Exhibit 10.1
ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (this "Agreement") is made and entered
into effective as of the 3rd day of March, 2000, by and between ELECTRONIC
PROCESSING, INC., a Missouri corporation, on behalf of itself and a subsidiary
to be formed by it (hereinafter referred to as "Buyer"), and PHITECH, INC., a
California corporation (hereinafter referred to as "Seller").
RECITALS:
WHEREAS, Seller desires to sell, transfer, convey and assign to Buyer
substantially all of the tangible and intangible assets used by Seller in
conducting its business within the electronic commerce transaction processing
industry of providing, servicing or otherwise dealing with an automated
communications information system for the electronic, open, enterprise-wide
delivery of messages and data, including but not limited to, file transfers (the
"Business"); and
WHEREAS, Buyer desires to purchase such assets from Seller, subject to
the terms, conditions and covenants set forth herein.
AGREEMENT:
NOW, THEREFORE, the parties agree as follows:
1. SALE AND PURCHASE OF ASSETS
1.1. SALE AND PURCHASE. Subject to the terms and conditions of this
Agreement, Seller will sell, convey, transfer, assign and deliver to Buyer at
Closing (as defined herein), and Buyer will purchase from Seller at Closing, for
the purchase price as provided herein, all tangible and intangible assets of
Seller utilized in its Business, including but not limited to, the following:
1.1.1. The computer software of Seller set forth on EXHIBIT
1.1.1, attached hereto (the "Software") and all
materials, training manuals, software manuals,
equipment plans and specifications, equipment and
inventory relating to the Software, as developed
and/or utilized by Seller in the Business;
1.1.2. All current assets of Seller, including Seller's cash
on hand as of the Closing Date ("Cash") and the
accounts receivable of Seller generated in the
ordinary course of business through Closing, provided
that the Cash shall be delivered to Buyer as soon as
reasonably practical following Closing;
1.1.3. Any trademarks, tradenames and logos associated with
the "PHiTECH" and "DataEXPRESS" names, and all
federal and state registrations of Seller in any
patents, copyrights, trademarks, tradenames, trade
secrets and other intellectual property rights used
in the connection with the Business, as set forth on
EXHIBIT 1.1.3, attached hereto, and any common law
rights in the same;
1.1.4. All equipment, inventory, furniture, fixtures,
computers and other similar personal property owned
by Seller, as set forth on EXHIBIT 1.1.4, attached
hereto;
1.1.5. The contracts, service agreements, leases of real
property and other agreements of Seller set forth on
EXHIBIT 1.1.5 attached hereto (the "Assumed
Contracts");
1.1.6. All customer lists, books and records, files,
documentation (electronic or manual), permits,
licenses, goodwill and other intangible assets of the
Business which are necessary for Buyer to continue
the sale of the Software after Closing;
1.1.7. All product inventory, promotional material
inventory, plates, designs, artwork and screen shots
relating to the Business; and
1.1.8. All other tangible and intangible assets used in the
Business not described above.
The assets described in subsections 1.1.1. through 1.1.8. above shall
hereinafter be collectively referred to herein as the "Personal Property". None
of the Personal Property shall be sold, transferred or otherwise disposed of by
Seller from the date hereof through Closing, other than to Buyer or in the
ordinary course of business and consistent with Seller's past practices.
1.2 EXCLUDED ASSETS. Notwithstanding Section 1.1 above, Seller is
not selling, conveying, transferring, assigning and delivering to Buyer any of
the following, all of which are referred to herein as the "Excluded Assets":
1.2.1. The corporate charter, taxpayer and other
identification numbers, seals, minute books, stock
transfer books and other documentation relating to
the organization, maintenance and existence of Seller
as a corporation;
1.2.2. All insurance policies of Seller and principals of
Seller, and all proceeds thereof;
1.2.3. All employee benefit plans of Seller;
1.2.4. All employment agreements, express or implied,
between Seller and its employees;
1.2.5 All assets sold in the ordinary course of business
from the date hereof to the Closing Date; and
1.2.6. All assets listed on EXHIBIT 1.2.6.
2. LIABILITIES TO BE ASSUMED.
2.1. LIABILITIES. Buyer is not assuming any liability or obligation
of Seller, fixed, contingent, or otherwise, whether or not disclosed to Buyer by
Seller, except Buyer shall assume at Closing the following:
2.1.1. the Assumed Contracts;
2.1.2. the accounts payable of Seller generated in the
ordinary course of business through Closing, which
Buyer shall pay in the ordinary course of business
after Closing;
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2.1.3. any repayment obligations of Seller under the Bank
Lines of Credit (as defined below), which Buyer shall
pay upon Closing in accordance with Section 4;
2.1.4. any repayment obligations of Seller under the
Shareholders Notes Payable (as defined below), which
Buyer shall pay upon Closing in accordance with
Section 4; and
2.1.5. the other liabilities and obligations of Seller
reflected on the Balance Sheet (as defined in Section
9.5 below) and those arising in the ordinary course
of business between the date thereof and Closing,
excluding any obligations to Seller's employees for
Accrued Vacation and Accrued Payroll (as defined
below).
2.2. COSTS; EXPENSES. Buyer shall pay all sales and use taxes
arising out of the transfer of the Personal Property, and shall pay its portion,
prorated as of the Closing Date, of state and local real and personal property
taxes of Seller's business. Except as set forth to the contrary in the preceding
sentence and in Section 4 below, Buyer shall not assume or be liable for any
costs, expenses or liability of Seller, including tax liabilities, which may
arise as a result of the sale of the Personal Property. Seller and Buyer will
each pay its own respective expenses incident to the preparation of this
Agreement and the consummation of the transaction contemplated herein, and each
will pay its own respective expenses and fees incurred in the preparation and
delivery of all documents, reports and legal and accounting opinions required to
be delivered for or on behalf of them hereunder, whether or not the transaction
contemplated by this Agreement is consummated. Specifically, without limiting
the generality of the foregoing, any and all legal, accounting, brokerage and/or
other professional fees owed by Seller to any person or firm (including, but not
limited to, Xxxxxx Xxxxx & Xxxxxx or MBV Law, LLP, Xxxxx Xxxxxxx, and Xxxxxxxx
Xxxxx) which are related to the preparation, negotiation or consummation of the
transactions contemplated herein will be paid by Seller using the sums paid by
Buyer to Seller at Closing pursuant to Section 3 below. Any such fees which have
been paid by Seller prior to Closing shall be credited against the Purchase
Price (as defined in Section 3 below) payable by Buyer at Closing. At least five
(5) days prior to Closing, Seller shall provide Buyer with true and accurate
documentation describing the total amount of such fees paid by Seller prior to
Closing, and thereafter Seller shall refrain from making further payments for
such obligations until after Closing.
2.3. ACCRUED VACATION. Three (3) days prior to Closing, Seller
shall deliver to Buyer a schedule accurately reflecting the total amounts then
currently owed by Seller to each employee of Seller, other than Xxxxx X. Xxxxxxx
("Xxxxxxx") and Xxxxxxx Xxxxxxxx, for accrued vacation ("Accrued Vacation").
Buyer agrees to send by wire transfer to an account designated by Seller an
amount equal to the Accrued Vacation on such date. Such funds shall not be
considered Cash for purposes hereof. Seller agrees that it will not pay any
employee for accrued vacation until after Closing. If this Agreement is
terminated prior to Closing, then Seller shall immediately refund such amounts
to Buyer.
2.4. ACCRUED PAYROLL. Three (3) days prior to Closing, Seller shall
deliver to Buyer a schedule accurately reflecting the total amounts then
currently owed by Seller to each employee of Seller for accrued payroll
("Accrued Payroll"). Buyer agrees to send by wire transfer to an account
designated by Seller an amount equal to the Accrued Payroll on such date,
excluding Accrued Payroll owed to Xxxxxxx. Such funds shall not be considered
Cash for purposes hereof. If this Agreement is terminated prior to Closing, then
Seller shall immediately refund such amounts to Buyer. At Closing, Buyer will
send by wire transfer to an account designated by Seller an amount equal to the
Accrued Payroll owed to Xxxxxxx, not to exceed Four Hundred Eighteen Thousand
Four Hundred Fifty-eight Dollars ($418,458).
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3. PURCHASE PRICE OF PERSONAL PROPERTY. Subject to the terms of
this Agreement and in reliance on the representations and warranties set forth
herein, Buyer shall purchase the Personal Property at Closing and, in
consideration therefor, will pay to Seller the sum of Five Million Four Hundred
Thousand Dollars ($5,400,000) (the "Purchase Price"). The Purchase Price shall
be payable by Buyer as follows:
(a) At Closing, the sum of Four Million Four Hundred
Thousand Dollars ($4,400,000) shall be paid to Seller
in immediately available funds, by wire transfer to
an account designated by Seller;
(b) One Million Dollars ($1,000,000) shall be paid to
Seller in four (4) equal annual installments of Two
Hundred Fifty Thousand Dollars ($250,000) each,
payable thirteen months following Closing,
twenty-five months after Closing, thirty-seven months
after Closing and forty-nine months after Closing,
respectively. Notwithstanding the foregoing, Seller
shall not be paid any portion of this One Million
Dollars ($1,000,000) which is due subsequent to
Xxxxxxx resigning her employment with Buyer or being
fired for "cause" by Buyer as defined in the
Employment Agreement entered into by Xxxxxxx and
Buyer on the date hereof in the form attached hereto
as EXHIBIT 6, if such resignation or firing occurs
within one (1) year following Closing. Xxxxxxx shall
not be deemed to have resigned her employment for
purposes of this subsection in the event she dies or
becomes unable to perform the essential functions of
her job pursuant to the Employment Agreement as a
result of a temporary or permanent disability, with
or without reasonable accommodation.
4. PAYMENT OF CERTAIN LIABILITIES BY BUYER. Buyer agrees to pay
and satisfy in full upon Closing by wire transfer to an account designated by
Xxxxxxx (a) Seller's then current repayment obligations under its shareholders
notes payable to Xxxxxxx ("Shareholders Notes Payable"), and (b) Seller's then
current repayment obligations to financial institutions under lines of credit
("Bank Lines of Credit"), provided that the aggregate repayment obligations
under the Shareholders Notes Payable and the Bank Lines of Credit do not exceed
Four Hundred Sixteen Thousand Dollars ($416,000). If, however, Seller determines
that the needs of the Business require Seller to borrow additional money to fund
the operation of the Business in the ordinary course and as contemplated or
permitted hereby prior to Closing, then Seller may borrow additional funds from
Xxxxxxx or under the Bank Lines of Credit prior to Closing so long as Seller
provides Buyer with prior written notice thereof, including the specific amount
of additional funds to be borrowed. Provided that such notice requirement is
satisfied, such additional funds borrowed from Xxxxxxx or under the Bank Lines
of Credit shall be paid by Buyer at Closing.
5. ALLOCATION OF PURCHASE PRICE. Within thirty (30) days
following Closing, the parties shall agree upon a mutually acceptable allocation
of the consideration paid and received by them respectively in this transaction
among the assets transferred, so that an Internal Revenue Service Form 8594,
Asset Acquisition Statement, may be prepared and filed with the Internal Revenue
Service in accordance with Section 1060 of the Internal Revenue Code of 1986.
6. EMPLOYMENT AGREEMENT. Buyer and Seller agree that this
Agreement shall be contingent upon Buyer entering into an employment agreement
with Xxxxxxx on or before Closing, pursuant to which each will agree to perform
the obligations specified in such employment agreement for a term of up to two
(2) years immediately following Closing. Such employment agreement shall be in
the form attached hereto as EXHIBIT 6 (the "Employment Agreement").
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7. CONSULTING AGREEMENT. Buyer and Seller agree that this
Agreement shall be contingent upon Buyer entering into a consulting agreement
with Xxxxxxx on or before Closing, pursuant to which each will agree to perform
the obligations specified in such consulting agreement for a term, beginning
upon the termination of the Employment Agreement, and ending four (4) years
following Closing. Such consulting agreement shall be in the form attached
hereto as EXHIBIT 7 (the "Consulting Agreement").
8. INDEMNITY AGREEMENT. Buyer and Seller agree that this
Agreement shall be contingent upon Xxxxxxx entering into an indemnity agreement
with Buyer on or before Closing relating to the provision of an indemnity by
Xxxxxxx against any expenses incurred by Buyer arising from or related to
liabilities of Seller or the Business prior to Closing. Such indemnity agreement
shall be in the form attached hereto as EXHIBIT 8 (the "Indemnity Agreement").
9. REPRESENTATIONS AND WARRANTIES OF SELLER. Except as set forth
on EXHIBIT 9 attached hereto, Seller hereby makes the following representations
and warranties, each of which is true and correct as of the date hereof, and
shall be true and correct at and as of Closing:
9.1 CORPORATE EXISTENCE AND QUALIFICATION. Seller is a corporation
duly organized, validly existing and in good standing under the laws of the
State of California. Seller has the corporate power and authority to own and use
its property and to transact the business in which it is engaged, and holds all
franchises, licenses and permits necessary and required therefor. Seller is not
required to be licensed or qualified to do business as a foreign corporation in
any jurisdiction.
9.2 APPROVAL OF AGREEMENT. Seller has the right, power, legal
capacity and authority to enter into and perform its obligations under this
Agreement. The form, execution and delivery of this Agreement and the
performance by Seller of its obligation hereunder have been duly approved by the
board of directors and shareholders of Seller. No other approvals, permits,
authorizations, consents or proceedings are required. This Agreement is a valid
and binding agreement of Seller and is enforceable in accordance with its terms
and conditions.
9.3 TAX RETURNS AND AUDIT. Seller has filed with the appropriate
agencies all tax returns and tax reports required by law to be filed by it and
(a) no audit of any federal, state or city income tax return or other tax return
is in progress or pending or threatened against Seller, (b) there exists no
unpaid federal, state or city income or other tax or any tax deficiency assessed
against Seller by any governmental authority having jurisdiction, (c) all
income, profits, franchise, sales, use, occupation, property, excise, ad valorem
and other taxes due have been fully paid by Seller, and (d) no waiver of any
statute of limitations has been given or is in effect with respect to the
assessment of any taxes against Seller. Seller has satisfied its entire
obligations with respect to employment taxes, wages paid and taxes withheld, and
has filed all returns, reports and statements with respect thereto, except for
those which are not yet due.
9.4 TITLE TO PROPERTIES. Seller has good and marketable title to
the Personal Property, including, without limitation, the Software, subject to
no mortgage, pledge, lien or other encumbrance.
9.5 FINANCIAL CONDITION OF SELLER. The balance sheet of Seller as
of December 31, 1999, a copy of which is attached hereto as EXHIBIT 9.5A, and
the balance sheet of Seller dated January 31, 2000, a copy of which is attached
hereto as EXHIBIT 9.5B (the "Balance Sheet"), fairly reflect and represent the
financial condition of Seller as of such dates.
9.6 INTELLECTUAL PROPERTY RIGHTS. Seller has exclusive rights in
the Software and any improvements, enhancements and additional inventions
relating thereto, and the other intangible assets described herein to be
transferred to Buyer. Any and all applicable federal and state registrations of
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patents, copyrights, trademarks or other intellectual property rights possessed
by Seller, if any, have been disclosed to Buyer and shall be assigned by Seller
to Buyer at Closing.
9.7 SOFTWARE. Seller is the owner of current, accurate copies of
all source code and object code comprising the Software and of all users'
manuals and other documentation listed on Exhibit 1.1.1. Seller's DataEXPRESS
(Tandem Version) Software described on Exhibit 1.1.1 operates in accordance with
the terms and specifications of such users' manuals, including those regarding
functionality, free and clear of any and all errors, defects or deficiencies.
Further, all source code with respect to the Software currently in escrow
pursuant to certain agreements between Seller and its client's or customers has
been updated as required therein.
9.8 YEAR 2000. The Software is Year 2000 Compliant, including date
century recognition, calculations which accommodate same century and
multi-century formulas and date values that reflect the century. As used herein,
"Year 2000 Compliant" shall mean the ability of the Software to provide the
following functions:
(a) consistently handle date information before, during
and after January 1, 2000, including but not limited
to accepting date input, providing date output, and
performing calculations on dates or portions of
dates; provided that where such input is provided by
other software/hardware, such other software/hardware
uses a four-digit year format or other
industry-standard format;
(b) function in accordance with all documentation without
interruption before, during and after January 1,
2000, associated with dates later than December 31,
1999; and
(c) store and provide output of date information in ways
that are unambiguous as to century.
9.9 NO BREACH OF STATUTE, DECREE, ORDER OR CONTRACT. Seller is not
in default under or in violation of, any applicable statute, law, ordinance,
decree, order, rule, regulation of any governmental body, or the provisions of
any franchise or license, or in default under, or in violation of, any provision
of Seller's articles of incorporation, bylaws, any promissory note, indenture or
any evidence of indebtedness or security therefor, lease, contract, purchase or
other commitment or any other agreement by which Seller is bound which may
result in a material adverse effect on the business or condition, financial or
otherwise, of Seller. The consummation of this Agreement and the transactions
contemplated hereby will not constitute or result in any such default, breach or
violation, and no governmental permits or consents are necessary to effect the
transactions contemplated herein.
9.10 LITIGATION. There is no suit, claim, action or proceeding now
pending before any court, administrative or regulatory body or any governmental
agency, which may result in any judgment, order, decree, liability or other
determination which will, or could, have a material adverse effect upon the
Personal Property, including, without limitation, the Software and, to the
Seller's knowledge, there is no such no suit, claim, action or proceeding
threatened. No judgment, order or decree has been entered which has, or will
have, such effect. There is no claim, action or proceeding now pending before
any court, administrative or regulatory body, or any governmental agency, which
will, or could, prevent or hamper the consummation of the transactions
contemplated by this Agreement and, to the Seller's knowledge, there is no such
claim, action or proceeding threatened.
9.11 LABOR AGREEMENTS, EMPLOYEE BENEFIT PLANS, AND EMPLOYMENT
AGREEMENTS. Seller is not a party to (a) any union collective bargaining or
similar agreement, (b) any profit-sharing, deferred
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compensation, bonus, stock option, stock purchase, pension, retainer,
consulting, retirement, welfare or incentive plan or agreement, whether legally
binding or not, (c) any plan providing for "fringe benefits" to its employees,
including, but not limited to, vacation, sick leave, medical, hospitalization,
life insurance and other insurance plans and related benefits, or (d) any
employment agreement not terminable on thirty (30) days written notice. There
are no negotiations, demands or proposals which are pending or have been made
which concern matters now covered, or that would be covered by the type of
agreements listed in this Section.
9.12 OVERTIME, BACK WAGES, VACATION AND MINIMUM WAGES. No present
or former employee of Seller has any claim against Seller (whether by law,
employment agreement, or otherwise) on account of or for: (a) overtime pay,
other than overtime pay for the current payroll period; (b) other than the
Accrued Payroll owed to Xxxxxxx, wages or salary for any period other than the
current payroll period; (c) vacation, time off or pay in lieu of vacation or
time off, or sick pay, except in each case, to the extent earned in the normal
course of employment; or (d) any violation of any statute, ordinance or
regulation relating to minimum wage or maximum hours of work.
9.13 DISCRIMINATION, OCCUPATIONAL SAFETY AND OTHER STATUTES AND
REGULATIONS. No person or party (including, but not limited to, governmental
agencies of any kind) has any claim, or basis for any action or proceeding
against Seller arising out of any statute, ordinance or regulation relating to
discrimination in employment or employment practices or occupational safety or
health standards.
9.14 LABOR DISPUTES; UNFAIR LABOR PRACTICES. There is not pending,
nor threatened, any labor dispute, strike or work stoppage which affects or
which may affect the business of Seller or which may interfere with the
continued operation of the Business.
9.15 PRODUCT WARRANTIES. Seller has delivered to Buyer copies of
all product warranties applicable to the Personal Property. No claims for breach
of warranty have been made by Seller and no amounts have been expended by Seller
pursuant to such warranties.
9.16 BROKERS FEES. No broker or finder is entitled to any brokerage
or finder's fee or other commission or fee based upon arrangements made by or on
behalf of Seller in connection with this Agreement or any of the transactions
contemplated hereby.
9.17 BOOKS AND RECORDS. The books of account, files and other
business records relating to the Business have been maintained in accordance
with good business practices, and the matters contained therein are complete and
correct in all material respects and fairly reflect the conduct of the Business
as of Closing.
9.18 CONSENTS; SUCCESSOR'S RIGHTS. No consent is necessary to
transfer the Personal Property to Buyer and, upon the consummation of the
transactions contemplated herein, Buyer will succeed to all of Seller's right,
title and interest in and to the Personal Property.
9.19 ACCURACY OF REPRESENTATIONS AND WARRANTIES.
9.19.1 No representation or warranty by Seller contained in
this Agreement (including the Exhibits attached
hereto), and no statement contained in any
certificate, schedule or report required to be
furnished by Seller pursuant to Sections 2.2, 2.3,
2.4 and/or 13.2 of this Agreement, contains or will
contain any material untrue statement of fact, nor
has Seller intentionally omitted or will Seller
intentionally omit to state a material fact necessary
in order to make the statements contained herein or
therein not misleading.
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9.19.2 All representations, warranties and statements made
by Seller in this Agreement (including the Exhibits
attached hereto) or in any certificate, schedule or
report required to be furnished by Seller pursuant to
Sections 2.2, 2.3, 2.4 and/or 13.2 of this Agreement
shall be true on and as of the Closing with the same
effect as if made on and as of the Closing, and shall
survive the execution, delivery and performance of
this Agreement, including the Closing hereunder, for
a period of one (1) year following Closing.
10. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer hereby makes
the following representations and warranties, each of which is true and correct
on the date hereof and will be true and correct at and as of Closing:
10.1 CORPORATE EXISTENCE AND QUALIFICATION. Buyer is a corporation
duly organized and validly existing under the laws of the State of Missouri and
has full power and authority to own its properties and to carry on its business
as it is now being conducted.
10.2 AUTHORIZATION OF AGREEMENT. The execution and delivery of this
Agreement has been duly authorized and approved by Buyer's Board of Directors
and all necessary action of Buyer's shareholders, if any. Buyer represents and
warrants that it has the right, power, legal capacity and authority to enter
into and perform their respective obligations under this Agreement and that no
consent or approval of, notice to or filing with any governmental authority
having jurisdiction over any aspect of the business or assets of Buyer, and no
consent or approval of or notice to any other person or entity is required in
connection with the execution and delivery by Buyer of this Agreement or the
consummation by Buyer of the transactions contemplated hereby.
10.3 NO BREACH. The execution, delivery and performance of this
Agreement by Buyer and the consummation of the transactions contemplated hereby
and thereby, do not and will not result in or constitute any of the following:
(i) a breach of any term or provision of this Agreement; (ii) a default, breach
or violation, or an event that, with notice or lapse of time or both, would be a
default, breach or violation of any of the terms, conditions or provisions of
the Articles of Incorporation or By-Laws of Buyer; (iii) a default, breach or
violation, or an event that, with notice or lapse of time or both, would be a
default, breach or violation of any of the terms, conditions or provisions of,
or any lease, license, promissory note, security agreement, commitment,
indenture, mortgage, deed of trust or other agreement, instrument or arrangement
to which Buyer is a party or by which it or its property is bound; (iv) an event
that would permit any party to terminate or rescind any agreement to accelerate
the maturity of any indebtedness or other obligation of Buyer, or (v) the
creation or imposition of any lien, charge or encumbrance on any of the
properties of Buyer.
10.4 TRADING ON THE NASDAQ NATIONAL MARKET. The shares of Buyer's
Common Stock are currently registered for trading on the NASDAQ National Market
under the symbol "EPIQ".
10.5 FORM 10-Q. The Buyer's Prospectus (attached hereto as EXHIBIT
10.5A) and the Form 10-Q (attached hereto as EXHIBIT 10.5B) do not contain any
untrue statements of material fact or, to Buyer's knowledge, omit to state any
material fact necessary to make the statements contained therein, in light of
the circumstances under which they were made, not misleading.
10.6 ACCESS. Buyer has received and reviewed information about
Seller and has had an opportunity to discuss Seller's business and financial
affairs with its management and to review Seller's facilities. Buyer understands
and acknowledges that such discussions, as well as any written information
issued by Seller, may have contained forward-looking statements involving known
and unknown risks and uncertainties that may cause Buyer's actual results in
future periods to differ materially from what was anticipated and that no
representations or warranties were or are being made with respect to such
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forward-looking statements or the probability of achieving any of the results
projected in any of such forward-looking statements.
10.7 BROKER'S FEES. No broker or finder is entitled to any
brokerage or finder's fee or other commission or fee based upon arrangements
made by or on behalf of Buyer in connection with this Agreement or any of the
transactions contemplated hereby.
10.8 SURVIVAL; CLOSING. All representations, warranties and
agreements made by Buyer in or pursuant to this Agreement shall be true on and
as of the Closing with the same effect as if made on and as of the Closing, and
shall survive the execution, delivery and performance of this Agreement,
including the Closing hereunder, for a period of one (1) year following Closing.
11. CONDITIONS PRECEDENT TO OBLIGATIONS TO CLOSE.
11.1 CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. All obligations
of Buyer under this Agreement are subject to the fulfillment of each of the
following conditions on or before Closing, subject, however, to the right of
Buyer to waive any one or more of such conditions:
11.1.1 DUE DILIGENCE. Buyer shall have completed its due
diligence telephone calls to three or four of
Seller's customers and to two of Seller's key
contractors (the "Due Diligence Investigation") to
investigate, to its satisfaction, the relationships
of such parties with Seller and the Business and
their current intentions regarding their future with
Seller, and so notified Seller on or before March 7,
2000. Seller agrees that it shall grant to Buyer's
representatives access to the Business and the
Personal Property prior to Closing to conduct such
Due Diligence Investigation. Notwithstanding anything
to the contrary herein, such access shall not be
exercised so as to unreasonably interfere with
Seller's business.
11.1.2 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Seller contained in
this Agreement shall be true and correct as of
Closing as though such representations and warranties
were made at Closing.
11.1.3 EMPLOYMENT AGREEMENT, CONSULTING AGREEMENT AND
INDEMNITY AGREEMENT. Buyer shall have entered into
the Employment Agreement, the Consulting Agreement
and the Indemnity Agreement, as referred to in
Sections 5, 6 and 7 respectively, with Xxxxxxx on or
before the Closing, pursuant to which each will agree
to perform the services specified in the Employment
Agreement, Consulting Agreement and Indemnity
Agreement, respectively.
11.1.4 NO ADVERSE CHANGE IN BUSINESS, PROPERTIES OR
FINANCIAL CONDITION. The Personal Property and the
Business shall not be or shall not have been,
materially and adversely affected, whether or not
covered by insurance, as a result of fire, explosion,
earthquake, disaster, accident, labor dispute, any
action of the United States or other governmental
authority, riots, civil disturbances, uprising,
activity of the Armed Forces, or act of God or the
public enemy; and there shall not have occurred any
material adverse change in the condition of the
Personal Property, taken as a whole. Prior to
Closing, Seller shall operate the Business in the
ordinary course of business and consistent with its
past practices, and Seller shall not make any
distributions of its cash to any entity other than in
the ordinary course of business and to Buyer;
provided, however, that Seller may make
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payments to Xxxxxxx under the Shareholders Notes
Payable using amounts borrowed under the Bank Lines
of Credit.
11.1.5 COMPLIANCE WITH AGREEMENT. Seller shall have
performed and complied in all material respects with
all obligations under this Agreement which are to be
performed or complied with by it prior to Closing.
11.1.6 OTHER DELIVERIES. The deliveries referred to in
Sections 2.2, 2.3, 2.4 and 13.2 shall have been made
by Seller.
11.1.7 REQUIRED CONSENTS. Seller shall have obtained all of
the consents required from parties to the specific
contracts and agreements listed on EXHIBIT 11.7 (the
"Required Contracts") necessary for Seller to assign
the Required Contracts to Buyer. If Buyer elects to
consummate Closing hereunder despite not having
received any third party consents prior to the
Closing Date, then Buyer will thereby have waived any
further obligation of Seller to seek such consents
and have released Seller from any liability for the
failure to have obtained such consents.
11.2 CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. All obligations
of Seller under this Agreement are subject to the fulfillment of each of the
following conditions on or before Closing, subject, however, to the right of
Seller to waive any one or more of such conditions:
11.2.1 DUE DILIGENCE. Buyer shall have completed the Due
Diligence Investigation and so notified Seller in
writing on or before March 7, 2000.
11.2.2 CORRECTNESS OF REPRESENTATIONS AND WARRANTIES. The
representations and warranties of Buyer contained in
this Agreement shall be true and correct as of
Closing as though such representations and warranties
were made at Closing.
11.2.3 EMPLOYMENT AGREEMENT, CONSULTING AGREEMENT, INDEMNITY
AGREEMENT, AND PARENT GUARANTY. Buyer or a subsidiary
thereof, as applicable, shall have entered into the
Employment Agreement, the Consulting Agreement and
the Indemnity Agreement, as referred to in Sections
5, 6 and 7 respectively, with Xxxxxxx on or before
the Closing. Further, Buyer shall have executed and
delivered to Xxxxxxx a guaranty agreement in the form
attached hereto as EXHIBIT 11.2.3 (the "Guaranty"),
pursuant to which Buyer shall guaranty the
obligations of its subsidiary corporation under the
Employment Agreement and the Consulting Agreement.
11.2.4 COMPLIANCE WITH AGREEMENT. Buyer shall have performed
and complied in all material respects with all
obligations under this Agreement which are to be
performed or complied with by it prior to Closing.
11.2.5 PAYMENT AND OTHER DELIVERIES. The Seller shall have
received the payment of the Purchase Price as
required by Section 3, and the Seller shall have
received the other deliveries referred to in Section
13.3 below.
11.2.6 REQUIRED CONSENTS. The approvals of the Board of
Directors of the Seller shall have been obtained.
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12. COVENANTS.
12.1 COVENANTS OF SELLER.
12.1.1 DISCLOSURE OF INFORMATION. Seller recognizes and
acknowledges that it is possessed of certain valuable and confidential
information relating to the Personal Property, the Software and the Business.
Further, Seller recognizes and acknowledges that such information is
valuable, special and essential to the successful and effective conduct of
the Business by Buyer after Closing. Therefore, Seller shall not, itself, or
through any agent or representative, disclose or otherwise communicate any of
the foregoing confidential information to any person, firm, corporation or
other entity, for any reason or purpose whatsoever, except as may be
reasonably necessary in connection with the transactions contemplated herein.
12.1.2 NONCOMPETITION. Seller covenants and agrees that,
provided that Buyer is not in default or in breach of any of its obligations
under the Agreement or any of the exhibits attached hereto, for a period of
five (5) years following Closing it will not, directly or indirectly, through
any person, corporation, firm or other entity: (i) engage in any business
that competes with the Buyer's business; (ii) advise, consult with, or
provide services to any person, corporation, firm or entity with respect to
any business that competes with the Buyer's business, irrespective whether or
not Seller receives any compensation for such advice or consultation; or
(iii) invest in, loan money to or otherwise provide financial assistance to
any business engaged in whole or part in a business that competes with the
Buyer's business; provided, however, that the foregoing provision shall not
be construed to prohibit or restrict Seller from investing in publicly traded
securities of a business that competes with the Buyer's business so long as
such investment does not result in Seller obtaining an ownership interest in
such competing business equal to or greater than five percent (5%).
12.1.3 NONSOLICITATION. Seller covenants and agrees that,
provided that Buyer is not in default or in breach of any of its obligations
under this Agreement or any of the exhibits attached hereto, for a period of
five (5) years following the execution of this Agreement Seller will not,
directly or indirectly, itself, or through any other person, corporation,
firm or entity, do any of the following acts:
12.1.3.1 Solicit, serve or cater to any of Buyer's customers
or clients in connection with the Business ("Buyer's Customers");
12.1.3.2 Divert, or attempt to divert, any of the business or
patronage of any of Buyer's Customers;
12.1.3.3 Call upon, influence or attempt to influence any of
Buyer's Customers to transfer their business from Buyer to any other person,
firm, corporation or entity engaged in a similar business; or
12.1.3.4 Hire or attempt to hire any current or former
employee of the Business; provided, however, that subject to the restrictions
contained in Section 12.1.2 above, Seller shall not be prohibited from hiring
Xxxxxxx Xxxxxxxx and/or Xxxxxxx Xxxxxxxx to engage in a business which does
not compete with the business of Buyer (as Buyer may be engaged in now or in
the future) following the later of either: (a) termination of both the
Employment Agreement and the Consulting Agreement; or (b) the end of the two
(2)-year period following Closing. Nothing herein shall prevent, prohibit or
restrict Xxxxxxx Xxxxxxxx from serving as trustee of Seller's 401K plan
following Closing.
12.1.4 ENTITLEMENT TO INJUNCTION. In the event of the breach
or threatened breach of the provisions of Sections 12.1.1, 12.1.2 or 12.1.3
hereof, Buyer shall be entitled to an injunction restraining Seller from such
breach or threatened breach. Nothing contained herein shall be construed to
prohibit
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Buyer from pursuing any other remedies available to it for such breach or
threatened breach, including recovery of damages from Seller.
12.2 COVENANTS OF BUYER.
12.2.1 CONFIDENTIALITY. From the date hereof until the
Closing Date:
12.2.1.1 Buyer agrees to, and to cause its employees and
agents to, protect the confidentiality of all proprietary and confidential
information received from Seller pursuant to this Agreement or otherwise,
using the same care and procedures used to protect Buyer's own proprietary
and confidential information, and agrees not to disclose such proprietary and
confidential information to any other persons, corporations, firms or other
entities, except as may be reasonably necessary in connection with the
transactions contemplated herein or except to the extent (i) such information
is acquired, disclosed or otherwise obtained from non-confidential sources
and not in breach of Buyer's obligations hereunder or any other party's
confidentiality obligations owed to Seller, (ii) such information is required
to be disclosed by law or by governmental authorities having jurisdiction
over Buyer, (iii) such information was known by Buyer prior to any disclosure
by Seller, or (iv) disclosure is necessary for Buyer to enforce any or all of
its rights under this Agreement.
12.2.1.2 Buyer agrees not to contact or attempt to contact
any of the Seller's clients or customers without Seller's prior express
approval, which approval shall not be unreasonably withheld or delayed, and
which may be conditioned upon, among other things, permitting Seller to
participate in all such contacts.
12.2.2 EMPLOYEES. On the Closing Date, Buyer shall offer
employment to such of Seller's employees as Buyer deems appropriate, in its
sole discretion, and will provide employee benefits to such employees in
accordance with Buyer's standard employee benefit plans, which benefits may
be amended or changed from time to time; provided, however, that such
employees will have a service credit with Buyer equal to their tenure with
Seller and will receive benefits accordingly, subject to the terms,
conditions and requirements of such plans and applicable law.
12.3 COVENANTS OF BUYER AND SELLER.
12.3.1 ANNOUNCEMENTS; CONFIDENTIALITY. The parties agree
to cooperate in any announcements with respect to the transactions
contemplated hereby, including but not limited to the preparation of a
detailed time and events table for mutual approval reasonably in advance of
the Closing Date. Seller acknowledges that Buyer will make a public
announcement regarding the transactions contemplated by this Agreement prior
to Closing. Accordingly, prior to such public announcement, the parties agree
to, and to cause their employees and agents to, protect the confidentiality
of this Agreement and the transactions contemplated herein, and agree not to
disclose any information regarding this Agreement and the transactions
contemplated herein to any other persons, corporations, firms or other
entities, except as may be reasonably necessary in connection with the
transactions contemplated herein or except to the extent: (i) such
information must necessarily be disclosed to Seller's clients or customers
for purposes of obtaining the consents necessary for Seller to assign the
Required Contracts to Buyer, in which case such clients or customers shall be
advised of the confidential nature of this Agreement and the transactions
contemplated herein; (ii) such information is required to be disclosed by law
or by governmental authorities having jurisdiction over Buyer or Seller, as
the case may be; or (iii) disclosure is necessary for Buyer or Seller to
enforce any or all of its respective rights under this Agreement.
12.4 FURTHER ASSURANCES. Buyer shall execute such documents and
other papers and take such further actions as may be reasonably required or
desirable to carry out the provisions hereof and the
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transactions contemplated hereby. Buyer shall use its best efforts to fulfill or
obtain the fulfillment of the conditions to the Closing as promptly as
practicable.
12.5 ENFORCEABILITY AND SEVERABILITY. It is mutually understood and
agreed by and between the parties that the covenants contained in Section 12.1
hereof are fair and reasonable, and are reasonably required for the protection
of Buyer. If the scope of any restriction contained in this Agreement is too
broad to permit enforcement of such restriction to its fullest extent, then such
restriction shall be enforced to the maximum extent permitted by law, and the
parties consent and agree that such scope may be judicially modified accordingly
in any proceeding brought to enforce such restriction. The parties further agree
that the covenants are separable, severable and divisible in all respects, and
the unenforceability of any specific covenant or undertaking shall not affect
the validity of any other such covenants or undertakings.
13. CLOSING.
13.1 TIME AND PLACE. Closing under this Agreement for the sale and
purchase of the Personal Property ("Closing") shall take place in Kansas City,
Missouri, at a time to be determined by the parties, on a date (the "Closing
Date") no later than ten (10) days after Buyer releases its due diligence
contingency; provided, however, that in no event shall Closing occur later than
March 17, 2000.
13.2 SELLER'S CLOSING DELIVERIES. At Closing, Seller shall deliver
to Buyer:
13.2.1 Bills of sale, assignments, and other good and
sufficient instruments of transfer and conveyance as,
in the opinion of Buyer's counsel, shall be effective
to vest in Buyer good and marketable title to the
Personal Property, free and clear of all
encumbrances;
13.2.2 Certified resolutions of Seller's board of directors
and shareholders approving the execution of this
Agreement and the consummation of the transactions
described herein;
13.2.3 A certificate of good standing for Seller from its
state of incorporation, dated within thirty (30) days
prior to Closing;
13.2.4 The Employment Agreement, duly executed by Xxxxxxx,
in the form of EXHIBIT 6 attached hereto;
13.2.5 The Consulting Agreement, duly executed by Xxxxxxx,
in the form of EXHIBIT 7 attached hereto;
13.2.6 The Indemnity Agreement, duly executed by Xxxxxxx, in
the form of EXHIBIT 8 attached hereto;
13.2.7 Seller's current accounts receivable and accounts
payable aging reports, updated as of the close of
business on the day immediately preceding Closing;
and
13.2.8 Any such other documentation as Buyer's counsel may
reasonably request to effect the transaction
described herein.
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13.3 BUYER'S CLOSING DELIVERIES. At Closing, Buyer shall deliver to
Seller:
13.3.1 The purchase price called for by Section 3(a) hereof,
by certified or cashier's check or wire transfer;
13.3.2 Evidence of payment of the Shareholders Notes Payable
and/or the Bank Lines of Credit, as called for in
Section 4 above;
13.3.3 The Employment Agreement, duly executed by a
subsidiary of Buyer, in the form of EXHIBIT 6
attached hereto;
13.3.4 The Consulting Agreement, duly executed by a
subsidiary of Buyer, in the form of EXHIBIT 7
attached hereto;
13.3.5 The Indemnity Agreement, duly executed by Buyer, in
the form of EXHIBIT 8 attached hereto;
13.3.6 The Guaranty, duly executed by Buyer, in the form of
EXHIBIT 11.2.3 attached hereto; and
13.3.7 Any such other documentation as Seller's counsel may
reasonably request to effect the transaction
described herein.
14. TERMINATION. This Agreement may be terminated prior to the
Closing as follows: (a) at the election of Seller, if any one or more of the
conditions to its obligations to close has not been fulfilled as of the Closing
Date; (b) at the election of Buyer, if any one or more of the conditions to its
obligation to close has not been fulfilled as of the Closing Date; or (c) at any
time on or prior to the Closing Date, by mutual written consent of Seller and
Buyer. In the event that Buyer or Seller, as the case may be, elects to
terminate this Agreement pursuant to this Section 14, the terminating party
shall deliver a notice to the other party declaring its election to so terminate
this Agreement in accordance with the provisions of this Section 14, and setting
forth therein the basis for such termination. If this Agreement is terminated
and the transactions contemplated hereby are not consummated as described above,
then this Agreement shall become void and of no further force and effect, except
for the terms and conditions set forth in Section 12.2.1.1, which shall survive
termination for any reason.
15. MISCELLANEOUS.
15.1 FURTHER ASSURANCES. Each party hereto shall execute such
further instruments and documents as counsel for the other party may reasonably
require to carry out effectively the transactions contemplated hereby and to
evidence the fulfillment of the agreements contained herein and the performance
of all conditions to the consummation of such transactions.
15.2 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement of the parties and may not be modified, terminated or discharged
unless in writing, signed by both parties.
15.3 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
and inure to the benefit of the parties hereto, and their respective heirs,
representatives, successors and assigns.
15.4 SELLER'S INDEMNIFICATION. Subject to the limitations set forth
in Section 15.6, Seller agrees to indemnify, defend, protect and hold harmless
Buyer from and against any losses, damages,
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liabilities, costs and/or expenses, including reasonable attorneys' fees
(collectively, the "Losses"), which may be suffered or incurred by Buyer arising
from or by reason of: (i) the breach of any representation or warranty of Seller
made herein; (ii) any undisclosed liabilities of Seller arising from the conduct
of any business of Seller prior to Closing being asserted against Buyer; and/or
(iii) any claims of Seller's creditors under the Bulk Sales Act of the Uniform
Commercial Code of the State of California, not assumed by Buyer hereunder.
15.5 BUYER'S INDEMNIFICATION. Subject to the limitations set forth
in Section 15.6, Buyer hereby agrees to indemnify, defend, protect and hold
harmless Seller and Xxxxxxx (jointly and severally) from and against any Losses
which may be suffered or incurred by Seller and/or Xxxxxxx arising from or by
reason of: (i) the breach of any representation or warranty of Buyer made
herein; (ii) the conduct or operation of the Buyer's business from and after
Closing; and/or (iii) the obligations arising or to be performed under the
Assumed Contracts after Closing.
15.6 INDEMNIFICATION PROCEDURE; LIMITATION OF LIABILITY. Promptly
after Buyer, Seller or Xxxxxxx becomes aware of any fact, condition or event
that may give rise to any Losses for which indemnification may be sought by such
party under Section 15.4 or Section 15.5, the party entitled to indemnification
("Indemnitee") shall give notice thereof in the manner provided in Section 15.9
of this Agreement (the "Claims Notice") to the other party ("Indemnitor"). The
Claims Notice shall include a description in reasonable detail of any claim or
the commencement (or threatened commencement) of any action, proceeding or
investigation (an "Asserted Liability") against Indemnitee, and shall indicate
the amount (estimated, if necessary) of the Losses that have been or may be
suffered by Indemnitee. Failure of Indemnitee to promptly give notice hereunder
shall not affect rights to indemnification hereunder, except to the extent that
Indemnitor demonstrates actual damage caused by such failure. Upon Indemnitor's
request, Indemnitee shall provide Indemnitor with such reasonable documentation
as Indemnitor shall request pertaining to any claim(s) made by Indemnitee.
Indemnitor may elect to compromise or defend, at its own expense and by its own
counsel, any Asserted Liability; provided, that Indemnitor may not compromise or
settle any Asserted Liability without the consent of Indemnitee, such consent
not to be unreasonably withheld, unless such compromise or settlement requires
no more than a monetary payment for which Indemnitee and any other indemnifiable
parties hereunder are fully indemnified or involves other matters not binding
upon Indemnitee or such other indemnifiable parties. If Indemnitor elects to
compromise or defend such Asserted Liability, it shall within 15 days (or
sooner, if the nature of the Asserted Liability so requires) notify Indemnitee
of its intent to do so and Indemnitee shall cooperate in the compromise of, or
defense against, such Asserted Liability. If Indemnitor elects not to compromise
or defend any Asserted Liability, fails to notify Indemnitee of its election as
herein provided or contests its obligation to indemnify, Indemnitee may pay,
compromise or defend such Asserted Liability without prejudice to any right it
may have hereunder. In any event, each of Buyer, Xxxxxxx and Seller may
participate, at its own expense, in the defense of any Asserted Liability in
respect of which it may have an indemnification obligation under Sections 15.4
or 15.5. If any party chooses to defend or participate in the defense of any
Asserted Liability, it shall have the right to receive from the other party any
books, records or other documents within such party's control that are necessary
or appropriate for such defense. The provisions for indemnification set forth in
Sections 15.4 and 15.5 are the exclusive monetary remedies of the parties hereto
with respect to the matters addressed in those sections. Notwithstanding any
contrary provision set forth in this Agreement:
(a) Seller's liability for Losses incurred by Buyer for
which no Claims Notice has been given shall terminate
at midnight on that date which is twelve (12) months
after the Closing Date;
(b) Seller shall not be liable to Buyer with respect to
Losses incurred by Buyer except to the extent that
such Losses exceed $100,000 in the aggregate;
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(c) Seller's aggregate liability for Losses incurred by
Buyer arising from Seller's breach of its
representation and warranty in Section 9.6 that it
has exclusive rights in its DataEXPRESS (Tandem
Version) Software product (other than trademark
rights and as otherwise disclosed herein) and any
improvements, enhancements and additional inventions
relating thereto, and Seller's aggregate liability
for Losses incurred by Buyer arising from claims made
by any current employee, contractor or agent of
Seller that such employee, contractor or agent has
proprietary rights (other than trademark rights and
as otherwise disclosed herein) to the Software and/or
any improvements, enhancements and additional
inventions relating thereto made prior to Closing,
shall not exceed $4,400,000;
(d) Seller's aggregate liability for Losses incurred by
Buyer arising from Seller's breach of its
representation and warranty in Section 9.6 that it
has exclusive rights in its DataEXPRESS (JAVA
Version) Software product (other than trademark
rights and as otherwise disclosed herein) and any
improvements, enhancements and additional inventions
relating thereto, and Seller's aggregate liability
for Losses incurred by Buyer arising from claims made
by any party other than a current employee,
contractor or agent of Seller that such party has
proprietary rights (other than trademark rights and
as otherwise disclosed herein) to Seller's
DataEXPRESS (JAVA Version) Software product and any
improvements, enhancements and additional inventions
relating thereto made prior to Closing, shall not
exceed $2,500,000; and
(e) Seller's aggregate liability for Losses incurred by
Buyer other than those Losses described in
subsections (c) and (d) above shall not exceed
$1,000,000.
Notwithstanding anything in the foregoing to the contrary, in
no event shall Seller's aggregate indemnification obligation
hereunder exceed $4,400,000.
15.7 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or any breach hereof shall be decided and settled by
binding arbitration in accordance with Title 9 of the U.S. Code (United States
Arbitration Act) and the Commercial Arbitration Rules of the American
Arbitration Association then in effect, subject to the limitations and
restrictions set forth below. Notice of a demand for arbitration shall be filed
in writing with the other parties to this Agreement and with the American
Arbitration Association. Notice of such demand shall be made promptly after such
claim or dispute arises and in no event may the demand for arbitration be made
if institution of legal or equitable proceedings arising out of such claims or
dispute would be barred by the applicable statue of limitations. If such claim
or dispute arises solely out of Buyer's alleged failure to pay to Seller any
amounts owed hereunder, then the place of arbitration shall be San Francisco,
California. If such claim or dispute does not arise solely out of Buyer's
alleged failure to pay to Seller any amounts owed hereunder, then the place of
arbitration shall be Kansas City, Kansas. The arbitrator(s) shall have the
discretion to order a pre-hearing exchange of information by the parties,
including, without limitation, production of requested documents, exchange of
summaries of testimony of proposed witnesses, and examination by depositions of
parties. In the event that the arbitrator(s) find that any provision of this
Agreement is vague or ambiguous, the parties agree that the arbitrator(s) shall
construe such provision in accordance with the intent of the parties as
determined by the arbitrator(s); and the arbitrator(s) shall not disregard or
eliminate any such provision. Notwithstanding any contrary provision contained
herein, Buyer may in its sole discretion file an action with a court seeking
equitable or injunctive relief to maintain the status quo until such time as the
arbitration award is rendered or the controversy is otherwise resolved. Because
this Agreement has been made and entered into in the State of Kansas and is
governed by the laws of the State of Kansas, the parties consent to and waive
any objection to the jurisdiction of and venue in any state or
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xxxxxxx xxxxx located in Wyandotte County, Kansas. If, however, a claim or
dispute arises solely out of Buyer's alleged failure to pay to Seller any
amounts owed hereunder, then the parties shall agree to consent to and waive any
objection to the jurisdiction of and venue in any federal court located in San
Francisco, California. The award rendered by the arbitrator(s) may be entered
and enforced in any court having jurisdiction thereof.
15.8 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas.
15.9 NOTICES. All notices required to be made by this Agreement
shall be in writing and shall be deemed made when delivered personally, or sent
by facsimile (with confirmed receipt), or sent by certified or registered mail,
postage prepaid, as of three (3) days after the date when postmarked by the
United States Postal Service, as set forth below:
To Buyer: Electronic Processing, Inc.
000 Xxxxxx Xxx.
Xxxxxx Xxxx, Xxxxxx 00000
Facsimile No.: 000-000-0000
Attention: Xxxxxxxxxxx X. Xxxxxxx,
President and Chief Operating Officer
With a copy to: Seigfreid, Bingham, Levy, Xxxxxx & Xxx
0000 Xxxxxxxx Xxxxx
000 Xxxx
Xxxxxx Xxxx, Xxxxxxxx 00000
Facsimile: 816-474-3447
Attention: Xxxxxx X. Xxxx, Esq.
To Seller: PHiTECH, Incorporated
000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No.: 000-000-0000
Attention: Xxxxx X. Xxxxxxx
With a copy to: MBV Law, LLP
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile No. 000-000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Any party may give notice of a change of address or facsimile number in
accordance with provision herein.
15.10. CAPTIONS. The captions or headings in this Agreement are
inserted herein for convenience of reference only and shall not be construed to
describe, define or limit the scope or intent of the provisions of this
Agreement.
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IN WITNESS WHEREOF, the parties have executed this Agreement in
multiple counterparts, each of which when delivered, whether by hand, mail or
facsimile, shall be considered an original but shall constitute one and the same
instrument, effective as of the day and year first above written. Signature
received via facsimile shall be binding as to the xxxxxx in the same capacity as
an original signature.
THIS AGREEMENT CONTAINS A BINDING ARBITRATION PROVISION
WHICH MAY BE ENFORCED BY THE PARTIES.
ELECTRONIC PROCESSING, INC. PHITECH, INC.
By: /s/ XXXXXXXXXXX X. XXXXXXX By: /s/ HINDRA X. XXXXXXX
------------------------------------- ---------------------------
Xxxxxxxxxxx X. Xxxxxxx, Hindra X. Xxxxxxx,
President and Chief Operating Officer President
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