AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement") is entered into as
of this 3rd day of April, 2000 by and among (i) XXXXXXXXXXX.XXX, INCORPORATED, a
Nevada corporation ("HomeSeekers"); (ii) XXXXXXXXXXXXXXX.XXX, INCORPORATED, a
Nevada corporation and wholly owned subsidiary of HomeSeekers ("Subsidiary");
(iii) INFORMATION SOLUTIONS GROUP, INC., a Colorado corporation ("ISG"); and
(iv) the following named shareholders of ISG (collectively, the "Principal
Shareholders").
Name of Shareholder Address Number of Shares Owned
XXXXXXX XXXXX 0000 Xxxxxxxx Xxx 000,000
Xxxxxxx, XX 00000
XXXXXX XXXXXXXXXX 0000 Xxxxx Xxxxx 000,000
Xxxx, XX 00000
XXXX XXXXXXX 0000 Xxxxxxxx Xxxx 000,000
Xxxxxxx, XX 00000
XXXXXXX O'DAY 0000 Xxxxxxx Xxxxx 000,000
Xxxx, XX 00000
RECITALS
A. The Boards of Directors of HomeSeekers, Subsidiary and ISG have
deemed it advisable that HomeSeekers and ISG combine their operations by a
merger of ISG into Subsidiary, under the terms and conditions hereinafter set
forth (the "Merger").
B. The Boards of Directors of HomeSeekers, Subsidiary and ISG have
approved and adopted this Agreement and Plan of Merger (as defined below) and
intend that, to the extent possible, the Merger qualify for federal income tax
purposes as a reorganization within the meaning of Section 368 of the Internal
Revenue Code of 1986, as amended (the "Code");
C. The Board of Directors of HomeSeekers, Subsidiary and ISG have
determined that it is in the best interests of their respective shareholders for
HomeSeekers to acquire all of the issued and outstanding common stock, par value
$.01 per share, of ISG (the "ISG Common Stock"). In order to effectuate the
acquisition, the parties have agreed, subject to the terms and conditions set
forth in this Agreement, to merge ISG with and into Subsidiary so that
Subsidiary continues as a surviving corporation and wholly-owned subsidiary of
HomeSeekers, and the owners of all issued and outstanding shares of the common
stock of ISG as of the Closing (the
"ISG Shareholders") will be issued certain shares of common stock of
HomeSeekers, in exchange for all of the ISG Common Stock.
TERMS OF AGREEMENT
In consideration of the mutual representations, warranties, covenants
and agreements herein contained and subject to the conditions and other terms
herein contained, the parties hereto agree as follows:
ARTICLE I
THE MERGER
1.1 The Merger. Upon performance (or waiver) of all covenants and
obligations of the parties contained herein and upon fulfillment (or waiver) of
all conditions to the obligations contained herein, and pursuant to Chapter 92A
of the Nevada Revised Statutes ("NRS") and Article III of Title 7 of the
Colorado Revised Statutes ("CRS"), at the Effective Date (as defined below) the
following will occur:
(a) ISG will be merged with and into Subsidiary, with Subsidiary being
the surviving corporation (the "Surviving Corporation") and the separate
existence and corporate organization of ISG will cease, and thereupon Subsidiary
will be a wholly-owned subsidiary of HomeSeekers;
(b) Subsidiary, as the Surviving Corporation, will succeed, in so far
as permitted by law, to all rights, assets, liabilities and obligations of ISG
in accordance with the NRS and the CRS;
(c) The Articles of Incorporation and Bylaws of Subsidiary will be the
Articles of Incorporation and Bylaws of the Surviving corporation until amended
as provided by law;
(d) The officers and directors of Subsidiary will be the initial
officers and directors of the Surviving Corporation on and after the Effective
Date.
ARTICLE II
PURCHASE PRICE/CONVERSION OF SECURITIES
2.1 Conversion of ISG Shares in the Merger. On the Effective Date, by
virtue of the Merger and without any action on the part of ISG, HomeSeekers, or
the ISG Shareholders:
(a) all shares of common stock, par value $.01 per share, of
ISG ("ISG Common Stock") owned by ISG shall be canceled and shall cease to exist
from and after the Effective Date; and
(b) each remaining issued and outstanding share of ISG Common
Stock shall be converted into, and become exchangeable for, the number of shares
of validly issued, fully
Agreement and Plan of Merger
April 3, 2000
Page -3-
paid and nonassessable common stock, $.001 par value, of HomeSeekers (rounded to
the nearest whole share) ("HomeSeekers Common Stock") equal to the Conversion
Ratio. In this Agreement, the term "Conversion Ratio" means a fraction, the
numerator of which is equal to (i) Four Million Two Hundred Thirty-Eight
Thousand Four Hundred Sixty-Five Dollars ($4,238,465), divided by (ii) the
average closing sale price of a share of HomeSeekers Common Stock as quoted on
the Nasdaq Stock Market ("Nasdaq") for the ten (10) consecutive trading days
which precede the day immediately prior to the Closing Date, as reported (absent
manifest error in the printing thereof) by The Wall Street Journal (Western
Edition) (the "Average Closing Sale Price"); and the denominator of which is
equal to 906,137, the sum of the number of shares of ISG Common Stock issued and
outstanding as of the date of this Agreement.
(c) If the value of one third (1/3) of the HomeSeekers Shares
into which the ISG Shares are converted pursuant to Section 2.1 of this
Agreement on the first anniversary of the Closing Date is less than One Million
Four Hundred Twelve Thousand Eight Hundred Twenty-Two Thousand Dollars
($1,412,822), then HomeSeekers shall deliver to the ISG Shareholders the
aggregate number of additional shares of HomeSeekers common stock equal to the
difference in value between One Million Four Hundred Twelve Thousand Eight
Hundred Twenty-Two Thousand Dollars ($1,412,822) and the value of one third
(1/3) of the HomeSeekers Shares into which the ISG Shares are converted pursuant
to Section 2.1 of this Agreement. For purposes of valuing the shares, the
applicable number of shares will be multiplied by the average closing price of a
share of HomeSeekers stock on the Nasdaq or other applicable exchange for the
ten trading days preceding the first anniversary of the Closing Date.
2.2 Status of Subsidiary Shares. On the Effective Date, by virtue of
the Merger and without any action on the part of any holder of any capital stock
of Subsidiary, each issued and outstanding share of common stock of Subsidiary
shall continue unchanged and remain outstanding as a share of common stock of
the Surviving Corporation.
2.3 Additional Consideration.
(a) If (i) the ISG Formulator product revenues for the
calendar year 2000 in accordance with generally accepted accounting principles
("GAAP") exceed the ISG Formulator product revenues for the calendar year 1999
in accordance with GAAP, and (ii) the value of the HomeSeekers Shares into which
the ISG shares are converted pursuant to section 2.1 of this Agreement, based on
the average closing price for the ten trading days preceding the first
anniversary of the Closing Date, is less than Five Million Eight Hundred
Forty-Six Thousand One Hundred Fifty-Nine Dollars ($5,846,159), then, upon the
first anniversary of the Closing Date, HomeSeekers shall deliver to the ISG
Shareholders the aggregate number of additional shares of HomeSeekers common
stock, based on the average closing price for the ten trading days preceding the
first anniversary of the Closing Date, equal to 2.2 multiplied by the amount by
which the ISG Formulator product revenues for the calendar year 2000 in
accordance with
Agreement and Plan of Merger
April 3, 2000
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GAAP exceed the ISG Formulator product revenues for the calendar year 1999 in
accordance with GAAP.
(b) The consideration referred to in this Section 2 is
hereinafter referred to as the "Merger Consideration."
ARTICLE III
CLOSING
3.1 Time and Place. Subject to the terms and conditions of this
Agreement, the closing of the Merger (the "Closing") shall take place at such
time and place as the parties may agree. The date on which the Closing occurs
shall be referred to as the "Closing Date." It is contemplated that the Closing
will occur on April 3, 2000.
3.2 Filing of Plan of Merger. At the Closing, the parties shall cause
the Merger to be consummated by filing duly executed Articles of Merger, or an
Agreement of Merger, as applicable, with the Secretaries of State of the States
of Nevada and Colorado in such form as HomeSeekers determines is required by and
in accordance with the relevant provisions of the NRS and the CRS (the date of
such filing is referred to herein as the "Effective Date").
3.3 Effect of the Merger. On the Effective Date, the effect of the
Merger shall be as provided under the NRS and the CRS. Without limiting the
generality of the foregoing, on the Effective Date:
(a) all property, rights, privileges, policies and franchises
of ISG and Subsidiary shall vest in the Surviving Corporation and all debts,
liabilities and duties of ISG and Subsidiary shall become the debts, liabilities
and duties of the Surviving Corporation.
(b) the Articles of Incorporation and Bylaws of Subsidiary, as
in effect immediately prior to the Effective Date, shall remain the Articles of
Incorporation and Bylaws of the Surviving Corporation thereafter, unless and
until amended in accordance with their terms and as provided by law; and
(c) the directors and officers of Subsidiary on the Effective
Date shall be the directors and officers of the Surviving Corporation, each to
hold a directorship or office in accordance with the Articles of Incorporation
and Bylaws of Subsidiary, until his or her respective successor is duly elected
and qualified.
3.4 Tax and Accounting Treatment. The parties hereto acknowledge and
agree that while they desire that the Merger contemplated hereby be treated for
accounting purposes as a tax-free reorganization under Section 368 of the Code,
each party shall be solely responsible for the tax and accounting consequences
of the Merger to such party.
Agreement and Plan of Merger
April 3, 2000
Page -5-
3.5 Procedure at the Closing. At the Closing, the parties agree that
the following shall occur:
(a) ISG and the Principal Shareholders shall have satisfied
each of the conditions set forth in Article VIII and shall deliver to
HomeSeekers the documents, certificates, opinions, consents and letters required
by Article VIII.
(b) HomeSeekers shall have satisfied each of the conditions
set forth in Article IX and shall deliver to ISG the documents, certificates,
consents and letters required by Article IX.
(c) HomeSeekers shall direct its transfer agent to issue the
shares of HomeSeekers Common Stock issuable pursuant to Section 2.1, in the name
of the ISG Shareholders receiving such stock, and shall deliver stock
certificates relating thereto (without fractional shares) promptly following
surrender of the existing ISG stock certificates by the ISG Shareholders. The
shares of HomeSeekers Common Stock issuable pursuant to Section 2.1, are
referred to herein as the "HomeSeekers Shares."
(d) From and after the Effective Date, the stock transfer
books of ISG shall be closed and no transfer of shares of ISG Common Stock shall
thereafter be made. If, after the Effective Date, ISG Certificates are presented
to HomeSeekers, they shall be canceled and exchanged in accordance with Section
2.1 of this Agreement.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
OF HOMESEEKERS AND SUBSIDIARY
As a material inducement to ISG and the Principal Shareholders to enter
into this Agreement and to consummate the transactions contemplated hereby,
HomeSeekers and Subsidiary, jointly and severally, make the following
representations and warranties to ISG and the Shareholders:
4.1 Corporate Status. HomeSeekers and Subsidiary are corporations duly
organized, validly existing and in good standing under the laws of the State of
Nevada.
4.2 Corporate Power and Authority. HomeSeekers and Subsidiary have the
corporate power and authority to execute and deliver this Agreement and the
agreements attached as exhibits hereto to which HomeSeekers and Subsidiary are
parties (the "HomeSeekers Ancillary Agreements"), to perform their obligations
hereunder and to consummate the transactions contemplated hereby. HomeSeekers
and Subsidiary have taken all action necessary
Agreement and Plan of Merger
April 3, 2000
Page -6-
to authorize the execution and delivery of this Agreement, the performance of
their obligations hereunder and the consummation of the transactions
contemplated hereby.
4.3 Enforceability. This Agreement has been duly executed and delivered
by HomeSeekers and constitutes a legal, valid and binding obligation of
HomeSeekers, enforceable against HomeSeekers in accordance with its terms,
except as the same may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and general equitable principles regardless of
whether such enforceability is considered in a proceeding at law or in equity.
4.4 No Commissions. HomeSeekers has not incurred any obligation for any
finder's or broker's or agent's fees or commissions or similar compensation in
connection with the transactions contemplated hereby, other than such
compensation as may be due and payable to their officers, employees or
contracted consultants.
4.5 HomeSeekers Common Stock. Upon consummation of the transactions
contemplated hereby and the issuance and delivery of certificates representing
HomeSeekers Shares as provided in this Agreement, HomeSeekers Shares will be
validly issued, fully paid and non-assessable.
4.6 Capitalization. As of the date hereof, the authorized capital stock
of HomeSeekers consists of Fifty Million (50,000,000) shares of HomeSeekers
Common Stock. As of March 31, 2000, Eighteen Million One Hundred Twenty-One
Thousand Fifty-Eight (18,121,058) shares of HomeSeekers Common Stock were
validly issued and outstanding. The authorized capital stock of Subsidiary
consists of one thousand (1,000) shares of common stock, no par value per share,
of which one thousand (1,000) shares are validly issued and outstanding and held
of record and beneficially by HomeSeekers.
4.7 Governmental Approvals and Filings. No approval, authorization,
consent, license, clearance or order of, declaration or notification to, or
filing, registration or compliance with, any governmental or regulatory
authority ("Governmental Entity") is required on the part of HomeSeekers in
order (a) to permit HomeSeekers to perform its obligations under this Agreement
or (b) to prevent the termination of any right, privilege, license or agreement
of HomeSeekers or to prevent any loss to HomeSeekers' business, by reason of the
transactions contemplated by this Agreement, except for the filing of Articles
of Merger with the Nevada Secretary of State.
4.8 No Conflict. Neither the execution, delivery and performance of
this Agreement, or the HomeSeekers Ancillary Agreements by HomeSeekers nor the
consummation by HomeSeekers of the transactions contemplated hereby and thereby,
will (a) conflict with, or result in a breach of, any of the terms, conditions
or provisions of HomeSeekers' Articles of Incorporation or Bylaws (or other
organizational or charter documents), (b) conflict with, result in a breach or
violation of, give rise to a termination right or a default under, result in the
Agreement and Plan of Merger
April 3, 2000
Page -7-
acceleration of performance under (whether or not after the giving of notice or
lapse of time or both), any mortgage, lien, lease, agreement, note, bond,
indenture, guarantee or instrument or any license or franchise granted by or to
a third party, in each case, that is material to HomeSeekers' business, (c)
conflict with, or result in a violation of, any statute, regulation, law,
ordinance, writ, injunction, order, judgment or decree to which HomeSeekers or
any of its assets may be subject, (d) give rise to a declaration or imposition
of any lien, charge, security interest or encumbrance of any nature whatsoever
upon any of the assets of HomeSeekers, (e) adversely affect any franchise,
license, permit or other governmental approval which is material to HomeSeekers'
business or is necessary to enable HomeSeekers to carry on its business as
presently conducted or is required of any employee or agent of HomeSeekers to
enable such person to carry out such person's duties on behalf of HomeSeekers,
or (f) require the consent of any third party.
4.9 Form 10-QSB. The unaudited financial statements accompanying
HomeSeekers' Form 10-QSB for the six month period ending December 31, 1999 have
been prepared in accordance with generally accepted accounting principles for
interim financial information and the instructions to Form 10-QSB. Accordingly,
they do not include all of the information and footnotes required by generally
accepted accounting principles for complete financial statements. All
adjustments that, in the opinion of management, are necessary for a fair
presentation of the results of operations for the interim periods have been made
and are of a recurring nature unless otherwise disclosed therein. The results of
operations for the quarter and six months ended December 31, 1999 are not
necessarily indicative of the results that will be realized for a full year.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
OF ISG AND PRINCIPAL SHAREHOLDERS
As of the date hereof, except as disclosed in a document referring
specifically to the relevant subsections of this Article V which is delivered by
ISG to HomeSeekers prior to execution of this Agreement (the "ISG Disclosure
Schedule"), ISG and the Principal Shareholders hereby jointly and severally
represent and warrant to HomeSeekers and Subsidiary as follows:
5.1 Corporate Organization. ISG is a corporation duly organized,
validly existing and in good standing under the laws of its state of
incorporation and has all requisite corporate power and authority and all
necessary governmental authorizations to own, lease and operate its properties
and to conduct its business as it is now being conducted. ISG is duly qualified
or licensed to do business and is in good standing as a foreign corporation in
each state or other jurisdiction in which the nature of its business or
operations or ownership of its property requires such qualification or
licensing, except where the failure to be so qualified or licensed would not,
individually or in the aggregate, materially and adversely affect the condition
(financial or other),
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April 3, 2000
Page -8-
business, properties, prospects (as currently contemplated), net worth or
results of operations of ISG taken as a whole (collectively, "ISG's Business").
The minute book of ISG, as made available to HomeSeekers, contain complete and
accurate records of all corporate action taken by ISG since its date of
incorporation. ISG has no direct or indirect interest in or loans to any
partnership, corporation, joint venture, business association or other entity
which in the aggregate exceed $10,000. ISG has delivered to HomeSeekers complete
and correct copies of the Articles of Incorporation and Bylaws (and other
organizational or charter documents) of ISG, as amended to the date hereof. ISG
has never had any "Subsidiary," as that term is defined in Rule 1.01 in
Regulation S-X promulgated under the Securities Act of 1933, as amended (the
"Securities Act").
5.2 Capital Structure. The authorized capital stock of ISG consists of
one million five hundred (1,500,000) shares of Common Stock, par value $.01 per
share ("ISG Common Stock"). Each shareholder is the owner of the number of
shares of ISG Common Stock set forth opposite his or her name in the preamble.
Upon execution of this Agreement on the date hereof by ISG, there were
outstanding Nine Hundred Six Thousand One Hundred Thirty-Seven (906,137) shares
of ISG Common Stock. ISG has provided HomeSeekers and its legal counsel with a
complete and accurate list of (a) all issuances of Capital Stock by ISG, (b) the
names and addresses of all holders of ISG Capital Stock, together with the
number and type of shares held by each holder. ISG is not under any obligation
to register under the Securities Act any of its presently outstanding securities
or any securities that may subsequently be issued. There are no agreements or
understandings to which ISG is a party, or any other agreements or
understandings, with respect to the transfer or voting of shares of the ISG
Capital Stock. As of the date of this Agreement, there are no outstanding
options or warrants to purchase any ISG Common Stock. Since December 31, 1999,
no dividends, loans, or other distributions to any of the ISG Shareholders have
been declared or executed.
5.3 No Other Agreements to Sell Assets, Merge, Etc. ISG has no legal
obligation, absolute or contingent, to any person or firm to sell assets other
than in the ordinary course of business or to effect any merger, consolidation
or reorganization of ISG or to enter into any agreement with respect thereto.
5.4 Authorization; Execution and Delivery. ISG has all requisite
corporate power and authority (a) to execute and deliver this Agreement, and the
agreements attached as exhibits hereto to which ISG is a party (the "ISG
Ancillary Agreements"), (b) subject to the approval of this Agreement by the
holders of a majority of the outstanding shares of ISG Common Stock, to perform
its obligations under this Agreement, and the ISG Ancillary Agreements, and (c)
to consummate the transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement, and ISG Ancillary Agreements by ISG
and the consummation by ISG of the transactions contemplated hereby and thereby
have been duly approved and authorized by all requisite corporate action of ISG,
and its shareholders. This Agreement has been duly executed and delivered by ISG
and the Principal Shareholders, and constitutes the
Agreement and Plan of Merger
April 3, 2000
Page -9-
legal, valid and binding obligation of ISG and the Principal Shareholders,
enforceable in accordance with its terms, except as the same may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally and general equitable
principles regardless of whether such enforceability is considered in a
proceeding at law or in equity. The Board of Directors of ISG has unanimously
determined that it is advisable and in the best interest of the ISG Shareholders
for ISG to enter into a strategic business combination with HomeSeekers and
Subsidiary upon the terms and subject to the conditions of this Agreement.
5.5 Governmental Approvals and Filings. No approval, authorization,
consent, license, clearance or order of, declaration or notification to, or
filing, registration or compliance with, any governmental or regulatory
authority ("Governmental Entity") is required on the part of ISG in order (a) to
permit ISG to perform its obligations under this Agreement or (b) to prevent the
termination of any right, privilege, license or agreement of ISG or to prevent
any loss to ISG's Business, by reason of the transactions contemplated by this
Agreement, except for the filing of Articles of Merger with the Colorado
Secretary of State.
5.6 No Conflict. Neither the execution, delivery and performance of
this Agreement, or the ISG Ancillary Agreements by ISG nor the consummation by
ISG of the transactions contemplated hereby and thereby, will (a) conflict with,
or result in a breach of, any of the terms, conditions or provisions of ISG's
Articles of Incorporation or Bylaws (or other organizational or charter
documents), (b) conflict with, result in a breach or violation of, give rise to
a termination right or a default under, result in the acceleration of
performance under (whether or not after the giving of notice or lapse of time or
both), any mortgage, lien, lease, agreement, note, bond, indenture, guarantee or
instrument or any license or franchise granted by or to a third party, in each
case, that is material to ISG's Business, (c) conflict with, or result in a
violation of, any statute, regulation, law, ordinance, writ, injunction, order,
judgment or decree to which ISG or any of its assets may be subject, (d) give
rise to a declaration or imposition of any lien, charge, security interest or
encumbrance of any nature whatsoever upon any of the assets of ISG, (e)
adversely affect any franchise, license, permit or other governmental approval
which is material to ISG's Business or is necessary to enable ISG to carry on
its business as presently conducted or is required of any employee or agent of
ISG to enable such person to carry out such person's duties on behalf of ISG, or
(f) require the consent of any third party.
5.7 Financial Statements; Absence of Undisclosed Liabilities.
(a) ISG has furnished HomeSeekers with ISG's balance sheets as
of December 31, 1997, 1998, and 1999, and the related statements of operations,
cash flows and changes in shareholders' equity for each of the years in the
three-year period ended December 31, 1999, together with the notes thereto and
the related reports of its independent public accountants, and the unaudited
balance sheet and related statements of operations, cash flows and changes in
shareholders' equity for the period ended February 29, 2000 (collectively, the
"ISG Financial Statements"). The ISG Financial Statements, including the notes
thereto, (i) are in
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April 3, 2000
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accordance with the respective books of ISG; (ii) have been prepared in
accordance with generally accepted accounting principles consistently applied
throughout the periods involved; (iii) present fairly the financial position of
ISG as of the respective dates thereof and the results of operations and cash
flows of ISG for the respective periods indicated therein; and (iv) do not
reflect any material items of nonrecurring income except as stated therein.
During the three-year period ended December 31, 1999, there has been no change
in ISG's accounting principles, methods or policies, except as described in the
notes to ISG Financial Statements.
(b) ISG has no liabilities of any nature, whether accrued,
absolute, contingent or otherwise, and whether due or to become due, which were
not disclosed or provided for in ISG Financial Statements or the notes thereto
other than obligations not required to be disclosed or provided for under
generally accepted accounting principles and liabilities incurred since March
31. 2000, which are not individually or in the aggregate, material to ISG's
Business. All reserves set forth on ISG Financial Statements or the notes
thereto were adequate. There are no loss contingencies (as such term is used in
Statement of Financial Accounting Standards No. 5) which were not adequately
provided for in ISG Financial Statements or reflected in the notes thereto.
(c) The accounts receivable of ISG shown on the ISG Financial
Statements at February 29, 2000 are collectible in the ordinary and usual course
of business, and are not subject to any material defense or right of set-off
that may be asserted or any material claim of set-off that may be made, other
than as reflected in the allowance for doubtful accounts shown on the balance
sheet contained in the ISG Financial Statements at February 29, 2000. The
reserve for doubtful accounts is adequate, and the values at which accounts
receivable are carried on such February 29, 2000 balance sheet reflect the
policies of ISG consistent with ISG's past practice and are in accordance with
generally accepted accounting principles applied on a consistent basis.
(d) ISG makes and keeps accurate books and records reflecting
in all material respects its assets and maintains internal accounting controls
which provide reasonable assurance that (i) transactions are executed in
accordance with management's authorization, (ii) transactions are recorded to
permit preparation of ISG's financial statements and to maintain accountability
in all material respects for the assets of ISG, (iii) access to the assets of
ISG is permitted only in accordance with management's authorization, and (iv)
the recorded accountability of the assets of ISG is compared with existing
assets at reasonable intervals.
5.8 Absence of Changes. Since February 29, 2000 (a) there has been no
material adverse change in ISG's Business or any development known to ISG that
is reasonably expected to cause a material adverse change in ISG's Business; (b)
there has been no damage, destruction or loss (whether or not covered by
insurance) materially and adversely affecting any assets material to ISG's
Business; (c) there has been no change by ISG in accounting principles or
methods except insofar as may be required by a change in generally accepted
accounting principles; (d) there has been no revaluation by ISG of any of its
assets, including, without limitation, writing down the value of inventory or
writing off notes or accounts receivable;
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April 3, 2000
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(e) ISG has conducted its business only in the ordinary course consistent with
past practice; and (f) no event described in Section 6.2 or Section 6.3 hereof
has occurred.
5.9 Contracts and Commitments.
(a) Except as set forth in the ISG Disclosure Schedule, ISG is
not a party or subject to:
(i) Any employment contract or arrangement, written or oral, providing
for future compensation with any officer, consultant, director or employee which
is not terminable by it on thirty (30) days' notice or less without penalty or
obligation to make payments related to such termination, other than (A) (in the
case of employees other than executive officers) such severance agreements as
are not different from standard arrangements offered to employees generally in
the ordinary course of business consistent with ISG's past practices, a
description of which is set forth in the ISG Disclosure Schedule and (B) such
agreements as may be imposed or implied by law;
(ii) Any plans, contracts or arrangements, written or oral, which
collectively require aggregate payments by ISG in excess of $10,000 for bonuses,
pensions, deferred compensation, severance pay or benefits, retirement payments,
profit-sharing, or the like;
(iii) Any joint marketing, joint development or joint venture contract
or arrangement or any other agreement which has involved or is expected to
involve a sharing of profits with other persons;
(iv) Any existing OEM agreement, distribution agreement, volume
purchase agreement, or other similar agreement in which the annual amount
involved in 1999 exceeded, or is expected to exceed in 2000 or any subsequent
year, $10,000 or pursuant to which ISG has granted or received most favored
customer provisions or exclusive marketing rights related to any product, group
of products or territory;
(v) Any lease for real or personal property pursuant to which the
amount of payments which ISG is required to make on an annual basis exceeds
$10,000;
(vi) Any agreement, contract, mortgage, indenture, lease, instrument,
license, franchise, permit, concession, arrangement, commitment or authorization
which may be, by its terms, terminated or breached by reason of the execution of
this Agreement, the Merger Agreement or any ISG Ancillary Agreement, the closing
of the Merger, or the consummation of the transactions contemplated hereby or
thereby;
(vii) Except for trade indebtedness incurred in the ordinary course of
business, any instrument evidencing or related in any way to indebtedness in
excess of $10,000 incurred in the acquisition of companies or other entities or
indebtedness in excess of $10,000 for borrowed
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April 3, 2000
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money by way of direct loan, sale of debt securities, purchase money obligation,
conditional sale, guarantee, indemnification or otherwise;
(viii) Any license agreement, either as licensor or licensee, except
licenses granted to customers in the ordinary course of business;
(ix) Any contract containing covenants purporting to limit ISG's
freedom to compete in any line of business or in any geographic area or with any
third party;
(x) Any agreement, contract or commitment relating to capital
expenditures and involving future obligations in excess of $10,000; or
(xi) Any other agreement, contract or commitment which is material to
ISG's Business.
(b) Each agreement, contract, mortgage, indenture, plan,
lease, instrument, permit, concession, franchise, arrangement, license and
commitment is listed in the ISG Disclosure Schedule, and is valid and binding on
ISG, and is in full force and effect, and neither ISG nor any other party
thereto, has breached any material provision of, or is in default under the
terms of, any such agreement, contract, mortgage, indenture, plan, lease,
instrument, permit, concession, franchise, arrangement, license or commitment.
(c) None of the 20 largest customers of ISG during the twelve
month period ended February 29, 2000 (determined on the basis of both revenues
and bookings during such period) has reduced or terminated, or has notified ISG
in writing that it intends to reduce or terminate, the amount of its business
with ISG.
(d) There is no agreement, judgment, injunction, order or
decree binding upon ISG which has or could reasonably be expected to have the
effect of prohibiting or impairing any material current business practice of
ISG, any acquisition of material property by ISG or the conduct of business by
ISG as currently conducted or as proposed to be conducted by ISG.
5.10 Legal Proceedings. ISG is not in violation of, and has not
received any notice of any violation of (a) any applicable statute, law,
regulation, ordinance, writ, injunction, order, judgment or decree, the effect
of which violation could, individually or in the aggregate, be materially
adverse to ISG's Business, or (b) any provision of the Articles of Incorporation
or Bylaws (or other organizational or charter document) of ISG. There is no
order, writ, injunction, judgment or decree outstanding, and no legal,
administrative, arbitration or other proceeding, action, suit or governmental
investigation or inquiry against or relating to ISG or its assets or business
("ISG Legal Proceedings") pending or threatened and there are no claims
(including unasserted claims as to which there has been a manifestation by a
potential claimant of an awareness of such claim or it is considered probable
that a claim will be asserted and there is a
Agreement and Plan of Merger
April 3, 2000
Page -13-
reasonable possibility that the outcome will be unfavorable, all as such terms
are used in Statement of Financial Accounting Standards No. 5), against or
relating to ISG or its assets or business, which pending or threatened ISG Legal
Proceedings or claims would reasonably be expected to have, individually or in
the aggregate, a material adverse effect on ISG's Business. There is no ISG
Legal Proceeding which in any manner challenges or seeks to prevent, enjoin,
alter or delay any of the transactions contemplated hereby. There are no
existing liabilities that require ISG to indemnify its officers and directors
for acts or omissions by such persons or existing agreements to provide
indemnification for such liabilities. The ISG Disclosure Schedule sets forth
with respect to each ISG Legal Proceeding, to the extent that the aggregate
remedies or damages claimed for each such complaint are unspecified, involve
specific performance or injunctive relief or exceed $10,000, the forum, the
parties thereto, a brief description of the subject matter thereof and the
amount of damages claimed.
5.11 ERISA Matters.
(a) The ISG Disclosure Schedule lists, with respect to ISG,
and any trade or business (whether or not incorporated) which is treated as a
single employer with ISG (an "ERISA Affiliate") within the meaning of Section
414(b), (c), (m) or (o) of the Code, (i) all material employee benefit plans (as
defined in Section 3(3) of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA")), (ii) each loan to a non-officer employee in excess of
$5,000, loans to officers and directors and any stock option, stock purchase,
phantom stock, stock appreciation right, supplemental retirement, severance,
sabbatical, medical, dental, vision care, disability, employee relocation,
cafeteria benefit (Code Section 125) or dependent care (Code Section 129), life
insurance or accident insurance plans, programs or arrangements, (iii) all
bonus, pension, profit sharing, savings, deferred compensation or incentive
plans, programs or arrangements, (iv) other fringe or employee benefit plans,
programs or arrangements that apply to senior management of ISG and that do not
generally apply to all employees, and (v) any current or former employment or
executive compensation or severance agreements, written or otherwise, as to
which unsatisfied obligations of ISG of greater than $5,000 remain for the
benefit of, or relating to, any present or former employee, consultant or
director of ISG (together, the "ISG Employee Plans").
(b) ISG has furnished to HomeSeekers a copy of each of the ISG
Employee Plans and related plan documents (including trust documents, insurance
policies or contracts, employee booklets, summary plan descriptions and other
authorizing documents, and, to the extent still in its possession, any material
employee communications relating thereto) and has, with respect to each ISG
Employee Plan which is subject to ERISA reporting requirements, provided copies
of the Form 5500 reports filed for the last three plan years. Any ISG Employee
Plan intended to be qualified under Section 401(a) of the Code has either
obtained from the Internal Revenue Service a favorable determination letter as
to its qualified status under the Code, including all amendments to the Code
effected by the Tax Reform Act of 1986 and subsequent legislation, or has
applied to the Internal Revenue Service for such a determination
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April 3, 2000
Page -14-
letter prior to the expiration of the requisite period under applicable Treasury
Regulations or Internal Revenue Service pronouncements in which to apply for
such determination letter and to make any amendments necessary to obtain a
favorable determination. ISG has also furnished HomeSeekers with the most recent
Internal Revenue Service determination letter issued with respect to each such
ISG Employee Plan, and nothing has occurred since the issuance of each such
letter which could reasonably be expected to cause the loss of the tax-qualified
status of any ISG Employee Plan subject to Code Section 401(a).
(c) (i) None of the ISG Employee Plans promises or provides
retiree medical or other retiree welfare benefits to any person; (ii) there has
been no "prohibited transaction," as such term is defined in Section 406 of
ERISA and Section 4975 of the Code, with respect to any ISG Employee Plan, which
could reasonably be expected to have, in the aggregate, a Material adverse
effect; (iii) each ISG Employee Plan has been administered in accordance with
its terms and in compliance with the requirements prescribed by any and all
statutes, rules and regulations (including ERISA and the Code), except as would
not have, in the aggregate, a Material adverse effect, and ISG and each ERISA
Affiliate have performed all obligations required to be performed by them under,
are not in any material respect in default, under or violation of, and have no
knowledge of any material default or violation by any other party to, any of the
ISG Employee Plans; (iv) ISG is not subject to any liability or penalty under
Sections 4976 through 4980 of the Code or Title I of ERISA with respect to any
of the ISG Employee Plans; (v) all material contributions required to be made by
ISG or any ERISA Affiliate to any ISG Employee Plan have been made on or before
their due dates and a reasonable amount has been accrued for contributions to
each ISG Employee Plan for the current plan years; (vi) with respect to each ISG
Employee Plan, no "reportable event" within the meaning of Section 4043 of ERISA
(excluding any such event for which the thirty (30) day notice requirement has
been waived under the regulations to Section 4043 of ERISA) nor any event
described in Section 4062, 4063 or 4041 or ERISA has occurred; and (vii) no ISG
Employee Plan is covered by, and neither ISG nor any ERISA Affiliate has
incurred or expects to incur any liability under Title IV of ERISA or Section
412 of the Code. With respect to each ISG Employee Plan subject to ERISA as
either an employee pension plan within the meaning of Section 3(2) of ERISA or
an employee welfare benefit plan within the meaning of Section 3(1) of ERISA,
ISG has prepared in good faith and timely filed all requisite governmental
reports (which were true and correct as of the date filed) and has properly and
timely filed and distributed or posted all notices and reports to employees
required to be filed, distributed or posted with respect to each such ISG
Employee Plan. No suit, administrative proceeding, action or other litigation
has been brought, or is threatened, against or with respect to any such ISG
Employee Plan, including any audit or inquiry by the IRS or United States
Department of Labor. Neither ISG nor any ERISA Affiliate is a party to, or has
made any contribution to or otherwise incurred any obligation under, any "multi
employer plan" as defined in Section 3(37) of ERISA.
(d) With respect to each ISG Employee Plan, ISG has complied
with (i) the applicable health care continuation and notice provisions of the
Consolidated Omnibus Budget
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April 3, 2000
Page -15-
Reconciliation Act of 1985 ("COBRA") and the proposed regulations thereunder and
(ii) the applicable requirements of the Family Leave Act of 1993 and the
regulations thereunder, except to the extent that such failure to comply would
not, in the aggregate, have a Material adverse effect.
(e) The consummation of the transactions contemplated by this
Agreement will not (i) entitle any current or former employee or other service
provider of ISG or any ERISA Affiliate to severance benefits or any other
payment (including, without limitation, unemployment compensation, golden
parachute or bonus), except as expressly provided in this Agreement, or (ii)
accelerate the time of payment or vesting of any such benefits, or increase the
amount of compensation due any such employee or service provider.
(f) There has been no amendment to, written interpretation or
announcement (whether or not written) by ISG or any ERISA Affiliate relating to,
or change in participation or coverage under, any ISG Employee Plan which would
materially increase the expense of maintaining such Plan above the level of
expense incurred with respect to that Plan for the most recent fiscal year
included in ISG's financial statements.
5.12 Taxes.
(a) For purposes of this 5.12 and other provisions of this
Agreement relating to Taxes, the following definitions shall apply:
(i) The term "Taxes" shall mean all taxes, however
denominated, including any interest, penalties or other additions to tax that
may become payable in respect thereof, (A) imposed by any federal, territorial,
state, local or foreign government or any agency or political subdivision of any
such government, which taxes shall include, without limiting the generality of
the foregoing, all income or profits taxes (including but not limited to,
federal income taxes and state income taxes), payroll and employee withholding
taxes, unemployment insurance, social security taxes, sales and use taxes, ad
valorem taxes, excise taxes, franchise taxes, gross receipts taxes, business
license taxes, occupation taxes, real and personal property taxes, stamp taxes,
environmental taxes, transfer taxes, workers' compensation, Pension Benefit
Guaranty Corporation premiums and other governmental charges, and other
obligations of the same or of a similar nature to any of the foregoing, which
are required to be paid, withheld or collected, (B) any liability for the
payment of amounts referred to in (A) as a result of being a member of any
affiliated, consolidated, combined or unitary group, or (c) any liability for
amounts referred to in (A) or (B) as a result of any obligation to indemnify
another person.
(ii) The term "Returns" shall mean all reports,
estimates, declarations of estimated tax, information statements and returns
relating to, or required to be filed in connection with, any Taxes, including
information returns or reports with respect to backup withholding and other
payments to third parties.
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April 3, 2000
Page -16-
(iii) The term "Code" shall mean the Internal Revenue
Code of 1986, as amended.
(b) All Returns required to be filed by or on behalf of ISG
have been duly filed on a timely basis and such Returns are true, complete and
correct. All Taxes shown to be payable on such Returns or on subsequent
assessments with respect thereto, and all payments of estimated Taxes required
to be made by or on behalf of ISG under Section 6655 of the Code or comparable
provisions of state, local or foreign law, have been paid in full on a timely
basis or have been accrued on the Financial Statements, and no other Taxes are
payable by ISG with respect to items or periods covered by such Returns (whether
or not shown on or reportable on such Returns) or with respect to any period
prior to the date of this Agreement. ISG has withheld and paid over all Taxes
required to have been withheld and paid over, and complied with all information
reporting and backup withholding requirements, including maintenance of required
records with respect thereto, in connection with amounts paid or owing to any
employee, creditor, independent contractor, or other third party. There are no
liens on any of the assets of ISG with respect to Taxes, other than liens for
Taxes not yet due and payable. ISG has not at any time been a member of any
partnership or joint venture for a period for which the statue of limitations
for any Tax potentially applicable as a result of such membership has not
expired. The amount of ISG's liability for unpaid Taxes (whether actual or
contingent) for all periods through the date of the Financial Statements does
not, in the aggregate, exceed the amount of the current liability accruals for
Taxes reflected on the Financial Statements, and the Financial Statements
properly accrue in accordance with GAAP all liabilities for Taxes payable after
the date of the Financial Statements attributable to transactions and events
occurring prior to such date. No liability for Taxes of ISG has been incurred
(or prior to Closing will be incurred) since the date of the Financial
Statements other than in the ordinary course of business.
(c) ISG has made available to HomeSeekers true and complete
copies of (i) relevant portions of income tax audit reports, statements of
deficiencies, closing or other agreements received by or on behalf of ISG
relating to Taxes, and (ii) all federal and state income or franchise tax
Returns and state sales and use tax Returns for or including ISG that have been
filed for all periods ending on and after February 29, 2000. The ISG Disclosure
Schedule sets forth a list of all of the Returns referred to in clause (ii). ISG
does not do business in or derive income from any state other than states for
which Returns have been duly filed and made available to Purchaser.
(d) The Returns of ISG have never been audited by a government
or taxing authority, nor is any such audit in process, threatened or pending
(either in writing or verbally, formally or informally). No deficiencies exist
or have been asserted (either in writing or verbally, formally or informally) or
are expected to be asserted with respect to Taxes of ISG, and ISG has not
received notice (either in writing or verbally, formally or informally) nor does
it expect to receive notice that it has not filed a Return or paid Taxes
required to be filed or paid.
Agreement and Plan of Merger
April 3, 2000
Page -17-
ISG is not a party to any action or proceeding for assessment or collection of
Taxes, nor has such event been asserted or threatened (either in writing or
verbally, formally or informally) against ISG, or any of its assets. No waiver
or extension of any statute of limitations is in effect with respect to Taxes or
Returns of ISG. ISG has disclosed on its federal and state income and franchise
tax returns all positions taken therein that could give rise to a substantial
understatement penalty within the meaning of Code Section 6662 or comparable
provisions of applicable state tax laws.
(e) ISG is not (and has never been) a party to any tax sharing
agreement.
(f) ISG is not a "consenting corporation" under Section 341(f)
of the Code. ISG has not entered into any compensatory agreements with respect
to the performance of services which payment thereunder would result in a
nondeductible expense to ISG pursuant to Section 280G of the Code or an excise
tax to the recipient of such payment pursuant to Section 4999 of the Code. ISG
has not agreed to, nor is it required to make, any adjustment under Code Section
481(a) by reason of, a change in accounting method, and ISG will not otherwise
have any income reportable for a period ending after the Closing Date
attributable to a transaction or other event (e.g., an installment sale)
occurring prior to the Closing Date. ISG is in compliance with the terms and
conditions of any applicable tax exemptions, agreements or orders of any foreign
government to which it may be subject or which it may have claimed, and the
transactions contemplated by this Agreement will not have any adverse effect on
such compliance.
5.13 Intellectual Property. ISG has full legal right, title and
interest in and to all trademarks, service marks, trade names, copyrights,
know-how, patents, trade secrets, licenses (including licenses for the use of
computer software programs), and other intellectual property used in the conduct
of its business as of the date hereof, including, without limitation, ISG's
Formulator electronic forms software product, ISG's Client Manager product, the
domain names "XXXXXXXXXX.XXX," XXXXXXXXXX.XXX," "XXXXXXXXXX.XXX,"
"XXXXXXXXXX.XXX," and "XXXXXXXXXXXXXXXX.XXX," the names "Information Solutions
Group" and "Formulator, and the right to use under licenses the real estate
forms marketed and distributed by ISG (the "Intellectual Property"). The conduct
of the business of ISG as presently conducted and present use and exploitation
of the Intellectual Property, without regard to location within the United
States, does not infringe or misappropriate any rights held or asserted by any
Person and, to the knowledge of the Principal Shareholders, no Person is
infringing on any Intellectual Property. No payments are required for the
continued use of the Intellectual Property. None of the Intellectual Property
has ever been declared invalid or unenforceable, or is the subject of any
pending or threatened action for opposition, cancellation, declaration,
infringement, or invalidity, unenforceability or misappropriation or the like
claim, action or proceeding. The Principal Shareholders covenant that they will
provide HomeSeekers all pertinent information within their control and otherwise
assist HomeSeekers in preparing and
Agreement and Plan of Merger
April 3, 2000
Page -18-
filing all trademark, copyright, and other intellectual property registration
applications necessary to protect the Surviving Corporation's ownership interest
in the Intellectual Property.
5.14 Environmental Matters.
The operations of ISG comply in all material respects with all
federal, state and local environmental, health and safety laws, statutes and
regulations. The operations of ISG are not the subject of any judicial or
administrative proceeding alleging the violation of any federal, state or local
environment, health or safety law, statute or regulation. The operations of ISG
are not the subject of any federal or state investigation pursuant to which ISG
has been ordered to respond to a release of any hazardous or toxic waste,
substance or constituent or other substance, into the environment in violation
of law. ISG has not filed any notice under federal or state law indicating past
or present treatment, storage or disposal requiring a Part B permit or
designation of "interim status" as defined under 40 C.F.R. Parts 260-270 or any
state equivalent of a hazardous or toxic waste as defined therein or reporting a
spill or release of a hazardous or toxic waste, substance or constituent or
other substance, into the environment except in accordance with applicable law.
ISG has not released, as defined in the Comprehensive Environmental Response
Compensation and Liability Act (42 U.S.C. ss.9601 et seq.), any hazardous
substance as defined therein into the environment. None of the operations of ISG
involve the generation, transportation, treatment or disposal as defined under
40 C.F.R. Parts 260-270 or any state equivalent of hazardous waste as defined
therein requiring a Part B permit or designation of "interim status." No
underground storage tanks or surface impoundments are on the premises of ISG. No
lien in favor of any Governmental Entity for (i) any liability under federal or
state environmental laws or regulations, or (ii) damages arising from or costs
incurred by such Governmental Entity in response to a release of a hazardous or
toxic waste, substance or constituent or other substance, into the environment
has been filed or attached to the premises currently owned by ISG. All material
permits necessary for the continued conduct of the business of ISG or the
transportation, transfer, recycling, storage, use, treatment, manufacture,
investigation or removal of any hazardous or toxic waste, substance or
constituent or other substance have been obtained by ISG. All such permits are
valid and in full force and effect and will survive the Closing without
modification. ISG has complied in all material respects with all covenants and
conditions of any permits and no circumstances exist which could cause any
permit to be revoked, modified or rendered non-renewable upon the payment of the
permit fee or which could impose upon HomeSeekers or the Surviving Corporation
the obligation to obtain any additional permits. ISG has not exposed any persons
in a material manner to, nor received notice of any claim of injury due to
exposure of any person to, hazardous materials manufactured, stored, used,
distributed, disposed of, released or controlled by ISG. No hazardous materials
are present on any property which has been owned, leased or occupied by ISG for
the conduct of its business in violation of any federal, state or local law and
which could result in a material financial liability to ISG. No claim,
complaint, or administrative proceeding has been brought or is currently pending
against ISG relating to any liability of ISG existing or threatened with respect
to hazardous or toxic waste, substances or constituents or other
Agreement and Plan of Merger
April 3, 2000
Page -19-
substances or as to the investigation or remediation of hazardous or toxic
waste, substances or constituents or other substances.
As used herein "federal, state and local environmental, health and
safety laws, statutes or regulations" means any and all laws, rules,
regulations, orders, treaties, statutes and codes promulgated by any local,
state, federal or international Governmental Entity or agency which has
jurisdiction over any portion of the current operations of ISG, which prohibits,
regulates or controls any hazardous material or the transportation, storage,
transfer, recycling, use, treatment, manufacture, investigation, removal,
remediation, release, exposure of others to, sale or distribution of hazardous
materials including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C.ss.9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C.ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss.6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C.ss.1251 et seq.), the Clean Air Act (42
U.S.C.ss.7401 et seq.), the Toxic Substances Control Act, as amended (15
U.S.C.ss.2601 et seq.), and the Occupational Safety and Health Act (29
U.S.C.ss.651 et seq.), as these laws have been amended or supplemented to date
and any analogous state or local statutes and the regulations promulgated to
date pursuant thereto.
As used herein, "hazardous or toxic waste, substance or constituent or
other substance" means those substances which are regulated by or form the basis
of liability under any federal, state and local environmental, health and safety
laws, statutes or regulations because they are radioactive, toxic, hazardous or
otherwise a danger to health, reproduction or the environment, including,
without limitation: (a) asbestos, (b) oil and petroleum products, (c)
explosives, (d) radioactive substances, pollutants or wastes, (e) urea
formaldehyde-containing building materials, (f) polychlorinated biphenyls, (g)
radon gas, and (h) ultra-hazardous or toxic substances, pollutants or wastes.
5.15 Certain Agreements. Neither the execution and delivery of this
Agreement and the ISG Ancillary Agreements, nor the consummation of the
transactions contemplated hereby or thereby will (a) result in any payment
(including, without limitation, severance, unemployment compensation, golden
parachute, bonus or otherwise) becoming due to any director or employee of ISG,
under any Plan or otherwise, (b) increase any benefits otherwise payable under
any Plan, or (c) result in the acceleration of the time of payment or vesting of
any such benefits.
5.16 Interests of Officers and Directors. No officer or director of ISG
or any "affiliate" or "associate" (as those terms are defined in Rule 405
promulgated under the Securities Act) of any such person has had, either
directly or indirectly, a material interest in: (a) any person or entity which
purchases from or sells, licenses or furnishes to ISG any goods, property,
technology or intellectual or other property rights or services; (b) any
contract or agreement to which ISG is a party or by which it may be bound or
affected; or (c) any property, real or personal, tangible or intangible, used in
or pertaining to ISG's Business, including any interest in the ISG Intellectual
Property Rights.
Agreement and Plan of Merger
April 3, 2000
Page -20-
5.17 Restrictions on Business Activities. There is no material
agreement, judgment, injunction, order or decree binding upon ISG which has or
could reasonably be expected to have the effect of prohibiting or materially
impairing any business practice of ISG, any acquisition of property by ISG or
the conduct of business by ISG as currently conducted or as currently proposed
to be conducted by ISG.
5.18 Title to Properties; Absence of Liens and Encumbrances; Condition
of Equipment. The ISG Disclosure Schedule lists all facilities occupied by ISG,
and indicates the nature of ISG's interest in such facilities. ISG has good and
valid title to, or, in the case of leased properties and assets, valid leasehold
interests in, all of their tangible properties and assets, real, personal and
mixed, used in their business, free and clear of any liens, charges, pledges,
security interests or other encumbrances. The equipment owned or leased by ISG
is, taken as a whole, (i) adequate for the conduct of the business of ISG
consistent with its past practice, (ii) suitable for the uses to which it is
currently employed, (iii) in good operating condition, (iv) regularly and
properly maintained, (v) not obsolete, dangerous or in need of renewal or
replacement, except for renewal or replacement in the ordinary course of
business, and (vi) free from any defects, except, with respect to clauses (ii)
through (vi) above, as would not have been a material adverse effect on ISG's
Business.
5.19 Regulatory Matters; Governmental Licenses; Compliance with Laws.
ISG has obtained all consents, approvals, registrations, certifications,
authorizations, permits and licenses of, and has made all filings with, or
notifications to, all Governmental Entities pursuant to applicable requirements
of all federal, state or local and foreign, laws, ordinances, governmental rules
or regulations applicable to ISG and its business, including but not limited to,
all such laws, ordinances, governmental rules or regulations relating to
registration of ISG's products (including proposed products) and certification
of its facilities. ISG is in compliance with all federal, state or local and
foreign, laws, ordinances, governmental rules or regulations applicable to its
business and has no reason to believe that any of its consents, approvals,
authorizations, registrations, certifications, permits, filings or notifications
that it has received or made to operate its business are invalid or have been or
are being suspended, canceled, revoked or questioned. There is no investigation
or inquiry to which ISG is a party or pending or threatened relating to the
operation of ISG's business and its compliance with applicable federal, state,
local or foreign laws, ordinances, governmental rules or regulations.
5.20 Labor Matters.
(a) ISG is in compliance in all material respects with all
currently applicable laws and regulations respecting employment, discrimination
in employment, terms and conditions of employment and wages and hours and
occupational safety and health and employment practices, and are not engaged in
any unfair labor practice. ISG has complied in all material aspects with all
applicable provisions of COBRA and has no material obligations with
Agreement and Plan of Merger
April 3, 2000
Page -21-
respect to any former employees or qualifying beneficiaries thereunder. ISG has
not received any notice from any Governmental Entity, and there has not been
asserted before any Governmental Entity, any claim, action or proceeding to
which ISG is a party or involving ISG, and there is neither pending nor
threatened any investigation or hearing concerning ISG arising out of or based
upon any such laws, regulations or practices. Except as is not material to ISG's
Business, ISG has not given to or received from, or anticipates giving to or
receiving from, any employee of ISG notice of termination of employment. The ISG
Disclosure Schedule sets forth the terms pursuant to which all amounts may be
payable (whether currently or in the future) to current or former officers,
directors, or employees of ISG as a result of or in connection with the Merger.
(b) ISG is not a party to any labor agreement with respect to
its employees with any labor organization, union, group or association and there
are no employee unions (nor any other similar labor or employee organizations)
under local statutes, custom or practice. ISG has not experienced any attempt by
organized labor or its representatives to make ISG conform to demands of
organized labor relating to its employees or to enter into a binding agreement
with organized labor that would cover the employees of ISG. There is no labor
strike or labor disturbance pending or threatened against ISG nor is any
grievance currently being asserted. ISG nor has not experienced a work stoppage
or other labor difficulty.
5.21 Questionable Payments. Neither ISG nor any director, officer,
agent or other employee of ISG, has: (a) made any payments or provided services
or other favors in the United States of America or in any foreign country in
order to obtain preferential treatment or consideration by any Governmental
Entity with respect to any aspect of the business of ISG; or (b) made any
political contributions which would not be lawful under the laws of the United
States or the foreign country in which such payments were made. Neither ISG nor
any director, officer, agent or other employee of ISG has been the subject of
any inquiry or investigation by any Governmental Entity in connection with
payments or benefits or other favors to or for the benefit of any governmental
or armed services official, agent, representative or employee with respect to
any aspect of the business of ISG or with respect to any political contribution.
5.22 Insurance. The ISG Disclosure Schedule contains a complete and
accurate list of all policies or binders of fire, liability, title, worker's
compensation, product liability and other forms of insurance maintained by ISG.
ISG is not in default under any of such policies or binders, and ISG has not
failed to give any notice or to present any claim under any such policy or
binder in a due and timely fashion. There are no facts known to ISG upon which
an insurer might be justified in reducing coverage or increasing premiums on
existing policies or binders. There are no outstanding unpaid claims under any
such policies or binders. All policies and binders provide sufficient coverage
for the risks insured against, are in full force and effect on the date hereof
and shall be kept in full force and effect through the Effective Date.
Agreement and Plan of Merger
April 3, 2000
Page -22-
5.23 Brokers. No broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement, except Clareity Consulting of
Oklahoma, which shall look solely to the Principal Shareholders for
compensation. No marketing fee or other compensation is owed to ProForma West,
Ltd., LLC as a result of this Agreement or the transactions contemplated herein.
5.24 Vote Required. The affirmative votes of the holders of a majority
of the outstanding shares of ISG Common Stock are the only votes of the holders
of any class or series of ISG Stock necessary to approve this Agreement and the
Merger.
5.25 Investment Representations.
(a) Each ISG Shareholder is knowledgeable regarding
HomeSeekers's business affairs and financial condition, and has acquired
sufficient information about HomeSeekers to reach an informed and knowledgeable
decision to acquire the HomeSeekers Shares. The ISG Shareholder is acquiring the
HomeSeekers Shares for his or her own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act.
(b) Each ISG Shareholder understands that the HomeSeekers
Shares have not been registered under the Securities Act or in any state in
reliance upon specific exemptions therefrom, which exemptions depend upon, among
other things, the bona fide nature of the ISG Shareholder's investment intent as
expressed herein.
(c) By reason of Each ISG Shareholder's business or financial
experience or the business or financial experience of the ISG Shareholder's
professional advisors who are unaffiliated with HomeSeekers, the ISG Shareholder
has the capacity to protect his or her own interests in the acquisition of the
HomeSeekers Shares.
(d) Each ISG Shareholder understands that the HomeSeekers
Shares will constitute "restricted securities" under Rule 144 promulgated under
the Securities Act, and that the Shareholder's ability to resell the HomeSeekers
Shares (subject to the registration rights under Article XI below) will be
limited accordingly.
5.26 Disclosure. No representation or warranty made by the Principal
Shareholders in this Agreement, nor any document, written information,
statement, financial statement, certificate, schedule or exhibit prepared and
furnished or to be prepared and furnished by ISG or its representatives pursuant
hereto or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact, or omits or will omit to
state a material fact necessary to make the statements or facts contained herein
or therein not misleading in light of the circumstances under which they were
furnished. There is no event, fact or condition that has resulted in, or could
reasonably be expected to result in, a material adverse
Agreement and Plan of Merger
April 3, 2000
Page -23-
effect on ISG's Business that has not been set forth in this Agreement or in the
ISG Disclosure Schedule. ISG has provided copies to HomeSeekers of all documents
and information requested by HomeSeekers pursuant to HomeSeekers's diligence
requests.
ARTICLE VI
COVENANTS OF ISG
6.1 Regular Course of Business. Except as otherwise consented to in
writing by HomeSeekers, prior to the Effective Date ISG shall conduct its
respective business in the ordinary and usual course consistent with past
practice and shall use reasonable efforts to maintain and preserve intact its
business organizations, keep available the services of its officers and
employees and maintain positive relations with licensors, licensees, suppliers,
contractors, distributors, customers and others having business relationships
with ISG. ISG shall promptly notify HomeSeekers of any event or occurrence not
in the ordinary course of business and will not enter into or amend any
agreement or take any action which reasonably could be expected to have a
material adverse effect on ISG's Business.
6.2 Restricted Activities and Transactions. Except as provided herein
or as otherwise consented to in writing by HomeSeekers, prior to the Effective
Date, ISG will not:
(a) propose, adopt or permit an amendment of ISG's Articles of
Incorporation or ISG's Bylaws;
(b) issue, sell, encumber or deliver, or agree to issue, sell,
encumber or deliver, any shares of any class of capital stock of ISG or any
securities convertible into any such shares or convertible into securities in
turn so convertible, or any options, warrants, or other rights calling for the
issuance, sale or delivery of any such shares or convertible securities or
authorize or propose any change in its equity capitalization;
(c) split, combine or reclassify any of its capital stock or
issue or authorize or propose the issuance or authorization of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or repurchase, redeem or otherwise acquire any shares of its
capital stock,
(d) mortgage or pledge any of its assets, tangible or
intangible;
(e) (i) borrow, or agree to borrow, any funds or voluntarily
incur, assume or become subject to, whether directly or by way of guarantee or
otherwise, any obligation or liability (absolute or contingent), (ii) cancel or
agree to cancel any debts or claims, (iii) lease, sell or transfer, agree to
lease, sell or transfer, or grant or agree to grant any preferential rights to
lease or acquire, any of its assets, property or rights (except for (A)
dispositions of obsolete or
Agreement and Plan of Merger
April 3, 2000
Page -24-
worthless assets, (B) sales of immaterial assets not in excess of $10,000 in the
aggregate and (C) leases of equipment in the ordinary course of business
pursuant to commitments as set forth in the ISG Disclosure Schedule), or (iv)
make or permit any material amendments or termination of any material contract,
agreement, license or other right to which it is a party;
(f) grant any increase in compensation to any employee or
director (except for annual increases in salary or wages of, and bonus grants
made to, employees in the ordinary course of business consistent with past
practice, which increases or grants have been consented to in writing by
HomeSeekers and have been listed in the ISG Disclosure Schedule), or amend in
any respect the terms of any Plan or adopt any new Plan or similar arrangements
or agreements (except in each case as specifically provided in this Agreement or
as required by law), or enter into or amend any employment, severance or similar
arrangement;
(g) accelerate, amend or change the period of exercisability
of any rights to purchase securities of ISG or change the vesting period of any
restricted stock of ISG or authorize cash payments in exchange for any
outstanding ISG Options;
(h) hire any management personnel or terminate any employee of
ISG, except in the ordinary course of business involving a person with an annual
salary of less than $24,000 and only (in the case of a new hire) pursuant to an
at-will arrangement without any severance benefits;
(i) acquire control or ownership of any other corporation,
association, joint venture, partnership, business trust or other business
entity, or acquire control or ownership of all or a substantial portion of the
assets of any of the foregoing, or incorporate or form, or cause to be
incorporated or formed, any corporation, association, joint venture,
partnership, business trust or other business entity, or merge, consolidate or
otherwise combine with any other corporation (except as provided for in this
Agreement), or otherwise acquire or agree to acquire any assets which are
material, individually or in the aggregate, to the ISG Business;
(j) pay, discharge or satisfy any claims, liabilities or
obligations (whether absolute, accrued, contingent or otherwise), other than the
payment, discharge or satisfaction of in the ordinary course of business
consistent with past practice of liabilities reflected or reserved against in
the ISG Financial Statements;
(k) except in the ordinary course of business, enter into or
agree to enter into any transaction material to ISG's Business;
(l) transfer or license to any person or entity, or otherwise
extend, amend or modify, any rights to the ISG Intellectual Property Rights;
Agreement and Plan of Merger
April 3, 2000
Page -25-
(m) enter into or amend any agreements pursuant to which any
other party is granted most favored customer status or exclusive marketing,
distribution or other similar rights with respect to any products of ISG;
(n) violate, amend or otherwise modify the material terms of
any of the contracts set forth on the ISG Disclosure Schedule;
(o) commence a lawsuit other than for the routine collection
of bills or to enforce ISG's rights under this Agreement, or settle a lawsuit;
(p) change the accounting methods or practices followed by
ISG, including any change in any assumption underlying, or method of
calculating, any bad debt, contingency or other reserve, except as may be
required by changes in generally accepted accounting principles, make or change
any material Tax election, adopt or change any Tax accounting method, file any
material Return or any amendment to a material Return (other than as required
and in accordance with Section 6.5), enter into any material closing agreement,
settle any material Tax claim or assessment, or consent to any extension or
waiver of the limitation period applicable to any material Tax claim or
assessment, without the prior consent of HomeSeekers, which consent will not be
unreasonably withheld (for purposes of this covenant a "material" Tax Return,
closing agreement, Tax claim or assessment shall mean a Tax liability with
respect to each such item in excess of $10,000);
(q) take any action that would result in any of the
representations and warranties of ISG set forth in this Agreement becoming
untrue;
(r) make any changes in its investment portfolio other than
the reinvestment of the proceeds of maturing, redeemed or prepaid securities,
obligations or other investments into United States Treasury securities maturing
ninety (90) days or less from the date of investment;
(s) allow or permit to be done any act by which any of its
insurance policies may be suspended, impaired or canceled;
(t) fail to comply in any material respect with all laws
applicable to it; or
(u) authorize or propose any of the foregoing, or enter into
any contract, agreement, commitment or arrangement to do any of the foregoing.
6.3 Dividends and Distributions; Repurchases. Except as otherwise
consented to in writing by HomeSeekers prior to the Effective Date, ISG will not
declare or pay any dividend on its capital stock in cash, stock or property, and
will not redeem, repurchase or otherwise acquire any shares, or rights to
acquire shares, of its capital stock.
Agreement and Plan of Merger
April 3, 2000
Page -26-
6.4 No Default or Violation. Except as otherwise consented to in
writing by HomeSeekers, prior to the Effective Date, ISG will use its best
efforts not to (a) violate, or commit a breach of or a default under, any
contract, agreement, lease, license, mortgage or commitment to which it is a
party or to which any of its assets may be subject or (b) violate any statute,
regulation, ordinance, writ, injunction, order, judgment or decree, or any other
requirement of any governmental body or court, applicable to its assets or
business, the effect of which in any such case in clauses (a) or (b) would be
materially adverse to ISG's Business.
6.5 Taxes; Consent. ISG shall prepare and timely file all Returns and
amendments thereto required to be filed by it on or before the Closing Date,
except that it is understood and agreed that ISG has filed for extensions on its
income tax returns for the year 1999. HomeSeekers shall have a reasonable
opportunity to review all Returns and amendments thereto and to approve such
Returns (which approval shall not be unreasonably withheld). ISG shall pay and
discharge all Taxes, assessments and governmental charges upon or against it or
any of its properties or assets, and all liabilities at any time existing,
before the same shall become delinquent and before penalties accrue thereon,
except to the extent and as long as: (a) the same are being contested in good
faith and by appropriate proceedings pursued diligently and in such a manner as
not to cause any material adverse effect upon the condition (financial or
otherwise) or operations of ISG or any shareholder; and (b) ISG shall have set
aside on its books adequate reserves for such Taxes. Between the date of this
Agreement and the Closing Date, ISG shall give HomeSeekers and its authorized
representatives full access to all properties, books, records and Returns of or
relating to ISG, whether in possession of ISG or third-party professional
advisors or representatives in order that HomeSeekers may have full opportunity
to make such investigations as it shall desire to make of the affairs of ISG.
ISG shall ensure that all third-party advisors and representatives of ISG,
including without limitation accountants and attorneys, fully cooperate and be
available to HomeSeekers in connection with such investigation. ISG shall, as of
the Closing Date, terminate all tax allocation agreements or tax sharing
agreements with respect to ISG and shall ensure that any such agreements are of
no further force or effect as to ISG on and after the Closing Date.
6.6 Advice of Changes. ISG will promptly advise HomeSeekers in writing
of (a) any event occurring subsequent to the date of this Agreement which would
render any representation or warranty of ISG contained in this Agreement, if
made on or as of the date of such event or the date of the Closing, untrue or
inaccurate or (b) any material adverse change in ISG's Business.
6.7 Negotiation With Others. From and after the date of this Agreement
until the earlier of the Effective Date or the termination of this Agreement in
accordance with its terms, ISG shall not, directly or indirectly, (a) solicit,
initiate discussions or engage in negotiations with any person (whether such
negotiations are initiated by ISG or otherwise) or take any other action
intended or designed to facilitate the efforts of any person, other than
HomeSeekers, relating to the possible acquisition of ISG (whether by way of
merger, purchase of capital stock, purchase of assets or otherwise) or any
material portion of its or their capital stock or assets (with any such
Agreement and Plan of Merger
April 3, 2000
Page -27-
efforts by any such person, including without limitation a firm proposal to make
such an acquisition, to be referred to as an "Acquisition Proposal"), (b)
provide information with respect to ISG to any person, other than HomeSeekers,
relating to a possible Acquisition Proposal by any person, other than
HomeSeekers, (c) enter into an agreement with any person, other than
HomeSeekers, providing for a possible Acquisition Proposal, or (d) make or
authorize any statement, recommendation or solicitation in support of any
possible Acquisition Proposal by any person other than by HomeSeekers. In
addition, ISG agrees to immediately cease any and all existing activities,
discussions or negotiations with any parties conducted prior to the date hereof
with respect to the foregoing.
6.8 Acquisition Proposals. ISG will provide HomeSeekers with immediate
notice of any inquiry or offer ISG receives from or on behalf of any third party
of the type referred to in Section 6.7 hereof, including in such notice the
identity of the third party and a complete description of any such inquiry or
offer, and will provide HomeSeekers with immediate notice if ISG provides or
furnishes any information to any third party relating to a possible Acquisition
Proposal.
6.9 Consents, Approvals and Filings. ISG will use its best efforts to
comply as promptly as practicable with the governmental requirements specified
in Section 5.5 hereof and to obtain on or before the Closing all necessary
approvals, authorizations, consents, licenses, clearances or orders of
Governmental Entities referred to in such section or of other persons referred
to in Section 5.6 or the ISG Disclosure Schedule.
6.10 Access to Records and Properties. HomeSeekers may, prior to the
Effective Date, through its employees, agents and representatives, continue to
conduct or cause to be conducted a detailed review of the business, financial
condition, properties, assets, books and records of ISG. ISG agrees to assist
HomeSeekers in conducting such review and investigation and will provide, and
will cause its independent public accountants to provide (subject to
HomeSeekers's agreement to any hold-harmless or indemnity reasonably required by
such independent public accountants), HomeSeekers and its employees, agents and
representatives full access to, and complete information concerning all aspects
of the business of ISG, including its books, records (including Returns filed or
in preparation), personnel and premises, the audit work papers and other records
relating to ISG of its independent public accountants. Neither any investigation
by HomeSeekers nor the receipt by HomeSeekers of any data or information from
ISG, its independent public accountants and other representatives or advisors
will affect the right of HomeSeekers or Subsidiary to rely on the
representations, warranties or covenants of ISG or the right of HomeSeekers to
terminate this Agreement as provided in Section 13.1 hereof.
ARTICLE VII
CERTAIN AGREEMENTS AND COVENANTS OF THE PARTIES
Agreement and Plan of Merger
April 3, 2000
Page -28-
7.1 Further Assurances. Each party shall execute and deliver such
additional instruments and other documents and shall take such further actions
as may be necessary or appropriate to effectuate, carry out and comply with all
of the terms of this Agreement and the transactions contemplated hereby and to
satisfy the conditions set forth in Articles VIII and IX. The Principal
Shareholders shall cause ISG to comply with all of the covenants of ISG under
this Agreement.
7.2 Termination of Bonus Arrangements. Other than the accrued 1999
bonuses set forth in section 5.9 of the ISG Disclosure Schedule, prior to the
Closing, all existing bonus plans or incentive compensation arrangements between
ISG and its employees shall have been canceled as they apply to any of the
Principal Shareholders.
7.3 Trading in HomeSeekers Common Stock. Except as otherwise expressly
consented to by HomeSeekers, from the date of this Agreement until the Effective
Date, neither ISG, the ISG Shareholders, nor any of ISG's Affiliates will
directly or indirectly purchase or sell (including short sales) any shares of
HomeSeekers Common Stock in any transactions effected on Nasdaq or otherwise.
7.4 Indebtedness. The Principal Shareholders and ISG covenant and agree
that the aggregate book amount of the total liabilities of ISG, including
indebtedness for borrowed money, calculated in accordance with GAAP, but not
including deferred revenue (the "ISG Indebtedness"), shall not exceed Five
Hundred Seventy-Five Thousand Five Hundred Forty-One Dollars ($575,541) on the
Closing Date as set forth on the ISG Disclosure Schedule. If the ISG
Indebtedness on the Closing Date exceeds Five Hundred Seventy-Five Thousand Five
Hundred Forty-One Dollars ($575,541), then HomeSeekers shall be entitled to such
excess as Indemnifiable Damages or such excess shall, if known on the Closing
Date, be deducted from the Purchase Price.
7.5 Approval of Shareholders. The Principal Shareholders represent and
warrant that, by virtue of the Unanimous Consent of ISG's shareholders attached
hereto as Exhibit 7.5, the ISG Shareholders have unanimously approved of the
execution and closing of this Agreement and of the merger and other transactions
contemplated herein.
7.6 Releases. With the exception of accrued 1999 bonuses and accrued
vacation set forth in the ISG Disclosure Schedule, the Principal Shareholders
hereby release and discharge HomeSeekers, Subsidiary, each of their officers and
directors, and ISG from, and agree and covenant that in no event will the
Principal Shareholders commence any litigation or other legal or administrative
proceeding against, HomeSeekers, Subsidiary, each of their officers and
directors, or ISG, whether in law or equity, relating to any and all claims and
demands, known and unknown, suspected and unsuspected, disclosed and
undisclosed, for damages, actual or consequential, other than claims or demands
arising out of this Agreement or the transactions contemplated by this
Agreement. HomeSeekers and Subsidiary hereby release and discharge the
Agreement and Plan of Merger
April 3, 2000
Page -29-
ISG Shareholders from, and agree and covenant that in no event will HomeSeekers
or Sub commence any litigation or other legal or administrative proceeding
against, the ISG Shareholders, whether in law or equity, relating to any and all
claims and demands, known and unknown, suspected and unsuspected, disclosed and
undisclosed, for damages, actual or consequential, other than claims or demands
arising out of this Agreement or the transactions contemplated by this
Agreement.
7.7 Management of the Surviving Corporation. HomeSeekers covenants to
manage the Surviving Corporation in a responsible manner consistent with a
mutually agreed-upon business plan for calendar year 2000. Pursuant to the
mutually agreed-upon business plan for calendar year 2000, HomeSeekers will
infuse Two Hundred Thousand Dollars ($200,000) of capital into the Surviving
Corporation for advertising, marketing and equipment expenditures over the
course of calendar year 2000. The schedule for such capital infusion, and the
revenue recovery therefore shall be subject to the mutually agreed 2000 business
plan. HomeSeekers will act in good faith and fair dealing with respect to the
contingent payment set forth in Section 2.3 of this Agreement. HomeSeekers will
not seek to avoid payment of the contingent payment set forth in Section 2.3
through management decisions that have no business justification other than to
avoid payment of the contingent payment set forth in Section 2.3. HomeSeekers
will consult with the Principal Shareholders, without being required to obtain
the consent of the Principal Shareholders, regarding management decisions
directly affecting the contingent payment set forth in Section 2.3 of this
Agreement
ARTICLE VIII
CONDITIONS TO THE OBLIGATIONS OF HOMESEEKERS
The obligations of HomeSeekers to effect the transactions contemplated
hereby shall be subject to the fulfillment at or prior to the Closing Date of
the following conditions, any or all of which may be waived in whole or in part
by HomeSeekers.
8.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of the Principal Shareholders
and ISG contained in this Agreement shall be true and correct in all material
respects at and as of the Closing Date with the same force and effect as though
made at and as of that time except (i) for changes specifically permitted by or
disclosed pursuant to this Agreement, and (ii) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date. The Principal Shareholders and ISG shall have
performed and complied with all of their obligations required by this Agreement
to be performed or complied with at or prior to the Closing Date, including the
obligations set forth in Article VII herein. The Principal Shareholders and ISG
shall have delivered to HomeSeekers a certificate, dated as of the Closing Date,
duly signed, certifying that such representations and warranties are true and
correct and that all such obligations have been performed and complied with.
Agreement and Plan of Merger
April 3, 2000
Page -30-
8.2 No Material Adverse Change or Destruction of Property. Between the
date hereof and the Closing Date, (i) there shall have been no Material Adverse
Change of ISG or the Business, (ii) there shall have been no adverse federal,
state or local legislative or regulatory change affecting in any material
respect the service, or products of ISG or ISG's Business, and (iii) no ISG
Assets shall have been damaged by fire, flood, casualty, riot or other cause
(regardless of insurance coverage for such damage), and there shall have been
delivered to HomeSeekers a certificate to that effect, dated as of the Closing
Date and signed by the Seller.
8.3 Corporate Certificate. ISG shall have delivered to HomeSeekers (i)
copies of the Charter Documents as in effect immediately prior to the Closing
Date, (ii) copies of resolutions adopted by its Board of Directors and the ISG
Shareholders authorizing the transactions contemplated by this Agreement, (iii)
written resignations of ISG's officers and Board of Directors and (iv) a
certificate of good standing issued by the Secretary of State of the State of
ISG's incorporation as of a date not more than ten (10) days prior to the
Closing Date, certified in the case of subsections (i) and (ii) as of the
Closing Date by the Secretary of ISG as being true, correct and complete.
8.4 Consents. ISG and the Principal Shareholders shall have received
consents to the transactions contemplated hereby and waivers of rights to
terminate or modify any material rights or obligations of ISG and the Principal
Shareholders from any person from whom such consent or waiver is required under
any Contract to which the Principal Shareholders, ISG or ISG's assets are bound
as of a date not more than ten (10) days prior to the Closing Date, or who, as a
result of the transactions contemplated hereby, would have such rights to
terminate or modify such contracts, either by the terms thereof or as a matter
of law.
8.5 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit, invalidate or collect damages arising out of
the transactions contemplated hereby, and which, in the judgment of HomeSeekers,
makes it inadvisable to proceed with the transactions contemplated hereby.
8.6 Due Diligence Review. HomeSeekers shall have completed their due
diligence review of ISG, ISG's assets and the business pursuant to Section 6.10,
and shall be satisfied with the results of such review and assessment.
8.7 Employment Agreement. Messrs. Xxxxx, Wostenberg, Ziegler, and O'Day
shall have entered into the Employment Agreements in the forms attached hereto
as Exhibit 8.7.
8.8 Lien Releases. All Liens encumbering or otherwise affecting ISG's
Business or ISG's assets, except for the UCC-1 Financing Statement filed by
Intertel and property taxes not yet due and payable, shall have been released in
form and substance acceptable to HomeSeekers.
Agreement and Plan of Merger
April 3, 2000
Page -31-
8.9 Opinion of Counsel. HomeSeekers shall have received an opinion
dated as of the Closing Date, from counsel to ISG and the Principal Shareholders
in form and substance acceptable to HomeSeekers.
8.10 Registration Rights Agreement. The ISG Shareholders shall have
executed a Registration Rights Agreement in the form attached hereto as Exhibit
8.10.
8.11 Securities Laws. HomeSeekers shall have received all necessary
consents and otherwise complied with any securities laws applicable to the
issuance of HomeSeekers Shares in connection with the transactions contemplated
hereby.
ARTICLE IX
CONDITIONS TO THE
OBLIGATIONS OF ISG AND THE PRINCIPAL SHAREHOLDERS
The obligations of ISG and the Principal Shareholders to effect the
transactions contemplated hereby shall be subject to the fulfillment at or prior
to the Closing Date of the following conditions, any or all of which may be
waived in whole or in part by the Principal Shareholders:
9.1 Accuracy of Representations and Warranties and Compliance with
Obligations. The representations and warranties of HomeSeekers and Subsidiary
contained in this Agreement shall be true and correct in all material respects
at and as of the Closing Date with the same force and effect as though made at
and as of that time except (i) for changes specifically permitted by or
disclosed pursuant to this Agreement, and (ii) that those representations and
warranties which address matters only as of a particular date shall remain true
and correct as of such date. HomeSeekers and Subsidiary shall have performed and
complied in all material respects with all of their obligations required by this
Agreement to be performed or complied with at or prior to the Closing Date.
HomeSeekers and Subsidiary shall have delivered to the Principal Shareholders
certificates, dated as of the Closing Date, and signed by executive officers
thereof, certifying that such representations and warranties are true and
correct, and that all such obligations have been performed and complied with, in
all material respects.
9.2 Consideration and Deposits. At the Closing, HomeSeekers shall have
instructed its transfer agent to convert the ISG shares into HomeSeekers Shares
in accordance with Section 2.1 of this Agreement.
9.3 Employment Agreement. HomeSeekers shall have caused Messrs. Xxxxx,
Wostenberg, Ziegler, and O'Day to enter into the Employment Agreements in the
forms attached hereto as Exhibit 8.7.
Agreement and Plan of Merger
April 3, 2000
Page -32-
9.4 Unanimous Consent. HomeSeekers shall have delivered to the
Principal Shareholders a copy of a unanimous consent adopted by the Boards of
Directors of HomeSeekers and Subsidiary authorizing the transactions
contemplated by this Agreement.
9.5 Opinion of Counsel. ISG shall have received an opinion dated as of
the Closing Date, from counsel to HomeSeekers in form and substance acceptable
to ISG, which will not include any opinion whatsoever regarding taxation to ISG
and/or the Principal Shareholders under the Code.
9.6 No Adverse Litigation. There shall not be pending or threatened any
action or proceeding by or before any court or other governmental body which
shall seek to restrain, prohibit, invalidate or collect damages arising out of
the transactions contemplated hereby, and which, in the judgment of ISG and the
Principal Shareholders, makes it inadvisable to proceed with the transactions
contemplated hereby.
9.7 Shareholder Approval. The Agreement and the transactions
contemplated hereby shall have been adopted and approved by a majority of the
holders of the issued and outstanding capital stock of ISG.
9.8 Registration Rights Agreement. HomeSeekers shall have executed a
Registration Rights Agreement in the form attached hereto as Exhibit 8.10.
ARTICLE X
INDEMNIFICATION
10.1 Agreement by Principal Shareholders to Indemnify. The Principal
Shareholders agree to jointly and severally indemnify and hold HomeSeekers and
their Affiliates, officers, directors, and agents thereof (collectively, the
"Indemnified Parties") harmless from and against the aggregate of all expenses,
losses, costs, deficiencies, liabilities and damages (including, without
limitation, related counsel and paralegal fees and expenses) incurred or
suffered by the Indemnified Parties (collectively, "Indemnifiable Damages")
resulting from or arising out of (i) any breach of a representation or warranty
made by the Principal Shareholders in or pursuant to this Agreement; (ii) any
breach of the covenants or agreements made by the Principal Shareholders in this
Agreement; (iii) any inaccuracy in any certificate delivered by the Principal
Shareholders pursuant to this Agreement; (iv) any ISG Indebtedness in excess of
the amount set forth in Section 7.4; (v) any and all Taxes of ISG with respect
to any period (or any portion thereof) up to and including the Effective Date,
except for Taxes of ISG which are reflected as current liabilities for Taxes
that exist as of the Effective Date ("Current Tax Liabilities") on the Closing
Balance Sheet; or (vi) the management of ISG's stock option plan
Agreement and Plan of Merger
April 3, 2000
Page -33-
and/or ISG's 401(k) plan, together with all legal fees, disbursements and
expenses incurred by HomeSeekers and Subsidiary in connection therewith.
10.2 Limitations on Indemnity Obligation. The Principal Shareholders
shall have liability hereunder only to the extent that Indemnifiable Damages
exceed Ten Thousand Dollars ($10,000). If it is determined, as provided, that
any of the Indemnified Parties is entitled to indemnification, indemnification
shall be effected solely by set-off against the shares held back pursuant to
Section 10.4 of this Agreement. However, to the extent that the held back
shares, after satisfaction of all other indemnity claims, are insufficient to
effect indemnification with respect to Indemnifiable Damages arising out of a
breach of Section 5.13 of this Agreement, each of the Principal Shareholders
shall be jointly and severally liable to indemnify the Indemnified Parties. The
Principal Shareholders shall not be liable for Indemnifiable Damages arising out
of a breach of Section 5.13 of this Agreement to the extent that such
Indemnifiable Damages are based on a claim that was not asserted within three
years of the Effective Date or to the extent that such Indemnifiable Damages are
in excess of Four Million Two Hundred Thirty-Eight Thousand Four Hundred
Sixty-Five Dollars ($4,238,465).
10.3 Survival of Representations and Warranties. Each of the
representations and warranties made by the Principal Shareholders in this
Agreement or pursuant hereto shall survive the Closing of the transactions
contemplated hereby. Notwithstanding any knowledge of facts determined or
determinable by any party by investigation, each party shall have the right to
fully rely on the representations, warranties, covenants and agreements of the
other parties contained in this Agreement or in any other documents or papers
delivered in connection herewith. Each representation, warranty, covenant and
agreement of the parties contained in this Agreement is independent of each
other representation, warranty, covenant and agreement.
10.4 Security for the Indemnification Obligation. As a security for the
indemnification obligations contained in this Section 10, at the Closing,
HomeSeekers shall set aside and hold certificates representing One Million Five
Hundred Thousand Dollars of the HomeSeekers Shares into which the ISG Shares are
converted pursuant to Section 2.1(b) of this Agreement (the "Held Back Shares"),
based on the average closing sale price of a share of HomeSeekers Common Stock
as quoted on the Nasdaq Stock Market ("Nasdaq") for the ten (10) consecutive
trading days which precede the day immediately prior to the Closing Date, and
the Principal Shareholders hereby grant HomeSeekers a first priority security
interest in such Held Back Shares. HomeSeekers may set off against the Held Back
Shares any Indemnifiable Damages, subject to the following terms and conditions:
(a) HomeSeekers shall give written notice to the holders of
Held Back Shares of any claim for Indemnifiable Damages or any other loss,
damage, cost or expense which HomeSeekers claims to have sustained by reason
thereof, and the basis of such claim;
Agreement and Plan of Merger
April 3, 2000
Page -34-
(b) Such set off shall be effected on the later to occur of
the expiration of ten (10) days from the date of such notice or, if such claim
is contested, the date the dispute is resolved;
(c) For purposes of any set off against the Held Back Shares,
the Held Back Shares shall be valued at the closing price for a share of
HomeSeekers common stock on the date such set-off is effected.
(d) All Held Back Shares shall be deemed to be owned by the
Principal Shareholders and such parties shall be entitled to vote the Held Back
Shares; provided, however, that there shall also be deposited with HomeSeekers
all shares of HomeSeekers Common Stock or other assets issued to or paid upon
Held Back Shares as a result of any stock or other dividend or distribution or
stock split with respect to the Held Back Shares.
(e) One year after the Effective Date, after payment to the
Indemnified Parties of all of its indemnity claims approved as provided in this
Agreement, HomeSeekers shall retain a sufficient number of Held Back Shares to
provide for payment of any unresolved indemnity claims, and shall retain an
additional number of Held Back Shares equal to (i) Seven Hundred Fifty Thousand
Dollars ($750,000), divided by (ii) the average closing sale price of a share of
HomeSeekers Common Stock as quoted on the Nasdaq for the ten (10) consecutive
trading days which precede the day immediately prior to the first year
anniversary of the Effective Date, as reported (absent manifest error in the
printing thereof) by The Wall Street Journal (Western Edition). HomeSeekers
shall release the remainder of the Held Back Shares to the ISG Shareholders
pursuant to written instructions signed by each shareholder named in the
certificates representing the Held Back Shares. For example, if the average
closing sale price for a share of HomeSeekers common stock on the first
anniversary of the Effective Date is $28.00, and if the unresolved indemnity
claims are for $280,000 HomeSeekers shall retain 10,000 shares with respect to
the unresolved indemnity claims plus an additional 26,786 shares, and shall
release the remaining Held Back Shares.
(f) HomeSeekers agrees to deliver to the Principal
Shareholders no later than two years after the Closing Date any Held Back Shares
(and distributions thereon or proceeds thereof) then held by HomeSeekers unless
there then remains unresolved any claim for Indemnifiable Damages hereunder for
which prior notice has been given, in which event HomeSeekers shall retain such
number of Held Back Shares (and such amount of proceeds therefrom or
distributions thereon) as is sufficient to satisfy any such unresolved claim, as
well as the reasonable attorneys fees and costs associated therewith, and shall
release the remaining Held Back Shares (and such remaining proceeds to the
Principal Shareholders). Any Held Back Shares (and proceeds) remaining on
deposit after all such claims shall have been satisfied shall be returned to the
Principal Shareholders promptly after the time of satisfaction.
(g) All payments for Indemnifiable damages shall be treated as
adjustments to the Merger Consideration.
Agreement and Plan of Merger
April 3, 2000
Page -35-
(h) Except as limited by Section 10.2, if the Held Back Shares
are insufficient to set off any claim for Indemnifiable Damages made hereunder
(or have been delivered to the Principal Shareholders prior to the making or
resolution of such claim), then HomeSeekers may take any action or exercise any
remedy available to it by appropriate legal proceedings to collect the
Indemnifiable Damages.
(i) Except as limited by Section 10.2, the remedies provided
herein shall be cumulative and shall not preclude HomeSeekers from asserting any
other right, or seeking any other remedies against the Principal Shareholders.
The Principal Shareholders hereby waive any right to contribution or any other
similar right they may have against ISG or the Surviving Corporation as a result
of their agreement to indemnify in this Section.
ARTICLE XI
SECURITIES LAW MATTERS
11.1 Registration. The ISG Shareholders shall have the registration
rights set forth in the Registration Rights Agreement attached hereto as
"Exhibit 8.10."
11.2 Disposition of Shares. The ISG Shareholders agree not to sell,
transfer or otherwise dispose of any HomeSeekers Shares, except pursuant to (a)
an exemption from the registration requirements under the Securities Act, which
does not require the filing by HomeSeekers with the SEC of any registration
statement, offering circular or other document, in which case, each such ISG
Shareholder shall first supply to HomeSeekers an opinion of counsel (which
counsel and opinions shall be satisfactory to HomeSeekers) that such exemption
is available, or (b) an effective registration statement filed by HomeSeekers
with the SEC under the Securities Act.
11.3 Legends. The certificates representing HomeSeekers Shares shall
bear the following legend:
THE SHARES REPRESENTED BY THIS CERTIFICATE MAY NOT BE SOLD,
TRANSFERRED OR OTHERWISE DISPOSED OF BY THE SHAREHOLDER EXCEPT
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND IN COMPLIANCE WITH
APPLICABLE SECURITIES LAWS OF ANY STATE WITH RESPECT THERETO,
OR IN ACCORDANCE WITH AN OPINION OF COUNSEL IN FORM AND
SUBSTANCE SATISFACTORY TO THE ISSUER THAT AN EXEMPTION FROM
SUCH REGISTRATION IS AVAILABLE.
Agreement and Plan of Merger
April 3, 2000
Page -36-
HomeSeekers may, unless a registration statement is in effect covering such
shares, place stop transfer orders with its transfer agents with respect to such
certificates in accordance with federal securities laws.
ARTICLE XII
DEFINITIONS
12.1 Defined Terms. As used herein, the following terms shall have the
following meanings:
"Affiliate" shall have the meaning ascribed to it in Rule 12b-2 of the
General Rules and Regulations under the Securities Exchange Act of 1934, as
amended, as in effect on the date hereof.
"Average Closing Sale Price" shall have the meaning set forth in
section 2.1(b) of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended.
"Contract" means any indenture, lease, sublease, license, loan
agreement, mortgage, note, indenture, restriction, will, trust, commitment,
obligation or other contract, agreement or instrument, whether written or oral.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Governmental Entity" means any nation or government, any state,
regional, local or other political subdivision thereof, and any entity or
official exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien or charge of any kind (including, but not limited to, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code or comparable law or any jurisdiction in connection
with such mortgage, pledge, security interest, encumbrance, lien or charge).
"Material Adverse Change (or Effect)"means a change (or effect), in the
condition (financial or otherwise), properties, assets, liabilities, rights,
obligations, operations, business or prospects of ISG which change (or effect)
individually or in the aggregate, is materially adverse to such condition,
properties, assets, liabilities, rights, obligations, operations, business or
prospects.
Agreement and Plan of Merger
April 3, 2000
Page -37-
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, estate, trust,
unincorporated association, joint venture, Governmental Entity or other entity,
of whatever nature.
"Register," "registered" and "registration" refer to a registration of
the offering and sale of securities effected by preparing and filing a
registration statement in compliance with the Securities Act and the declaration
or ordering of the effectiveness of such registration statement.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended.
"Shareholder Transaction Fees"means all legal, accounting, tax,
consulting, appraisal and financial advisory and other fees and expenses,
including any transfer taxes, fees and expenses and the cost of title insurance
and surveys, incurred, paid, or payable by ISG or the ISG Shareholders in
connection with the transactions contemplated hereby.
"Tax Return" means any tax return, filing or information statement
required to be filed in connection with or with respect to any Taxes; and
"Taxes" means all taxes, fees or other assessments, including, but not
limited to, income, excise, property, sales, franchise, intangible, withholding,
social security and unemployment taxes imposed by any federal, state, local or
foreign governmental agency, and any interest or penalties related thereto.
12.2 Other Definitional Provisions.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificates, reports or other documents made or
delivered pursuant hereto or thereto, unless the context otherwise requires.
(b) Terms defined in the singular shall have a comparable
meaning when used in the plural, and vice versa.
(c) All matters of an accounting nature in connection with
this Agreement and the transactions contemplated hereby shall be determined in
accordance with GAAP applied on a basis consistent with prior periods, where
applicable.
(d) As used herein, the neuter gender shall also denote the
masculine and feminine, and the masculine gender shall also denote the neuter
and feminine, where the context so permits.
Agreement and Plan of Merger
April 3, 2000
Page -38-
ARTICLE XIII
TERMINATION, AMENDMENT AND WAIVER
13.1 Termination. This Agreement may be terminated at any time prior to
the Closing:
(a) by mutual written consent of all of the parties hereto at
any time prior to the Closing; or
(b) by HomeSeekers in the event of a material breach by the
Principal Shareholders or ISG of any provision of this Agreement.
13.2 Effect of Termination. Except as provided in Article X and for the
provisions of Section 7.2, in the event of termination of this Agreement
pursuant to Section 13.1, this Agreement shall forthwith become void; provided,
however, that nothing herein shall relieve any party from liability for the
willful breach of any of its representations, warranties, covenants or
agreements set forth in this Agreement. In addition, the parties shall treat any
information concerning the other parties to this Agreement, regardless of the
manner in which it is furnished and specifically including (without limitation)
information provided pursuant to Sections 6.5 and 6.10 of this Agreement,
together with all analysis, compilations, studies or other documents, whether
prepared by a party or others, which contain or otherwise reflect such
information (the "Evaluation Material"), in accordance with the provisions of
this Section. The term "Evaluation Material" does not include information which
(a) is or becomes generally available to the public, (b) was available on a
non-confidential basis prior to its disclosure from another source, which source
was not prohibited from disclosing such information by a contractual, legal or
fiduciary obligation, or (c) becomes available on a non-confidential basis from
a person, other than from a person prohibited from disclosing such information
by a contractual, legal or fiduciary obligation. All parties agree, except as
required by law, regulation, regulatory authority or legal process, to keep all
Evaluation Material confidential, not to disclose or reveal any Evaluation
Material to any person, and not to use the Evaluation material for any purpose.
Each party shall be responsible for any breach of the terms of this Section by
its agents and representatives.
ARTICLE XIV
GENERAL PROVISIONS
14.1 Notices. All notices, requests, demands, claims, and other
communications hereunder shall be in writing and shall be delivered (and shall
be deemed delivered) by certified or registered mail (first class postage
pre-paid), guaranteed overnight delivery, or facsimile transmission if such
transmission is confirmed by delivery by certified or registered mail (first
class postage pre-paid) or guaranteed overnight delivery, to the following
addresses and facsimile
Agreement and Plan of Merger
April 3, 2000
Page -39-
numbers (or to such other addresses or facsimile numbers which such party shall
designate in writing to the other party):
if to HomeSeekers:
HomeSeekers, Incorporated
0000 X. XxXxxxxx Xxxx., Xxxxx 00
Xxxx, XX 00000
Attn: Xxxx Xxxxxxx, Chairman/CEO
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Xxxxxxx & Xxxxxx
000 Xxxxxxx Xxxx
Xxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to ISG:
Information Solutions Group, Inc.
0000 Xxxxxxxxx Xx., Xxxxx X-0
Xxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Principal Shareholders:
Xxxx Xxxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Xxxxxx Xxxxxxxxxx
0000 Xxxxx Xxxxx
Xxxx, XX 00000
Telephone: (000) 000-0000
Agreement and Plan of Merger
April 3, 2000
Page -00-
Xxxxxxx Xxxxx
0000 Xxxxxxxx Xxx
Xxxxxxx, XX 00000
Telephone: (000) 000-0000
Xxxxxxx O'Day
0000 Xxxxxxx Xxxxx
Xxxx, XX 00000
Telephone: (000) 000-0000
with a copy to:
Xxxx X. Xxxxxx, Esq.
Grimshaw & Xxxxxxx, P.C.
0000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
14.2 Entire Agreement. This Agreement (including the Disclosure
Schedule and Exhibits attached hereto) and other documents delivered at the
Closing pursuant hereto, contains the entire understanding of the parties in
respect of its subject matter and supersedes all prior agreements and
understandings (oral or written) between or among the parties with respect to
such subject matter. The Disclosure Schedule and Exhibits constitute a part
hereof as though set forth in full above.
14.3 Expenses. Except as otherwise provided herein, the parties shall
pay their own fees and expenses, including their own counsel fees, incurred in
connection with this Agreement or any transaction contemplated hereby, and
HomeSeekers shall bear its auditors' cost in connection with the audit of ISG's
financial statements. In no event shall HomeSeekers or Sub be responsible for
the Shareholder Transaction Fees. In the event that the contemplated transaction
fails to close due to no fault of HomeSeekers, ISG shall receive copies of the
audit report, and shall repay to HomeSeekers half the cost of the audit (such
reimbursement not to exceed $15,000) within 30 days of written demand by
HomeSeekers. The Principal Shareholders hereby agree to pay any and all sales
and/or use taxes which may become due and owing by them as a result of the
completion of the transactions contemplated hereby.
14.4 Waiver. This Agreement may not be modified, amended, supplemented,
canceled, or discharged, except by written instrument executed by all parties.
The failure of any party to enforce any of the provisions of this Agreement
shall not be deemed a waiver of any provisions or of the right of the party
thereafter to enforce any provisions.
Agreement and Plan of Merger
April 3, 2000
Page -41-
14.5 Assignment. The rights and obligations of this Agreement shall
bind and inure to the benefit of the parties and their respective successors and
assigns. Except as expressly provided herein, the rights and obligations of this
Agreement may not be assigned by any party without the prior written consent of
the other parties.
14.6 Counterparts; Facsimile. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument. Executed copies of this
Agreement of this Agreement may be delivered by facsimile, and delivery of
executed facsimile copies to the parties and their counsel shall be deemed to be
a delivery of a duplicate original and sufficient delivery to result in entry to
this Agreement by the transmitting party; provided, however, that within ten
(10) days thereafter a signed duplicate original shall be forwarded to the party
to whom a facsimile copy was forwarded.
14.7 Governing Law, Jurisdiction and Waiver of Venue. This Agreement
shall be governed by and construed in accordance with the laws of the State of
Nevada regardless of the fact that any of the parties hereto may be or may
become a resident of a different country, state, or jurisdiction. Any suit,
action, or proceeding arising out of, or with respect to, this Agreement shall
be filed in a court of competent jurisdiction within the County of Washoe, State
of Nevada or in the U.S. District Court for the District of Nevada, Northern
Division. The parties hereby consent to the personal jurisdiction of such courts
within the County of Washoe, State of Nevada and the U.S. District Court for the
District of Nevada, Northern Division. The parties hereby waive any objections
to venue in such courts with Washoe County, State of Nevada and the U.S.
District Court for the District of Nevada, Northern Division.
14.8 Representation by Counsel. Each party hereto represents and agrees
with the other that it has been represented by independent counsel of its own
choosing; it has had the full right and opportunity to consult with its
respective attorneys and other advisors and has availed itself of this right and
opportunity; its authorized officers have carefully read and fully understand
this Agreement in its entirety and have had it fully explained to them by such
party's counsel; it is fully aware of the contents hereof and the meaning,
intent and legal effect thereof; and its authorized officer is competent to
execute this Agreement and has executed this Agreement free from coercion,
duress or undue influence. Each party and its counsel cooperated in the drafting
and preparation of this Agreement and the documents referred to herein.
Accordingly, any rule of law or any legal decision that would require
interpretation of any ambiguities in this Agreement against the party that
drafted it is of no application and is hereby expressly waived. The provisions
of this Agreement shall be interpreted in a reasonable manner to effect the
intentions of the parties and this Agreement.
14.9 Attorneys' Fees. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to receive from the
Agreement and Plan of Merger
April 3, 2000
Page -42-
other its reasonable attorneys' fees, costs, and necessary disbursements in
addition to any other relief to which such party may be entitled.
14.10 Interpretation. If necessary to give effect to the terms and
provisions hereof, the masculine, feminine, and neuter gender of the singular
and plural number shall each be deemed to include the other whenever the context
so indicates. Whenever possible, each provision of this Agreement shall be
interpreted in such manner as to be valid and effective under applicable law,
such provision shall be ineffective to the extent of such prohibition or
invalidity without invalidating the remainder of such provision or the remaining
provisions of this Agreement. The parties acknowledge and agree that this
Agreement is the product of mutual negotiation and that no part herein shall be
construed against either party as the author hereof, and that this provision is
expressly made binding on any legal tribunal for any purpose.
14.11 Severability. In case any provision of this Agreement shall, for
any reason, be held to be invalid, unenforceable, or illegal, such provision
shall be severed from this Agreement, and such invalidity, unenforceable or
illegality shall not affect any other provisions of this Agreement.
14.12 Headings. Headings in this Agreement are inserted for convenience
and identification only and are in no way intended to describe, interpret,
define, limit the scope, extent or intent of this Agreement or any provision
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
HOMESEEKERS INCORPORATED, a Nevada
corporation
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
---------------------------------
Title: Chief Executive Officer
--------------------------------
INFORMATION SOLUTIONS GROUP, a
Colorado corporation
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Name: Xxxx Xxxxxxx
---------------------------------
Agreement and Plan of Merger
April 3, 2000
Page -43-
Title: Chief Financial Officer
--------------------------------
XXXXXXXXXXXXXXX.XXX, INCORPORATED, a
Nevada corporation
By: /s/ Xxxx Xxxxxxx
-------------------------------------
Name: Xxxx Xxxxxxx
---------------------------------
Title: Chief Executive Officer
--------------------------------
PRINCIPAL SHAREHOLDERS:
/s/ XXXXXXX XXXXX
----------------------------------------
XXXXXXX XXXXX
/s/ XXXXXX XXXXXXXXXX
----------------------------------------
XXXXXX XXXXXXXXXX
/s/ XXXX XXXXXXX
----------------------------------------
XXXX XXXXXXX
/s/ XXXXXXX O'DAY
----------------------------------------
XXXXXXX O'DAY
