not taken, and the transactions
contemplated by this Agreement will not constitute, a plant closing or mass lay
off within the meaning of the Worker Adjustment and Retraining Notification Act
(the "WARN Act"). Seller shall be responsible for any liabilities arising under
the WARN Act, or any similar state law.
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9.4 Bankruptcy Approval.
(a) As promptly as practicable after the date hereof but in no event
later than October 7, 2005 Seller will file motions with the Court seeking (i)
an order in form satisfactory to Buyer authorizing performance by Seller of its
obligations under Sections 9.5, 9.6 and 9.7 of this Agreement, setting the sale
hearing date and notice requirements for the motion for the Sale Order, and
authorizing sale of the Assets pursuant to Section 363 of the Bankruptcy Code
("Preliminary Order") and (ii) the Sale Order which shall, among other things,
compel a change of name of Seller to a name that does not include "Tectonic" or
any similar name, provided, however, that Seller may, where necessary, state
that it was formerly known as Tectonic. Seller will promptly make any filings,
take all actions and use its best efforts to obtain any and all other approvals
and orders necessary or appropriate for the consummation of the transactions
contemplated hereby. The Sale Order will, among other provisions reasonably
required by Buyer, contain a finding that the Buyer is a buyer in good faith
within the meaning of Section 363(m) of the Bankruptcy Code, and will grant the
parties relief from stay in the performance of all provisions of this Agreement.
(b) If the Preliminary Order, the Sale Order or any other orders of
the Court relating to this Agreement are appealed by any party (or a post
hearing motion, including without limitation a motion for amended findings or
reconsideration petition for certiorari or motion for rehearing or reargument is
filed with respect to such appeal), Seller will take all steps as may be
reasonable and appropriate to prosecute such appeal, petition or motion, or
defend against such appeal, petition or motion, and Buyer will cooperate in such
efforts, and Seller will use its best efforts to obtain an expedited resolution
of any such appeal; provided, however, nothing herein will preclude Seller and
Buyer form consummating the transactions contemplated herein and waiving the
requirement that the Sale Order or other orders are final.
9.5 Break-Up Fee. In the event the Court enters an order authorizing
Seller to sell substantially all of the Business (through a sale of assets, sale
of stock, merger or otherwise) to a third party pursuant to an offer made in
response to notice of the motion for the Sale Order ("Alternative Transaction"),
and provided this Agreement has not been terminated because of a material breach
of Buyer's obligations, representations or warranties hereunder, and provided
neither Buyer nor any other person or entity controlled by Buyer has appealed
the order of the Court approving the Alternative Transaction, and subject to the
further provisions of this Section 9.5, Seller will pay to Buyer One Hundred
Thousand Dollars ($100,000.00) ("Break-up Fee"), plus Buyer's aggregate actual
and reasonable out-of-pocket expenses incurred in connection with this Agreement
including without limitation Buyer's attorney's fees and costs incurred in
connection with this Agreement and the Loan Agreement (not to exceed an
additional Fifty Thousand Dollars ($50,000.00) ("Buyer's Expenses")). The
Break-up Fee will become due in immediately available funds upon, but will only
become due in the event of, the earlier to occur (if either) of (a) closing of
an Alternative Transaction, or (b) failure of Seller to offer irrevocably to
Buyer the Assets pursuant to order of the Court and on the terms of this
Agreement, as improved to Seller by Buyer (if at all) at the hearing on the
motion for the Sale Order, within ten (10) days after entry of the order of the
Court approving the Alternative Transaction (or, in the event such order is
stayed pending appeal, within the earlier of twenty (20) days after entry of
such order or ten (10) days after lifting of such stay), subject only to Buyer
closing such purchase of Assets within ten (10) days after such offer (or, if
applicable, after the lifting of such stay). Buyer will submit a summary of
out-of-pocket expenses and attorneys fees to Seller for payment. Buyer and
Seller shall submit the expenses for the approval of the Court, only in the
event of a dispute of Buyer and Seller over the reasonableness of such expenses.
12
9.6 Bidding Increment. Seller will not consider an Alternative Transaction
unless, at a minimum, the Alternative Transaction (i) provides for aggregate
consideration of at least One Hundred Thousand Dollars ($100,000.00) in excess
of the value of the Purchase Price and the Break-up Fee, (ii) is on terms not
materially more burdensome or conditional to Seller than the terms of this
Agreement, (iii) is not conditioned on the outcome of unperformed due diligence
by the offeror with respect to Seller beyond dates specified herein with respect
to Buyer's due diligence, (iv) is not subject to the accuracy of representations
and warranties or the satisfaction of conditions materially more burdensome to
Seller than those set forth in this Agreement, and (v) provides for payment in
full of all obligations under the Loan Agreement. Buyer will have the right to
further bid in excess of any such overbid.
9.7 Third Party Bidders. To the extent consistent with the Seller's
obligations as a debtor-in-possession, Seller may respond to inquiries from,
provide information to and answer questions of third parties who express an
interest in acquiring the assets of Seller.
10. Termination.
10.1 Termination. Either or both parties, as applicable, may terminate
this Agreement only under the circumstances set forth below:
(a) Seller and Buyer may terminate this Agreement at any time prior
to the Closing by mutual written consent.
(b) Either Seller or Buyer may terminate this Agreement by written
notice to the other in the event of any material breach or default of any
provision hereof by the other party; provided, however, that neither Seller nor
Buyer may terminate this Agreement by delivery of such notice of termination
while such party is in breach or default of its obligations hereunder.
13
(c) Buyer may terminate this Agreement by written notice to Seller
if: (i) there is a material adverse effect on the Business or operations of
Seller or Buyer is dissatisfied with the results of its due diligence
investigation, (ii) there is a material, uncured default under the Loan
Agreement, (iii) the Preliminary Order has not been entered by the Court by
October 15, 2005, (iv) the Sale Order has not been entered by the Court prior to
December 1, 2005, (v) the Interim Order (as defined in the Loan Agreement)
approving the loan under the Loan Agreement has not been entered by the Court by
October 15, 2005, or (vi) the Final Order (as defined in the Loan Agreement) on
the loan under the Loan Agreement has not been entered by the Court by December
1, 2005.
(d) This Agreement shall automatically terminate upon the closing of
a transaction with a third-party that purchases assets from Seller that is
substantially a sale of the Assets.
10.2 Effect of Other Termination. In the event that the Agreement is
terminated pursuant to Section 10.1 the rights and obligations of the parties
hereunder shall terminate, without liability of any party to the other party;
provided however that Seller shall remain obligated to repay its obligations
under the terms of the Loan Agreement. Notwithstanding the foregoing, (i) in the
event that this Agreement is terminated by Buyer under Section 10.1(b) because
of a material default by Seller, then, in addition to repayment of Seller's
obligations under the Loan Agreement, Seller shall reimburse Buyer for its
aggregate actual and reasonable out-of-pocket expenses incurred in connection
with this Agreement and the Loan Agreement, including without limitations
attorney's fees and costs incurred in connection with this Agreement and the
Loan Agreement and (ii) in the event of a termination under Section 10.1(d) then
in addition to repayment of Seller's obligations under the Loan Agreement,
Seller shall pay to Buyer the Break-Up Fee.
11. Post-Closing Covenants.
11.1 Amounts held in Trust. Following the Closing, any amounts paid to
Seller in connection with the Assets shall be held in trust by Seller for the
benefit of Buyer and tendered and paid to Buyer as soon as reasonably
practicable after the receipt thereof. Following the Closing any amounts paid to
Buyer in connection with the Excluded Assets shall be held in trust by the Buyer
for the benefit of Seller and tendered and paid to Seller as soon as reasonably
practicable after the receipt thereof.
11.2 Further Assurances. At any time from time to time after the Closing
Seller and Buyer shall, at the request of the other party, take any and all
reasonable actions necessary to fulfill their obligations hereunder, to put
Buyer in actual possession and operating control of the Assets, and execute and
deliver such further instruments of conveyance, sale, transfer and assignment,
and take such other actions necessary or desirable to effectuate, record or
perfect the transfer of the Assets to Buyer, to confirm the title of the Assets
to Buyer, to assist Buyer in exercising rights relating thereto, and to
otherwise effectuate or consummate any of the transactions contemplated hereby.
14
12. Miscellaneous.
12.1 Entire Agreement. This Agreement and the written agreements referred
to herein and executed in connection herewith constitute the entire
understanding among the parties with respect to the subject matter hereof, and
supersede all negotiations, prior discussions or other agreements, oral or
written.
12.2 Governing Law; Venue. This Agreement shall be governed by and
construed in accordance with the internal laws of State of California, without
reference or regard to the principles of conflict of laws. Any action arising
out of this Agreement may be brought and maintained in the Court, and the
parties hereto consent to the jurisdiction of such Court.
12.3 Counterparts. This Agreement may be executed in counterparts. Duly
acknowledged facsimile signatures shall be deemed as originals.
12.4 Fees and Costs. Except as otherwise provided in Section 10.2, each
party shall bear its own attorneys' fees and expenses in connection with the
negotiation, preparation and consummation of this Agreement. Seller shall bear
all United States Trustee's quarterly fees pursuant to 28 U.S.C. 1930(a)(6).. If
any proceeding is instituted to enforce the terms or provisions of this
Agreement, the prevailing party in such action shall be entitled to collect as
part of its recovery all reasonable costs, charges and fees, including but not
limited to its expert witness fees and attorneys' fees and costs, incurred in
connection with such action.
12.5 Amendment. This Agreement may only be amended or modified by the
written agreement of the parties.
12.6 Severability. If any of the provisions of this Agreement are held
invalid under any law, such invalidity shall not affect the remainder of the
Agreement.
12.7 Assignment. Buyer shall have the right to assign its rights and
obligations under this Agreement to any entity controlling, controlled by or
under common control with Buyer at any time prior to Closing upon notice to
Seller.
12.8 Further Assurances. Each party agrees to perform any further action
and to execute and deliver any further documents reasonably necessary or proper
to carry out the intent of this Agreement.
12.9 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the parties.
12.10 Headings. The headings of the various sections of this Agreement are
for convenience only and are not intended to explain or modify any of the
provisions of this Agreement.
12.11 Broker's Fees. Each party represents to the other that the
warranting party has not incurred any obligation to compensate any broker,
finder or similar person for any commission, finder's fee, broker's fee or
similar fee as a result of any of the transactions contemplated herein.
15
12.12 Notices. All notices to be given by any party to this Agreement to
the other party shall be in writing, and shall be given (i) by certified or
registered United States mail, return receipt requested, postage prepaid, to the
other; (ii) sent by telefax or facsimile transmission; or (iii) personally
delivered, at the addresses set forth below (or at such other address for a
party as specified by like notice) and shall be deemed given when received if
sent by facsimile transmission or personally delivered, or if mailed as provided
herein, on the second business day after it is so placed in the mail.
The addresses referred to above are:
Buyer: Xxxx Xxxxxx-Xxxxx
Boston Equities Corporation
0000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
With a copy to: Xxxxx X. Xxxxxx III
Xxxxx Xxxxxx LLP
000 X. Xxxxxxxx, Xxxxx 000
Xxx Xxxxx, XX 00000
Seller: Xxxx Xxxxxxx
Tectonic Network, Inc. and
Tectonic Solutions, Inc.
000 Xxxxxxxxx Xxxxxx Xxxxxxx XX, Xxxxx 000
Xxxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxx
Lamberth, Ciffelli, Xxxxxx and Xxxxx. P.A.
0000 Xxxxxxxxx Xxxxxx XX, Xxxxx 000
Xxxxxxx, XX 00000
and: Xxxxxxxxx Xxx
Paul, Hastings, Xxxxxxxx and Xxxxxx LLP
000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Any party at any time may give notice to the other party of a different
address other than that set forth above in accordance with the provisions of
this Section 12.12.
12.13 Representations and Warranties. Each party signing this Agreement
represents and warrants that it has the legal authority to enter into this
Agreement and agreements executed in connection herewith and bind the entity
upon whose behalf it signs (except that Seller's authority and the binding
nature of this Agreement upon Seller is subject to approval of the Court).
16
12.14 Survival of Obligations. All representations, warranties and
obligations of the parties set forth in this Agreement shall survive the Closing
and Closing Date.
12.15 Effect of Course of Dealing. No course of dealing between the
parties in exercising any of their respective rights under this Agreement shall
operate as a waiver of any such rights, except where expressly waived in
writing.
12.16 Time. Time is of the essence of this Agreement and each and every
provision hereof.
17
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
fully executed as of the day and year first above written.
TECTONIC NETWORK, INC.,
a Delaware corporation
as debtor and debtor-in-possession
/s/ Xxxx X. Xxxxxxx
---------------------------------------
By: Xxxx X. Xxxxxxx
Its: President and CEO
TECTONIC SOLUTIONS, INC.,
a Georgia corporation
as debtor and debtor-in-possession
/s/ Xxxx X. Xxxxxxx
---------------------------------------
By: Xxxx X. Xxxxxxx
Its: President and CEO
BOSTON EQUITIES CORPORATION,
a Nevada corporation
/s/ Xxxx Xxxxxx-Xxxxx
---------------------------------------
By: Xxxx Xxxxxx-Xxxxx
Its: President and CEO
EXHIBIT A
LEASES
1. Lease Agreement dated June 27, 2005, between HQ Global Workplaces, Inc.
and Tectonic Network, Inc. for the property located at 000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxxx, XX 00000.
2. Lease Agreement dated December 14, 2004, between Zoom Eyeworks, Inc.
and Tectonic Network, Inc. for the property located at 0000 Xxxxx Xxxxxx, #000
Xxxxxxxx, XX 00000.
A-1
EXHIBIT B
PERSONAL PROPERTY LEASES
1. Xxxxx Fargo Financial Leasing - contract for Minolta Digital Copier in
Atlanta.
2. Data 393 Holdings, LLC. - contract dated June 9, 2005 for server and
rackspace rental through June 9, 2006 currently at $1,814 per month.
3. Rackspace Managed Hosting - month to month contract dated February 6,
2004, for server rackspace rental in the amount of $699 per month.
B-1
EXHIBIT C
SELLER CONTRACTS
1. All sales agreements, contracts and invoices.
2. Software Purchase Agreement between Tectonic Network, Inc. and
Marinsoft, Inc. dated May 5, 2005. Under this agreement the Company has agreed
to purchase certain software necessary in its business. The first installment of
$25,000 was to be paid upon execution of the agreement and the second
installment of $50,000 was payable upon later of July 31, 2005 and 30 days after
the date the seller has fulfilled 40 hours of technical support. The Company
shall also pay the seller a royalty until earlier of April 30, 2007 or the date
the royalty fee equals $75,000, calculated as set forth in the agreement. At the
time of this agreement Marinsoft, Inc. has amounts due to the Company of
$38,400.
3. Bronto Mail, Inc. - month to month contract dated February 19, 2003,
for email distribution service - e-newsletter in the amount of $2,220 per
quarter.
4. Intercall, Inc. - contract dated March 5, 2005, for web presentations
and teleconferencing through March 31, 2006. Price dependent on usage after a
total $5,000 minimum commitment.
5. The Xxxxxx Company - amounts owed for storage and construction on the
Trade Show booth in the amount of $14,202.84
6. Next Step CAD - amounts owed for CAD modeling services in the amount of
$3,150.00
7. Xxxxx Xxxxx - amounts owed for e-newsletter consulting services in the
amount of $1,350.00
C-1
EXHIBIT D
TANGIBLE PERSONAL PROPERTY
Accum Book
Date Depr Value
Asset/Description Vendor Location In Service Total 9/30/05 9/30/05
Workstation M70 - Xxxxx
Xxxxxxx Dell Atlanta, GA 4/1/2005 $9,928 $1,655 $8,273
Workstation 000 - Xxxxx
Xxxxxxx Xxxx Xxxxxxx, XX 4/1/2005 $6,536 $1,089 $5,446
Projector Dell Berkeley, CA 4/1/2005 $2,346 $ 391 $1,955
Trade Show Booth Xxxxxx Co Ohio 5/31/2005 $36,651 $10,384 $26,267
Laptop - Xxxxxx Xxxxxx Dell Berkeley, CA 04/30/03 $3,048 $2,540 $ 000
Xxxxx Xxxxxxxxxx - Xxxxxx
Xxxxxxx Xxxx Xxxxxxxx, XX 04/30/03 $4,302 $3,585 $ 000
Xxxxxx & Xxxxxxx Xxxxxxx Xxxxxxxxx, XX 08/21/03 $4,328 $3,126 $1,202
Latitude Laptop - Xxxx
Xxxxxxx Dell Englewood, CO 08/29/03 $3,191 $2,305 $ 000
Xxxxxxxx Xxxxxx Xxxx Xxxxxxx, XX 10/31/03 $3,184 $2,123 $1,061
Latitude Laptop Dell Englewood, CO 01/30/04 $3,280 $1,913 $1,366
Laptop - Xxxxx Xxxxx Dell Grand Rapids,MI 3/1/2004 $2,701 $1,351 $1,351
Laptop - Xxxx Xxxxxxx Dell Atlanta, GA 4/1/2004 $2,402 $1,201 $1,201
Server Dell Englewood, CO 7/28/2004 $4,483 $1,868 $2,615
Laptop - (prev Xxxxxxx Xxxx) Dell Englewood, CO 9/30/2004 $2,923 $1,055 $1,867
Server Dell Englewood, CO 9/30/2004 $6,997 $2,527 $4,470
Illumen
Netscreen Firewall VPN Group Englewood, CO 10/31/2004 $2,696 $ 899 $1,797
Studio Server Englewood, CO 5/1/2005 $2,126 $ 177 $1,949
Laser Printer - 6250N Color Zones Englewood, CO 1/13/2005 $2,123 $ 354 $1,769
Macromedia
Software License & Studio Englewood, CO 11/18/03 $3,027 $1,934 $1,093
Cocoabase Software Thought, Inc Berkeley, CA 01/20/04 $11,400 $6,650 $4,750
Great Plains-Upgrade Ironware Englewood, CO 01/06/2005 $5,510 $1,378 $4,133
Great Plains - Intercompany
Module Ironware Englewood, CO 03/07/2005 $4,667 $ 000 x0,000
Xxxxxx-Xxxxxxx Xxxx Xxxxxxx, XX 03/31/05 $2,950 $ 344 $2,606
------ ------ ------
$130,799 $49,755 $81,043
======== ======= =======
D-1
EXHIBIT E
INTANGIBLE ASSETS
1. Patents
Patent No. US 6,459,435B1 filed October 1, 2003. Methods, Systems and
Computer Program Products for Generating Storyboards of Interior Design
Surface Treatments for Interior Design Spaces
2. Trade Marks - Registered
Trademark Register International Class 9 No. 2,670,112 Trademark Principal
Register: BlueBolt Studio For: Computer software that provides for
searching, comparing, matching, selecting, composing and communication
sample boards and sample ordering of textiles, floor coverings including
carpets and vinyl flooring, wall finishes, moldings, textile, leather and
vinyl upholstery, laminates and solid surfaces for interior designers,
architects and facilities planners via a global computer network in class
9. Registered December 31, 2002
3. Trade Names and Service Marks - Unregistered
[GRAPHIC OMITTED]
Tectonic Network tectonic network
Tectonic Directory tectonic Directory
Tectonic Studio tectonic Studio
Tectonic Solutions tectonic Solutions
Tectonic Virtual Products
4. Software
Custom Solutions
Configurator - Code for managing data bases of information about products
that compares relationships between data based upon a set of rules to
determine a selection set matching the search criteria.
Product Data Manager - Software framework for loading product data to be
used to generate websites.
E-1
Selector - Search tool for finding information created by Tectonic for
display on the Internet.
Content Management System - Tools to dynamically generate information
about a product. The Content Management System allows Tectonic and
customers to update or add product and marketing product data that is then
displayed on the Internet.
Project Folder - Software that allows Tectonic to keep track of selections
made by the user of the site so they can at anytime come back to the
Tectonic site to view their selections. Tectonic can keep track of this
information to be shared with the product manufacturer.
Software Management Tools - Code that manages "third-party" software to
perform various functions and Internet displays.
Studio
Color Board Tool - Software that creates a "color-board" from a collection
of user selections for presentations.
Image Manager - Software that allows images to be entered into our
database and then displayed as requested by the user.
Sample Order Tool - Software that allows the customer to request samples
be sent to them from the manufacturer.
Software Management Tools - Code that manages "third-party" software to
perform various functions and Internet displays.
Models
Assembly Builder - Software that allows the user to define assemblies with
specific materials. Contains the formulas needed to calculate quantities.
Quantity take-off - Software that manages and integrates data coming from
the Revit model and the Assembly Builder to generate quantity counts and
display the counts in multiple formats.
Library - Software for managing product data and images. This software
includes a search tool to find and display the data requested and to also
allow Revit virtual products to be moved to the Revit drawing.
Directory
Database Management and Search - Software for storing data and display of
the data based upon a customer search request.
E-2
5. Domain Names
Domain Registrant Name Create Date Expiration Date
xxxxxxxx.xxx Tectonic Network 03/12/00 03/12/07
xxxxxxxx.xxx Tectonic Network 06/04/99 06/04/06
xxxxxxxxxxxxxxx.xxx Tectonic Network 12/06/00 12/06/06
xxxxxxxxxxxxxxxx.xxx Tectonic Network 06/07/99 06/07/06
xxxxxxxxxxxxxx.xxx Tectonic Network 12/06/00 12/06/06
xxxxxxxxxxxxxx.xxx Tectonic Network 01/10/01 01/10/06
xxxxxxxxxxxxXxxxxxXxxxx.xxx Tectonic Network 06/21/02 06/21/07
xxxxxxxxxx.xxx Tectonic Network 11/09/99 11/09/05
xxxxxxxxxx.xxx Tectonic Network 11/19/97 11/18/05
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/24/04 01/23/06
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/24/04 01/24/06
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/24/04 01/24/06
xxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xx Tectonic Network 01/24/04 01/23/06
xxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/24/04 01/23/06
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/24/04 01/24/06
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/24/04 01/24/06
xxxxxxxxxxxxxxxxx.xx Tectonic Network 01/24/04 01/23/06
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 02/12/03 02/12/06
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 02/12/03 02/12/06
xxxxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 06/08/04 06/08/06
xxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 06/08/04 06/08/06
xxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
E-3
xxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/30/06
xxxxxxxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 06/08/04 06/08/06
xxxxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 06/08/04 06/08/06
xxxxxxxXxxxxxxxxxxx.xxx Tectonic Network 01/30/04 01/29/06
xxxxxxxxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxx.xx Tectonic Network 02/03/04 02/02/06
xxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 09/24/04 09/24/05
xxxxxxxxxxxxxxxxxxxxx.xxx Tectonic Network 09/24/04 09/24/05
xxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
xxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
xxxxxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
xxxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
xxxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
xxxxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
xxxxxxxxxxxxxxxx.xxx Tectonic Network 12/13/04 12/13/05
6. Other Intellectual Property
Servers containing Tectonic Models and Tectonic Virtual Products. Best
Practices document for modeling within Revit software. Diagrams, schema,
models and source code related to Tectonic Models and Tectonic Virtual
Products. Repository and Indexing/Classification System for Tectonic
Virtual Products including repository of generic and proprietary Virtual
Products. Tools for users of Revit software to perform quantity counts of
the total design model, link product quantities with unit costs, and
report them. Tools for automatic testing and deployment of Repository and
Count software services.
Servers containing Tectonic Studio Images and Data. Diagrams, schema and
source code related to Tectonic Studio including Indexing/Classification
system. Product information and color-accurate imagery for commercial
interior finishes which provides for comparisons of finishes by attributes
including style, thickness, color or specific patterns.
Servers containing Tectonic Online Directory Data. Directory data of
commercial construction product manufacturers and their local supply chain
of product representatives and distributors including online search
mechanisms, directory structure.
Servers containing Tectonic Solutions Data. Source code, programs,
methodologies. schema, proprietary content, workflow processes,
configurators, design documents and applications.
E-4
EXHIBIT F
SECURITY DEPOSITS
Zoom Eyeworks, Inc. Berkeley, CA office security deposit $ 808
USPO Directory postage balance $ 6,543
HQ Global Workplaces, Inc. Atlanta, GA office security deposit $ 3,264
Co-Denver Corporate Center, LLC. Englewood, CO office security deposit $ 2,680
G-1
EXHIBIT G
EXCLUDED ASSETS
TANGIBLE PROPERTY
Restricted cash balance - North Fork Bank Laurus Master Fund, Term Note $3,272,728
Restricted cash balance - Certificate of Deposit
- Silicon Valley Bank Inverness Properties, Englewood lease deposit $ 130,000
Inverness Properties Englewood, CO office security deposit $ 20,000
Cape Xxx Properties Manchester, MA office security deposit $ 750
Xxxx Xxxxx Rent & storage fees receivable $ 4,656
Xxxx Xxxxxxx Employee advance $ 10,163
Citizen's Gas Indianapolis security deposit $ 570
Indianapolis Power Indianapolis security deposit $ 940
Duke Realty Corp. Indianapolis office security deposit $ 8,374
Deposit Retainer - Paul, Hastings, Xxxxxxxx and
Xxxxxx LLP Corporate legal counsel retainer $ 10,000
Deposit Retainer - Babush, Neiman, Xxxxxxx & Tax return and 401(k) audit preparation
Xxxxxxx, LLP retainer. $ 63,000
Deposit/Retainer - Lambert, Cifelli, Xxxxxx and
Xxxxx P.A. Bankruptcy counsel retainer $ 17,286
EXCLUDED CONTRACTS
1. Laurus Master Fund, Limited, Secured Convertible Term Note and
Convertible Minimum Borrowing Note in the original principal amount of
$4,000,000 with a current alleged balance at September 30, 2005 of $3,272,728,
excluding interest and penalties.
2. Laurus Master Fund, Limited, Secured Revolving Note in the original
principal amount of $1,500,000 with a current alleged balance at September 30,
2005 of $500,000.
3. Promissory Note, dated January 2, 2004, in the original principal
amount of $360,000 with a current principal amount of $100,000 from the Company
to Xxxx Xxxxx
4. Promissory Note, dated January 2, 2004, in the original principal
amount of $533,000 with a current principal amount of $143,000 from the Company
to XxxxXxxxxx.xxx, Inc.
5. Indebtedness for alleged severance under Xxxxxxx Xxxxxxx Employment
Agreement and Non-Compete, in the aggregate amount of $320,312.
G-2
6. Grand Rapids, MI, Sublease Agreement by and between Return On
Investment Corporation and Xxxxxx-XxXxxx, LLC. For premises located at 0000 X.
Xxxxxxxx Xxx. Xxxxx 000, Xxxxx Xxxxxx, XX 00000.
7. Indianapolis, IN, Lease Agreement by and between Return On Investment
Corporation and Xxxxx Realty LLC Limited Partnership. For premises located at
0000 Xxxx 00xx Xxxxxx, Xxxxxxxxxxxx, XX 00000.
8. Englewood, CO Lease Agreement by and between Tectonic Solutions, Inc.
and Inverness Properties. For premises located at 000 Xxxxxxxxx Xxxxx, Xxxx,
Xxxxx 000, Xxxxxxxxx XX 00000.
9. CBeyond Communications Agreement with Tectonic Solutions, Inc. for
phone service in Englewood, CO dated February 10, 2005.
10. Georgia Greater Life Agreement providing voluntary life insurance as
well as ST and LT Disability Insurance.
11. BlueCross, Blue Shield of Georgia Medial and Dental Agreement
12. Principal Group 401(k) Plan
13. Hartford Fire Insurance Company Directors and Officers Insurance
Policy dated August 10, 2006.
14. Litigation and pending Mediation with Unicomp, Inc. for the recovery
of amounts advanced under a promissory note.
15. Asset Purchase Agreement among Return On Investment Corporation, GO
Software, Inc. and Verifone, Inc. dated December 6, 2005, including without
limitation any right to the Contingent Earnout Payment.
16. Lease Agreement with Neopost, Inc. and Tectonic Solutions, Inc. for
postage machine dated April 9, 2002.
17. Lease Agreement for copier with De LaAge Landen Financial Services for
Konica copier dated April 19, 2005.
G-3
EXHIBIT L
LITIGATION
In January 2005, Return On Investment Corporation and its subsidiary
Tectonic Solutions, Inc. received a letter of complaint from a former employee,
a Xx. Xxxxx Xxxxx, alleging production and usage tracking problems with certain
directory products of Tectonic which allegedly may have led to shortfalls in
production numbers and incorrect statistics being furnished to certain
customers. Such former employee has also made allegations of constructive
discharge and of whistleblower retaliation with respect to his treatment by the
Company, which claims are believed by the Company to be baseless. The former
employee has filed a complaint with Occupational Safety and Health
Administration ("OSHA"), and no litigation may be commenced until OSHA makes an
initial determination, issues a right to xxx letter or fails to act for six
months. A special committee of the Board of Directors (comprised of members of
the Audit Committee) was formed to conduct an investigation of the issues
alleged by the former employee. No evidence supporting the former employee's
claims has been found in connection with the employee's allegations,
In April 2005 American Mint, LLC ("American Mint") and certain of its
overseas affiliates filed a complaint in the United States District Court for
the Middle District of Pennsylvania against GO Software, Inc. ("GO") (whose
liabilities were retained by Return On Investment Corporation upon the sale of
GO's assets). The complaint alleges that GO's software malfunctioned, which
caused American Mint's overseas affiliates to overcharge customers purchasing
collectible coins. The complaint further alleges that GO improperly instructed
the overseas affiliates in the installation of the software, resulting in the
billing of many credit card customers in amounts up to 100 times greater than
the actual purchase amounts. American Mint asserts claims for breach of
contract, breach of various express and implied warranties, negligence, and
negligent misrepresentation, and seeks compensatory damages of $981,758,
including $281,758 in charges associated with correction of the improper charges
and lost anticipated profits of $700,000. The Company intends to oppose the
lawsuit vigorously, and has filed a motion to dismiss the action and to limit
the damages to $10,995, the purchase price of the software
The Company's subsidiary GO Software, Inc. is the subject of a claim in
Los Angeles County, California Superior Court. When Return On Investment
Corporation sold GO's assets, it retained its liabilities, including with
respect to litigation. Plaintiff Bankcard USA Merchant Services, Inc.
("Bankcard") sued Capital Video Corporation ("Capital Video") to recover amounts
that Bankcard allegedly was required to pay to MasterCard International in
penalties as a result of fraudulent transactions having been processed through
Capital Video as a result of its use of non-conforming payment processing
software. The total demanded is $86,700 and attorneys' fees. On January 18,
2005, Capital Video filed a third-party claim against GO and others for breach
of contract, equitable indemnity, and breach of warranty, alleging that defects
in the payment processing software of Atomic Software, Inc. ("Atomic Software"),
under which GO allegedly does business, were responsible for the fraudulent
transactions. Capital Video seeks damages in the amount of any liability it
incurs to Bankcard, plus attorneys' fees. GO has filed an answer denying all
liability and asserting that it is not a proper party to the litigation, based
on the fact that the underlying transactions were conducted by Atomic Software
before GO purchased its assets and Atomic retained its liabilities in that
transaction. In addition, GO has filed a motion for sanctions for frivolous
litigation. Management believes it possesses substantial defenses to the action
and presently are in negotiation to settle this case for an amount of $2,000.
L-1
GO Software, Inc. is also the subject of a third-party complaint in an
action pending in the Court of Common Pleas, Lake County, Ohio. Plaintiff Nova
Info. Systems, Inc. alleges that defendant Current Directions, Inc. ("Current
Directions") is liable for $27,497 related to charge-backs refunded for
unauthorized credit card charges. Current Directions, in turn, alleges that GO
(along with Visa, Mastercard, and Merchant Warehouse) owes Current Direction
indemnification for any and all amounts it is obligated to pay to Nova. In
addition, Current Directions seeks unspecified damages for loss of business,
cost of merchandise shipped, shipping costs, bank fees, and defamation in the
business community. Approximately, three years ago Return On Investment
Corporation received approximately $50,000 from a customer, Winston Tire, as
payment for software sold to Winston Tire. Subsequently, Winston Tire declared
bankruptcy. In January, 2004, Company received a letter from an attorney
representing the Winston Tire's bankruptcy estate. The letter states that the
$50,000 payment to Company was a fraudulent conveyance under bankruptcy law and
that Company must return the $50,000 payment to the Winston Tire bankruptcy
estate.
On September 12, 2005, Tectonic Network, Inc. and its subsidiary Tectonic
Solutions, Inc. received a summons in a civil action from Xxxxxx-XxXxxx, LLC.
for breach of contract relating to premises held under a sublease agreement at
0000 Xxxx Xxxxxxxx XX, Xxxxx Xxxxxx, XX. Total amounts claimed under the
sublease amount to $80,044.22. The Company has not yet responded to the summons.
L-2
EXHIBIT H
ASSIGNMENT AND ASSUMPTION AGREEMENT
[attached]
H-1
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT ("Agreement") dated as of October
__, 2005, is entered into between Tectonic Network, Inc. and Tectonic Solutions,
Inc. (collectively, "Seller"), and Boston Equities Corporation, or designee
("Buyer").
A. Seller and Buyer are parties to an Asset Purchase Agreement dated
September __, 2005 ("Asset Purchase Agreement"), pursuant to which Seller,
effective upon the close of escrow (the "Closing") is transferring and conveying
to Buyer certain of the assets of Seller, and pursuant to which certain leases,
contracts and other agreements are to be assigned to and assumed by Buyer.
B. All capitalized words and phrases not defined in this Agreement shall
have the meaning ascribed to them in the Asset Purchase Agreement.
THEREFORE, FOR VALUABLE CONSIDERATION, BUYER AND SELLER HEREBY AGREE AS
FOLLOWS:
1. Effective at Closing, Seller hereby assigns to Buyer all of its right,
title and interest, if any, in and to the Section 365 Agreements.
2. Buyer hereby accepts, assumes and agrees to discharge, pay, perform and
satisfy, effective as of the close of business on the date hereof, all of the
duties, liabilities and obligations and covenants of Seller pursuant to or under
the Section 365 Agreements, including without limitation all amounts coming due
thereunder from and after Closing and all performance obligations thereunder.
Buyer is not assuming or otherwise responsible for any duties, liabilities and
obligations and covenants of Seller pursuant to or under the Section 365
Agreements which came due prior to Closing.
3. Buyer is not accepting or assuming or agreeing to discharge, pay,
perform on the date hereof or satisfy any duties, liabilities or obligations
other than those under the Section 365 Agreements.
4. Buyer agrees to defend, indemnify and hold Seller for losses or damages
arising out of or in connection with Buyer's performance of or failure to
perform the obligations of Seller to be performed under any of the Section 365
Agreements after the Closing on the terms set forth in the Asset Purchase
Agreement.
5. Seller agrees to defend, indemnify and hold Buyer and its successors,
officers, directors, shareholders, employees and assigns harmless against any
and all losses or damages arising out of or in connection with Seller's
performance of or failure to perform the obligations of Seller to be performed
under any of the Section 365 Agreements prior to Closing on the terms set forth
in the Asset Purchase Agreement.
6. This Agreement is entered into pursuant to the Asset Purchase
Agreement. The assignments made hereunder are made with respect to the
representations, warranties and covenants contained in the Asset Purchase
Agreement.
7. If any action, including any arbitration proceeding, is instituted to
enforce the terms or provisions of this Agreement, including an action
instituted after the bankruptcy of a party, the prevailing party in such action
shall be entitled to collect as part of its recovery all reasonable costs,
charges and fees, including but not limited to its expert witness fees and
attorneys' fees and costs, incurred in connection with such action.
8. This Agreement shall be governed by and construed in accordance with
the internal laws of the State of Georgia, without regard to the principles of
conflict of laws. Any action arising out of this Agreement shall be brought and
maintained in the Court as defined in the Asset Purchase Agreement.
9. All notices to be given by any party to this Agreement to the other
party shall be in writing, and shall be given as set forth in the Asset Purchase
Agreement for the giving of notices.
10. This Agreement shall be binding upon, and shall inure to the benefit
of, Buyer and Seller and their respective successors and assigns.
11. This Agreement and the Asset Purchase Agreement contain the entire
understanding of the parties hereto with regard to the subject matter contained
herein, and supersedes all prior agreements or understandings between or among
the parties hereto relating to such subject matter. This Agreement may not be
amended, modified or terminated except in writing signed by both Buyer and
Seller.
[Remainder of page intentionally left blank]
H-3
12. This Agreement may be executed in one or more counterparts and by
facsimile, each of which shall be considered an original instrument, but all of
which shall be considered one and the same instrument, and shall become binding
when one or more counterparts have been signed by each party hereto and
delivered to the other party hereto.
IN WITNESS WHEREOF, the parties hereto have signed this Agreement on the
day and year first above written.
TECTONIC NETWORK, INC.
a Delaware corporation
---------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
BOSTON EQUITIES CORPORATION
a Nevada corporation
---------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
H-4
EXHIBIT I
ALLOCATION OF PURCHASE PRICE
I-1
EXHIBIT J
XXXX OF SALE
[attached]
J-1
XXXX OF SALE
Tectonic Network, Inc., a Delaware corporation ("Seller"), for good and
valuable consideration, receipt of which is hereby acknowledged, and pursuant to
the Asset Purchase Agreement dated as of October __, 2005 (the "Asset Purchase
Agreement") between Seller and Boston Equities Corporation, or designee
("Buyer"), does hereby sell, convey, assign, transfer and deliver to Buyer free
and clear of any Encumbrances other than the Assumed Liabilities (each as
defined in the Asset Purchase Agreement), all of Seller's right, title and
interest in and to the following (the "Assets"):
1. Personal Property. All of the fixtures, furniture, equipment and
tangible personal property used in connection with the Business, including those
items described on Exhibit A attached hereto (the "Personal Property").
2. Intangible Property. All of Seller's intangible personal property used
in connection with the Business, including without limitation, all software,
patents, patent applications, trademarks, copyrights, trade secrets, licenses,
research, development, know-how inventions, technical information, tradenames,
registrations, service marks, applications with respect to any of the foregoing,
Seller's name, and other intangible rights and property owned or held by Seller,
including going concern value, goodwill, telephone, telecopy and e-mail
addresses and listings and those items specifically listed on Exhibit B attached
hereto, customer and vendor lists, files, documents, books, records, computer
programs, advertising and sales materials, prepaid charges, and like items
pertaining to the Business, in each case whether owned by Seller or licensed to
others, together with all rights under or pursuant to all warranties,
representations and guarantees made by suppliers, manufactures an contractures
in connection with products or services of the Business or affecting the Assets
(collectively, the "Intangible Property"). Notwithstanding the foregoing, the
Intangible Property shall not include: (i) any materials containing privileged
communications or information about employees, the disclosure of which would
violate an employee's reasonable expectation of privacy, or (ii) any other
materials which are subject to attorney-client or any other privilege or
requirement to maintain confidential.
3. Inventories. All supplies, goods, materials, work in process, raw
materials, inventory, supplies and stock in trade owned by Seller that are used
for sale in connection with the Business.
4. Insurance. All liability insurance (including any premium refunds due
and owing thereunder now or after the date hereof) and any insurance proceeds,
claims and causes of action with respect to or arising in connection with the
Assets to the extent insuring Seller with respect to the Assumed Liabilities (as
defined in the Asset Purchase Agreement) assumed by Buyer.
5. Deposits. Seller's right title and interest in all utility deposits,
deposits with trade creditors, security deposits and similar deposits with
landlords or other contracting parties under the Section 365 Agreements,
including without limitation those deposits identified on Exhibit C attached
hereto.
J-2
The Assets do not include the Excluded Assets as set forth in the Asset
Purchase Agreement.
This Xxxx of Sale is entered into pursuant to the Asset Purchase
Agreement. The terms and conditions applicable to the transfers herein shall be
those as set forth in, and are governed pursuant to, the Asset Purchase
Agreement. In the event of any conflict or ambiguity between the terms hereof
and the terms of the Asset Purchase Agreement, the terms of the Asset Purchase
Agreement shall govern and be controlling.
Nothing in this Xxxx of Sale is intended to confer upon any person other
than Seller and Buyer, or their permitted successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Xxxx of Sale.
No amendment or waiver of any provision of this Xxxx of Sale will be
effective unless the same is in writing and executed by both of the parties
hereto.
This Xxxx of Sale will be binding upon, and inure to the benefit of,
Seller and Buyer, and their respective successors and assigns.
This Xxxx of Sale shall be governed by and construed and enforced in
accordance with the internal laws of the State of California, without reference
or regard to the principles of conflict of laws.
IN WITNESS WHEREOF, Seller has caused the same to be signed on its behalf
as of _________________________, 2005.
TECTONIC NETWORK, INC.
a Delaware corporation
---------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
J-3
XXXX OF SALE
Tectonic Solutions, Inc., a Georgia corporation ("Seller"), for good and
valuable consideration, receipt of which is hereby acknowledged, and pursuant to
the Asset Purchase Agreement dated as of October __, 2005 (the "Asset Purchase
Agreement") between Seller and Boston Equities Corporation, or designee
("Buyer"), does hereby sell, convey, assign, transfer and deliver to Buyer free
and clear of any Encumbrances other than the Assumed Liabilities (each as
defined in the Asset Purchase Agreement), all of Seller's right, title and
interest in and to the following (the "Assets"):
1. Personal Property. All of the fixtures, furniture, equipment and
tangible personal property used in connection with the Business, including those
items described on Exhibit A attached hereto (the "Personal Property").
2. Intangible Property. All of Seller's intangible personal property used
in connection with the Business, including without limitation, all software,
patents, patent applications, trademarks, copyrights, trade secrets, licenses,
research, development, know-how inventions, technical information, tradenames,
registrations, service marks, applications with respect to any of the foregoing,
Seller's name, and other intangible rights and property owned or held by Seller,
including going concern value, goodwill, telephone, telecopy and e-mail
addresses and listings and those items specifically listed on Exhibit B attached
hereto, customer and vendor lists, files, documents, books, records, computer
programs, advertising and sales materials, prepaid charges, and like items
pertaining to the Business, in each case whether owned by Seller or licensed to
others, together with all rights under or pursuant to all warranties,
representations and guarantees made by suppliers, manufactures an contractures
in connection with products or services of the Business or affecting the Assets
(collectively, the "Intangible Property"). Notwithstanding the foregoing, the
Intangible Property shall not include: (i) any materials containing privileged
communications or information about employees, the disclosure of which would
violate an employee's reasonable expectation of privacy, or (ii) any other
materials which are subject to attorney-client or any other privilege or
requirement to maintain confidential.
3. Inventories. All supplies, goods, materials, work in process, raw
materials, inventory, supplies and stock in trade owned by Seller that are used
for sale in connection with the Business.
4. Insurance. All liability insurance (including any premium refunds due
and owing thereunder now or after the date hereof) and any insurance proceeds,
claims and causes of action with respect to or arising in connection with the
Assets to the extent insuring Seller with respect to the Assumed Liabilities (as
defined in the Asset Purchase Agreement) assumed by Buyer.
5. Deposits. Seller's right title and interest in all utility deposits,
deposits with trade creditors, security deposits and similar deposits with
landlords or other contracting parties under the Section 365 Agreements,
including without limitation those deposits identified on Exhibit C attached
hereto.
J-4
The Assets do not include the Excluded Assets as set forth in the Asset
Purchase Agreement.
This Xxxx of Sale is entered into pursuant to the Asset Purchase
Agreement. The terms and conditions applicable to the transfers herein shall be
those as set forth in, and are governed pursuant to, the Asset Purchase
Agreement. In the event of any conflict or ambiguity between the terms hereof
and the terms of the Asset Purchase Agreement, the terms of the Asset Purchase
Agreement shall govern and be controlling.
Nothing in this Xxxx of Sale is intended to confer upon any person other
than Seller and Buyer, or their permitted successors and assigns, any rights,
remedies, obligations or liabilities under or by reason of this Xxxx of Sale.
No amendment or waiver of any provision of this Xxxx of Sale will be
effective unless the same is in writing and executed by both of the parties
hereto.
This Xxxx of Sale will be binding upon, and inure to the benefit of,
Seller and Buyer, and their respective successors and assigns.
This Xxxx of Sale shall be governed by and construed and enforced in
accordance with the internal laws of the State of California, without reference
or regard to the principles of conflict of laws.
IN WITNESS WHEREOF, Seller has caused the same to be signed on its behalf
as of _________________________, 2005.
TECTONIC SOLUTIONS, INC.,
a Georgia corporation
---------------------------------------
By:
---------------------------------------
Its:
---------------------------------------
J-5
