AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
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THIS AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK ("Agreement") is
made and entered into as of the 10th day of January, 2001, by and among RETURN
ON INVESTMENT CORPORATION, a corporation organized and existing under the laws
of the State of Delaware ("ROI"), whose address is 0000 Xxxxxxx Xxxxx Xxxx.,
Xxxxx 000, Xxxxxxxx, XX 00000, S.A.F.E. ACQUISITION CORPORATION, a corporation
organized and existing under the laws of the State of Georgia and a wholly-owned
subsidiary of ROI (the "Subsidiary"), whose address is 0000 Xxxxxxx Xxxxx Xxxx.,
Xxxxx 000, Xxxxxxxx, XX 00000, S.A.F.E. SYSTEMS, INC., a corporation organized
and existing under the laws of the State of Illinois ("S.A.F.E."), whose address
is 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, XX 00000, Xxxxxx Xxxxxxxxx, an individual
resident of Illinois ("Xxxxxxxxx"), whose address is 43W107 Xxxxxxxx, Xxxxx, XX
00000, Xxxxxx X. Xxxxxxx, an individual resident of Illinois ("Xxxxxxx"), whose
address is 000 Xxxxxxxx Xxxx, Xxxxxxxxxx, XX 00000, Xxxxxxx X. Xxxxxx, an
individual resident of Illinois ("Xxxxxx"), whose address is 00000 Xxxxx Xxxxx
Xxxxxx, Xxxxxxxxxx, XX 00000, and Xxxx X. Xxxxxxxxxxxxxx, an individual resident
of Illinois ("Spaccapaniccia"), whose address is 0000 Xxxxxxxxxx Xxxxx,
Xxxxxxxxxx, XX 00000, (Xxxxxxxxx, Xxxxxxx, Xxxxxx, and Spaccapaniccia,
individually referred to as a "Controlling Shareholder" and collectively
referred to as the "Controlling Shareholders").
W I T N E S S E T H:
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WHEREAS, the Controlling Shareholders are the owners of over 80% of the
issued and outstanding shares of the no par value common stock of S.A.F.E.; and
WHEREAS, the parties hereto desire to merge the Subsidiary with and into
S.A.F.E. by exchanging all of the issued and outstanding shares of S.A.F.E.
common stock (the "S.A.F.E. Common Stock") for a total of 400,000 shares of the
$.01 par value common stock of ROI as restricted in accordance with securities
laws, ROI's bylaws, and the Escrow Agreement as defined herein (the "ROI Common
Stock"), all subject to the terms, provisions, conditions and limitations set
forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto do hereby mutually covenant and agree as
follows:
1. THE MERGER
(a) THE MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with Section 14-2-1101, ET SEQ. of the Georgia
Business Corporation Code (the "GBCC") and the Illinois Business Corporation Act
of 1983 as codified at 805 ILCS 5/1.01 et seq. (the "IBCA"), the Subsidiary
shall be merged with and into S.A.F.E. at the Effective Time (as defined in
Section 1(c) hereof). Following the Effective Time, the separate corporate
existence of the Subsidiary shall cease, and S.A.F.E. shall continue as the
surviving corporation (the "Surviving Corporation") under the name S.A.F.E.
Systems, Inc. and
shall succeed to and assume all the rights and obligations of S.A.F.E. and the
Subsidiary in accordance with the GBCC and the IBCA.
(b) THE CLOSING; EFFECTIVE DATE. The closing of the Merger contemplated by
this Agreement (the "Closing") shall take place at such time and on such date as
is agreed to by the parties (the "Closing Date"), which (subject to satisfaction
or waiver of the conditions set forth in Section 7) shall be no later than the
second business day after satisfaction or waiver of the conditions set forth in
Section 7 at such location as the parties may agree, unless another date is
agreed to in writing by the parties hereto. If all of the parties hereto do not
agree in writing to extend the Closing Date beyond March 31, 2001, and the
Closing does not occur on or prior to such date, any party to this Agreement
may, at its sole option, terminate this Agreement by notifying the other parties
in writing of such termination. Upon such termination, each party shall be
responsible for its own costs and expenses related to this Agreement and no
party shall have any obligation hereunder except for those obligations that have
been expressly agreed to herein or agreed to in writing in a separate document
as surviving the termination of this Agreement.
(c) EFFECTIVE TIME. Subject to the provisions of this Agreement, the
parties shall file articles of merger (the "Articles of Merger") executed in
accordance with Section 14-2-1105 of the GBCC and Section 11.03 of the IBCA and
shall make all other filings or records required under the GBCC and the IBCA as
soon as practical on or after the Closing Date (the "Merger Filings"). The
Merger shall become effective at such time as the Articles of Merger are
accepted for record by the Secretary of State of the State of Illinois and the
Secretary of State of Georgia or at such other time as the Subsidiary and
S.A.F.E. shall agree as specified in the Articles of Merger but not exceeding 30
days after the date the Articles of Merger are accepted for record by the
Secretary of State of the State of Illinois and the Secretary of State of
Georgia (the "Effective Time").
(d) EFFECT OF MERGER ON THE CONSTITUENT CORPORATIONS.
(1) GENERAL. The Merger shall have the effect set forth in Section
14-2-1106 of the GBCC and Section 11.50 of the IBCA. Without limiting the
generality of the foregoing, and subject thereto, at the Effective Time of
the Merger, (i) the Surviving Corporation shall possess all assets and
property of every description, and every interest therein, wherever
located, and the rights, privileges, immunities, powers, franchises and
authority, of a public as well as of a private nature, of each of the
Subsidiary and S.A.F.E. (together, the "Constituent Corporations"), (ii)
all obligations belonging to or due each of the Constituent Corporations
shall be vested in, and become the obligations of, the Surviving
Corporation without further act or deed, (iii) title to any real estate or
any interest therein vested in either of the Constituent Corporations shall
not revert or in any way be impaired by reason of the Merger, (iv) all
rights of creditors and all liens upon any property of either of the
Constituent Corporations shall be preserved unimpaired, and (v) the
Surviving Corporation shall be liable for all of the debts and obligations
of each of the Constituent Corporations, and any claim existing, or action
or proceeding pending, by or against either of the Constituent Corporations
may be prosecuted to judgment with right of appeal, as if the Merger had
not taken place.
(2) ARTICLES OF INCORPORATION OF THE SURVIVING CORPORATION. The
Articles of Incorporation of S.A.F.E., in effect as of the Effective Time,
shall become the Articles of
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Incorporation of the Surviving Corporation from and after the Effective
Time and until thereafter amended as provided by law.
(3) BYLAWS OF THE SURVIVING CORPORATION. The Bylaws of S.A.F.E. shall
be the Bylaws of the Surviving Corporation from and after the Effective
Time and until thereafter altered, amended or repealed in accordance with
the IBCA, the Articles of Incorporation of the Surviving Corporation and
said Bylaws.
(4) DIRECTORS. The Board of Directors of S.A.F.E. at the Effective
Time shall, from and after the Effective Time, be the Board of Directors of
the Surviving Corporation until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or
removal in accordance with the Surviving Corporation's Articles of
Incorporation and applicable law.
(5) OFFICERS. The officers of S.A.F.E. at the Effective Time shall,
from and after the Effective Time, be the officers of the Surviving
Corporation until their successors have been duly elected or appointed and
qualified or until their earlier death, resignation or removal in
accordance with the Surviving Corporation's Articles of Incorporation and
Bylaws.
(6) ASSETS, LIABILITIES. At the Effective Time, the assets,
liabilities, reserves and accounts of each of the Constituent Corporations
shall be taken upon the books of the Surviving Corporation at the amounts
at which they respectively shall be carried on the books of said
corporations immediately prior to the Effective Time, except as otherwise
set forth in this Agreement and subject to such adjustments, or elimination
of intercompany items, as may be appropriate in giving effect to the Merger
in accordance with generally accepted accounting principles.
(7) TAX TREATMENT. The parties hereto acknowledge that for federal
income tax purposes, it is intended that the Merger shall qualify as a
reorganization under the provisions of Sections 368(a)(1)(A) and
368(a)(2)(E) of the Code.
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2. EFFECT OF THE MERGER ON THE STOCK OF THE CONSTITUENT CORPORATIONS;
EXCHANGE OF CERTIFICATES.
(a) Effect on Stock . As of the Effective Time, by virtue of the Merger and
without any action on the part of any holder of any stock of either of the
Constituent Corporations:
(1) CANCELLATION OF TREASURY STOCK. Each share of Subsidiary Stock
that is owned by the Subsidiary or by any subsidiary of the Subsidiary
shall automatically be canceled and retired and shall cease to exist, and
no Merger Consideration (as hereinafter defined) shall be delivered in
exchange therefor.
(2) CONVERSION OF COMPANY STOCK. All of the issued and outstanding
shares of S.A.F.E. Common Stock shall at the Effective Time be converted
into 400,000 shares of ROI Common Stock (the "Merger Consideration"). The
number of shares of ROI Common Stock referred to throughout this Agreement
shall be adjusted from time to time to reflect any stock splits or stock
dividends or reclassification of capital structure that occur after the
date of this Agreement. As of the Effective Time, all such S.A.F.E. Common
Stock shall no longer be outstanding and shall automatically be canceled
and retired and shall cease to exist, and each holder of a certificate
evidencing any S.A.F.E. Common Stock shall cease to have any rights with
respect thereto, except the right to receive the Merger Consideration to be
issued in consideration therefor upon surrender of such certificate in
accordance with Section 2(b) hereof.
(3) SUBSIDIARY STOCK. As of the Effective Time, all of the issued and
outstanding shares of Subsidiary common stock shall be converted into 1,000
shares of S.A.F.E. Common Stock.
(b) EXCHANGE OF CERTIFICATES. Upon the terms, subject to the conditions and
in reliance upon the representations and warranties contained herein and subject
to the Escrow Agreement, upon the proper surrender at Closing to ROI by the
S.A.F.E. Shareholders of the certificate or certificates which immediately prior
to the Closing represented outstanding shares of S.A.F.E. Common Stock (the
"Certificates") that are to be exchanged pursuant to Section 2(a) for the Merger
Consideration, the S.A.F.E. Shareholders shall be entitled to receive in
exchange therefor the Merger Consideration set forth opposite such S.A.F.E.
Shareholder's name on the S.A.F.E. Shareholders List (as defined in Section 6(d)
hereof).
3. CLOSING OBLIGATIONS.
(a) Closing Obligations of S.A.F.E. and the S.A.F.E. Shareholders. At the
Closing, S.A.F.E. and the S.A.F.E. Shareholders shall deliver to ROI the
following:
(1) certificates representing all of the S.A.F.E. Common Stock, duly
endorsed (or accompanied by duly executed stock powers) for transfer to
ROI;
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(2) an executed Employment Agreement between ROI and Xxxxxxxxx, the
form of which is attached hereto as Schedule A;
(3) a certificate, dated the Closing Date, stating that (i) the
representations and warranties of S.A.F.E. and the Controlling Shareholders
contained in this Agreement or any Schedule are true and correct in all
material respects on and as of the Closing Date, and (ii) S.A.F.E. and the
Controlling Shareholders have performed in all material respects all
obligations required to be performed by them under this Agreement at or
prior to the Closing.
(4) an executed Escrow Agreement, the form of which is attached hereto
as Schedule B.
(5) an executed Proxy, the form of which is attached hereto as
Schedule C.
(b) Closing Obligations of ROI. At the Closing, ROI shall deliver to the
S.A.F.E. Shareholders the following:
(1) the Merger Consideration (or evidence that the ROI Common Stock
certificates representing the Merger Consideration have been duly ordered
from ROI's stock transfer agent);
(2) an executed Employment Agreement between ROI and Xxxxxxxxx, the
form of which is attached hereto as Schedule A;
(3) a certificate, dated the Closing Date, stating that (i) the
representations and warranties of ROI contained in this Agreement or any
Schedule are true and correct in all material respects on and as of the
Closing Date, (ii) ROI has performed in all material respects all
obligations required to be performed by it under this Agreement at or prior
to the Closing.
(4) an executed Escrow Agreement, the form of which is attached hereto
as Schedule B.
(5) Between the date of this Agreement and the Effective Time, no
adverse change shall have occurred in the business, operations or financial
condition of ROI that would affect its ability to consummate the
transactions contemplated by this Agreement.
4. APPROVALS.
(a) The Controlling Shareholders and S.A.F.E. have approved this Agreement
and the transactions contemplated herein. Prior to the Closing S.A.F.E. and the
S.A.F.E. Shareholders shall have taken any and all action required for the
Merger.
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(b) The ROI Board of Directors has approved this Agreement and the
transactions contemplated herein. The shareholders holding at least 65% of the
outstanding shares of common stock of ROI must approve the Merger prior to the
Closing. If such approval is not obtained on or before March 31, 2001, any party
to this Agreement may, at its sole option, terminate this Agreement by notifying
the other parties in writing of such termination. Upon such termination, each
party shall be responsible for its own costs and expenses related to this
Agreement and, except as expressly agreed to herein, no party shall have any
obligation hereunder.
5. REPRESENTATIONS AND WARRANTIES OF ROI. Except for the approvals
described in 4(b) hereof, ROI represents and warrants to the Controlling
Shareholders that the following representations and warranties are true and
correct in all material respects as of the Closing:
(a) ROI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware and has the corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it. Each of ROI and its subsidiaries, including the Subsidiary, is
duly qualified as a foreign corporation to do business and is in good standing
in each jurisdiction where the ownership and operation of its properties and
assets or the conduct of its business requires such qualification, except where
the failure to be so qualified or in good standing, when taken together with all
other such failures, would not prevent, materially delay or materially impair
the ability of ROI and the Subsidiary to consummate the transactions
contemplated by this Agreement.
(b) ROI has the requisite corporate power and authority to execute and
deliver this Agreement and the Employment Agreement and to consummate the
transactions contemplated hereby and thereby. Each of the Transaction Documents
to which ROI or the Subsidiary is a party has been duly executed and delivered
by such party and each constitutes a valid and binding obligation of ROI and the
Subsidiary, enforceable against them in accordance with its terms, except as
such enforceability may be limited by bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or other similar laws now or hereafter in
effect relating to creditors' rights and by general equitable principles
(regardless of whether enforceability is considered in a proceeding in equity or
at law). The Board of Directors of ROI and The Subsidiary have approved each
this Agreement and the transactions contemplated therein.
The execution and delivery of this Agreement and the Employment Agreement
by ROI and the consummation by ROI of the transactions contemplated herein and
therein have been duly authorized by ROI's Board of Directors and, except for
the approval of the ROI shareholders, no other corporate or other proceedings on
the part of ROI or the ROI shareholders are necessary to authorize this
Agreement and the Employment Agreement or for ROI to consummate the transactions
contemplated hereunder and thereunder. This Agreement has been duly and validly
executed and delivered by ROI and constitutes, and the Employment Agreement when
executed and delivered at Closing will constitute, a valid and binding agreement
of ROI, enforceable against ROI in accordance with their terms, except as
enforceability may be limited by creditors' rights, bankruptcy, insolvency and
general principles of equity.
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(c) Neither the execution, delivery or performance of this Agreement or the
Employment Agreement by ROI, nor the consummation by ROI of the transactions
contemplated hereunder or thereunder, will (i) conflict with or result in any
breach of any provisions of the Articles of Incorporation or Bylaws of ROI, (ii)
require a filing with, or a permit, authorization, consent or approval of, any
federal, state, local or foreign court, arbitral tribunal, administrative agency
or commission or other governmental or other regulatory authority or
administrative agency or commission, except for filings or approvals required
under applicable federal or state securities laws and the filing of the Articles
of Merger, (iii) result in a violation or breach of, or constitute (with or
without due notice or lapse of time or both) a default (or give rise to any
right of termination, cancellation or acceleration) under, or result in the
creation of any mortgage, pledge, security interest, encumbrance, lien, claim or
charge of any kind or right of others of whatever nature, on any property or
asset of ROI pursuant to any of the terms, conditions or provisions of any
contract, agreement, lease, intellectual property license, note, bond, mortgage,
indenture, license, or other instrument or obligation to which ROI is a party or
by which it is bound or (iv) to the best knowledge of ROI, violate any law,
order, writ, injunction, decree, statute, rule or regulation of any governmental
entity applicable to ROI or any of its properties or assets, except, in the case
of clauses (ii), (iii) and (iv), where failures to make such filing or obtain
such authorization, consent or approval would not have, or where such
violations, breaches or defaults or liens would not have, individually or in the
aggregate, a material adverse effect.
(d) To the best of ROI's knowledge, the representations contained in this
subsection (d) are complete and accurate. Any and all securities issued by ROI
have been issued in compliance with Federal and State securities laws. ROI has
filed with the Securities and Exchange Commission all of the documents ("ROI SEC
Documents") that it was required to file through the date of this Agreement. As
of their respective dates, the ROI SEC Documents did not contain any untrue
statements of material facts or omit to state material facts required to be
stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. As of their respective
dates, the ROI SEC Documents complied in all material respects with the
applicable requirements of the Securities Act of 1933 and the Securities
Exchange Act of 1934 and the rules and regulations promulgated under such
statutes. The financial statements contained in the ROI SEC Documents, together
with the notes thereto, have been prepared in accordance with generally accepted
accounting principles consistently followed throughout the periods indicated
(except as may be indicated in the notes thereto or, in the case of the
unaudited financial statements, as permitted by Form 10-Q), reflect all known
liabilities of ROI required to be stated therein, including all known contingent
liabilities as of the end of each period reflected therein, and present fairly
the financial condition of ROI at said date and the results of operations and
cash flows of ROI for the periods then ended.
(e) ROI has reserved $600,000.00 for use by S.A.F.E. during the first six
months after the Closing.
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(f) After the Closing, S.A.F.E. employees shall qualify for participation
in the ROI incentive stock option plan.
(g) The execution, delivery and performance of each of this Agreement and
by ROI and the Subsidiary do not, and the consummation by ROI and the Subsidiary
of the transactions contemplated herein will not, constitute or result in (a) a
breach or violation of, or a default under, ROI's or the Subsidiary's
certificate of incorporation and by-laws, (b) a breach or violation of or
default under, or the acceleration of any obligation pursuant to, any contracts
binding upon ROI or the Subsidiary or any of their subsidiaries or any law or
governmental or non-governmental permit or license to which ROI or any of its
subsidiaries is subject or (c) any change in the rights or obligations of any
party under any of the contracts specified in (b) above, except, in the case of
(b) or (c) above, for any breaches, violations, default, accelerations,
creations or changes that, individually or in the aggregate, are not reasonably
likely to prevent, materially burden or materially impair the ability of ROI and
the Subsidiary to consummate the transactions contemplated by this Agreement.
(h) Except as specified herein, no notices, reports or other filings are
required to be made by ROI and its subsidiaries with, nor are any consents,
registrations, approvals, permits or authorizations required to be obtained by
ROI and its subsidiaries from, any Governmental Entity, in connection with the
execution and delivery of these documents and the consummation by ROI and the
Subsidiary of the transactions contemplated herein, except those that the
failure to make or obtain are not, individually or in the aggregate, reasonably
likely to prevent, materially burden or materially impair the ability of ROI and
the Subsidiary to consummate the transactions contemplated by the Transaction
Documents.
(i) As of the Closing Date, ROI and the Subsidiary have access to and will
have sufficient funds to purchase the Company Stock and satisfy all of its
obligations under this Agreement and the transactions contemplated herein. ROI's
and the Subsidiary's obligations hereunder are not subject to any conditions
regarding ROI's or The Subsidiary's ability to obtain financing for the
consummation of the transactions contemplated herein.
(j) Except for (i) the filing of the Merger Filings, (ii) such filings,
consents, approvals as may be required under federal and state securities laws,
and (iii) such other consents, authorizations, filings, approvals and
registrations which, if not obtained or made, could be expected to have a
material adverse effect on ROI and its subsidiaries, taken as a whole, the
execution, delivery and performance of this Agreement to which ROI is a party do
not and will not: (a) conflict with the Certificate of Incorporation or Bylaws
of ROI; (b) violate any law or any rule or regulation of any governmental body
or administrative agency, or conflict with any judicial or administrative order
or decree relating to ROI or the ROI's assets, except for any such violations or
conflicts which would not, individually or in the aggregate, have a material
adverse effect on ROI and its subsidiaries, taken as a whole, or impair the
ability of ROI to consummate the transactions contemplated by this Agreement;
(c) constitute a breach or default under any instrument, contract or other
agreement to which the ROI is party to which it or any of its assets or
properties is bound or subject; (d) create any security interest, mortgage,
lien, claim, or
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encumbrance of any kind on any of the ROI's assets; or (e) require any consent,
notice to or filing with any governmental authority or administrative agency.
(k) ROI and the Subsidiary are acquiring the S.A.F.E. Common Stock solely
for the purpose of investment and not with a view to, or for sale in connection
with, any distribution thereof in violation of the Securities Act. ROI
acknowledges that the S.A.F.E. Common Stock is not registered under the
Securities Act or any applicable state securities law, and that such Common
Stock may not be sold or otherwise transferred except pursuant to the
registration provisions of the Securities Act or an applicable exemption
therefrom and pursuant to any applicable state and other securities laws.
(l) There are no claims, actions, suits or investigations pending, or to
the knowledge of ROI, threatened, against ROI that in the aggregate could have a
material adverse effect upon the transactions contemplated hereby or ROI and its
subsidiaries, taken as a whole.
(m) No representation, warranty or statement made by ROI in this Agreement
or the exhibits or schedules hereto, contains or will contain any untrue
statement of a material fact, or omits to state any material fact necessary, in
light of the circumstances in which they were made, to make the statements
contained herein or therein not misleading.
(n) ROI has not retained any broker, finder or agent, nor has any liability
or obligation, nor will it, or anyone on its behalf, incur any liability or
obligation, to pay any fees, commissions or similar payments to any broker,
finder or agent with respect to the transactions contemplated by this Agreement.
(o) Except as agreed herein and in the Escrow Agreement, the shares of ROI
Common Stock to be issued in connection with the Merger, when delivered
hereunder, will be validly issued, fully paid and nonassessable, and will be
free of any liens or encumbrances.
6. REPRESENTATIONS AND WARRANTIES OF S.A.F.E. AND THE CONTROLLING
SHAREHOLDERS.
S.A.F.E. and each of the Controlling Shareholders respectively (and not
jointly) represents and warrants to ROI that the following representations and
warranties pertaining to S.A.F.E. and each such individual Controlling
Shareholder are true and correct in all material respects as of the Closing:
(a) S.A.F.E. is a corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois and has the corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and to own and use the properties owned
and used by it. Complete and correct copies of S.A.F.E.'s charter documents and
all amendments thereof to date, certified by the Secretary of State of Illinois,
and the by-laws, as amended to date, certified by an officer of S.A.F.E. will be
delivered to ROI at the Closing.
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(b) S.A.F.E. and the Controlling Shareholders have the requisite power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated hereby. The execution and delivery of this Agreement
and the Employment Agreement and the consummation of the transactions
contemplated herein and therein have been duly authorized by S.A.F.E.'s Board of
Directors and the S.A.F.E. Shareholders and no other corporate or other
proceedings on the part of S.A.F.E. or the S.A.F.E. Shareholders are necessary
to authorize this Agreement and the Employment Agreement or to consummate the
transactions contemplated hereunder and thereunder. This Agreement has been duly
and validly executed and delivered by S.A.F.E. and the Controlling Shareholders
and constitutes a valid and binding agreement of S.A.F.E. and the Controlling
Shareholders, enforceable against S.A.F.E. and the Controlling Shareholders in
accordance with its terms, except as enforceability may be limited by creditors'
rights, bankruptcy, insolvency and general principles of equity.
(c) Neither the execution, delivery or performance of this Agreement or the
Employment Agreement, nor the consummation of the transactions contemplated
hereunder or thereunder, will (i) conflict with or result in any breach of any
provisions of the Articles of Incorporation or Bylaws of S.A.F.E., (ii) require
a filing with, or a permit, authorization, consent or approval of, any federal,
state, local or foreign court, arbitral tribunal, administrative agency or
commission or other governmental or other regulatory authority or administrative
agency or commission, except for filings or approvals required under applicable
federal or state securities laws and the filing of the Articles of Merger, (iii)
result in a violation or breach of, or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right of termination,
cancellation or acceleration) under, or result in the creation of any mortgage,
pledge, security interest, encumbrance, lien, claim or charge of any kind or
right of others of whatever nature, on any property or asset of S.A.F.E.
pursuant to any of the terms, conditions or provisions of any contract,
agreement, lease, intellectual property license, note, bond, mortgage,
indenture, license, or other instrument or obligation to which S.A.F.E. is a
party or by which it is bound or (iv) to the best knowledge of S.A.F.E., violate
any law, order, writ, injunction, decree, statute, rule or regulation of any
governmental entity applicable to ROI or any of its properties or assets,
except, in the case of clauses (ii), (iii) and (iv), where failures to make such
filing or obtain such authorization, consent or approval would not have, or
where such violations, breaches or defaults or liens would not have,
individually or in the aggregate, a material adverse effect.
(d) Prior to the Closing, S.A.F.E. shall provide ROI with a list of all
shareholders of S.A.F.E. containing the name, address, social security number,
and number of S.A.F.E. shares owned by each shareholder immediately prior to the
Closing (the "S.A.F.E. Shareholder List"). The S.A.F.E. Shareholder List will
contain a complete and accurate listing of all outstanding shares and other
securities of S.A.F.E. of any kind, whether debt or equity. There are no
outstanding options or warrants of any kind for the purchase of shares or any
other securities of S.A.F.E., whether debt or equity.
(e) S.A.F.E. and the S.A.F.E. Shareholders have the requisite authority and
capacity to perform the Merger.
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(f) The Controlling Shareholders are the owners of record of over 80% of
the S.A.F.E. Common Stock and are entitled to transfer such S.A.F.E. Common
Stock in accordance herewith.
(g) By virtue of acquiring the S.A.F.E. Common Stock hereunder, ROI shall
be entitled to any and all rights and privileges to which the S.A.F.E.
Shareholders are entitled by virtue of owning the S.A.F.E. Common Stock.
(h) Other than the S.A.F.E. Common Stock as shown on the S.A.F.E.
Shareholder List, each of the S.A.F.E. Shareholders owns no other shares of
common stock of S.A.F.E. and has not transferred or caused S.A.F.E. to issue any
shares of common stock of S.A.F.E. to anyone else.
(i) There is no material litigation pending or threatened against or
relating to the S.A.F.E. Shareholders, or any of them, that would affect the
S.A.F.E. Common Stock or the transaction contemplated by this Agreement.
(j) There is no effective order, decree or judgment of any court to which
the S.A.F.E. Shareholders, or any of them, are a party that would affect the
S.A.F.E. Common Stock or the transaction contemplated by this Agreement.
(k) The S.A.F.E. Shareholders have good title to the S.A.F.E. Common Stock
to be transferred pursuant to this Agreement; such S.A.F.E. Common Stock are
validly issued and outstanding, and are paid for in full; and each of the
S.A.F.E. Shareholders has full legal right, power and authority to sell, assign
and transfer the S.A.F.E. Common Stock to ROI pursuant to this Agreement.
(l) Schedule E, which is attached hereto and thereby made an integral part
hereof, contains the unaudited financial statements of S.A.F.E. for the fiscal
years ended December 31, 1999, and 2000. All such financial statements are
accurate and complete in all material respects. Except as disclosed on Schedule
E, there is no material litigation pending or threatened against S.A.F.E. and
there are no delinquent taxes of any kind. Schedule E-1, which is attached
hereto and thereby made an integral part hereof, contains a list of the
intellectual property of S.A.F.E. indicating whether or not each such item of
intellectual property is reflected on the Balance Sheet. Except as noted on said
Schedule E-1, S.A.F.E. is the owner of all such intellectual property and has
granted no rights of any kind related to the intellectual property to any other
party except for licenses granted in the ordinary course of business and said
licenses are listed on Schedule E-1. Schedule E-2, which is attached hereto and
thereby made an integral part hereof, contains a list of tangible assets of
S.A.F.E. whether or not such assets are reflected on the Balance Sheet. Except
as set forth in Schedule E-2, none of the personal property listed therein is
held under any lease, security agreement, conditional sales contract or other
title retention or security arrangement. Except as noted on Schedule E-2,
S.A.F.E. is the owner of all such assets and has granted no rights of any kind
related to the assets to any other party. Except as noted on the Schedules,
S.A.F.E. has good, valid and marketable title to all of its property and assets
(whether real, personal or mixed and whether tangible or intangible) free and
clear of all liens. S.A.F.E. does not own any real property.
11
(m) Schedule F attached hereto contains a correct and complete list of
every written contract, agreement, relationship or commitment, and every
material oral contract, commitment, agreement or relationship, to which the
Company is a party or by which the Company is bound (collectively, the "Material
Contracts"). True and complete copies of all Material Contracts have been
furnished to ROI. Except as set forth on Schedule F, (a) all of the Material
Contracts are in full force and effect, (b) S.A.F.E. is not in default, and no
event has occurred which with the giving of notice or the passage of time or
both would constitute a default by S.A.F.E., under any Material Contract or any
other obligation owed by S.A.F.E., and (c) to the knowledge of S.A.F.E. and the
S.A.F.E. Shareholders, no event has occurred which with the giving of notice or
the passage of time or both would constitute such a default by any other party
to any such Material Contract or obligation. S.A.F.E. does not have any material
debts, liabilities or obligations of any nature (whether accrued, absolute,
contingent, direct, indirect, perfected, inchoate, unliquidated or otherwise,
whether due or to become due), except (a) liabilities and obligations under
Material Contracts or other liabilities and obligations described on the
attached Schedule F, (b) liabilities and obligations included in the financial
statements on Schedule E, and (c) liabilities and obligations which have arisen
after December 31, 2000, in the ordinary course of business, consistent with
past custom and practice (none of which is a liability resulting from breach of
contract, environmental matters, breach of warranty tort, infringement, claims
or lawsuits).
(n) S.A.F.E. (i) has timely filed all Tax Returns (as hereinafter defined)
required to be filed by it for all periods ending on or prior to the Closing,
and such tax returns are true, correct and complete in all material respects,
(ii) has duly paid in full or made adequate provision for the payment of all
Taxes for all periods ending at or prior to the Closing (whether or not shown on
any Tax Return), and (iii) has not filed for an extension to file any Tax Return
not yet filed. No claim has been made by any authority in a jurisdiction where
S.A.F.E. does not file a Tax Return that S.A.F.E. is or may be subject to tax in
such jurisdiction. No waivers of statutes of limitation have been given by or
requested with respect to any Taxes of S.A.F.E. S.A.F.E. has not agreed to any
extension of time with respect to any Tax deficiency. The liabilities and
reserves for Taxes reflected in the S.A.F.E. Financial Statements are adequate
to cover all Taxes for all periods ending on or prior to December 31, 2000, and
there are no liens for Taxes upon any property or asset of S.A.F.E., except for
liens for Taxes not yet due. S.A.F.E. has withheld and paid all Taxes required
to have been withheld and paid in connection with amounts paid or owing to any
employee, independent contractor, creditor, shareholder, or other third party.
(o) Any and all securities issued by S.A.F.E. have been issued in
compliance with Federal and State securities laws. Any and all filings required
any governmental authority have been filed by S.A.F.E. on a timely basis and
such filings are true and correct in all material respects.
(p) S.A.F.E. does not have, directly or indirectly, any ownership interest
in any other entity.
(q) Since December 31, 2000, S.A.F.E. has conducted its business only in
the ordinary course of business consistent with past custom and practice, and
has incurred no liabilities other
12
than in the ordinary course of business consistent with past custom and practice
and there has been no material adverse change in the assets, condition
(financial or otherwise), operating results, employee or customer relations,
business activities or business prospects of S.A.F.E.. Without limitation of the
foregoing and except as described herein, since December 31, 2000, and through
the Closing Date, S.A.F.E. has not and will not have:
(i) sold, assigned or transferred any of the assets of its business or
mortgaged, pledged or subjected them to any Lien, charge or other
restriction;
(ii) sold, assigned, transferred, abandoned or permitted to lapse any
licenses or permits which, individually or in the aggregate, are material
to its business or any portion thereof, or any of the intellectual property
or other intangible assets, or disclosed any material proprietary
confidential information to any person, granted any license or sublicense
of any rights under or with respect to any intellectual property;
(iii) made or granted any increase in, or amended or terminated, any
existing plan, program, policy or arrangement;
(iv) conducted its cash management customs and practices (including
the timing of collection of receivables and payment of payables and other
current liabilities) and maintained its books and records other than in the
usual and ordinary course of business consistent with past custom and
practice;
(v) made any loans or advances to, or guarantees for the benefit of,
or entered into any transaction with any employee, officer or director;
(vi) suffered any material loss, damage, destruction or casualty loss
to its business or waived any rights of material value, whether or not
covered by insurance and whether or not in the ordinary course of business;
(vii) declared, set aside or paid any dividend or distribution of cash
or other property to any stockholder or purchased, redeemed or otherwise
acquired any shares of its capital stock, or made any other payments to any
stockholder;
(viii) amended or authorized the amendment of its charter documents or
by-laws;
(ix) made any capital expenditures or commitments therefor in excess
of $10,000;
(x) paid any bonuses or compensation other than regular salary
payments, or increased the salaries, or paid any debt, to any stockholder,
director, officer, or employee, or entered into any employment, severance,
or similar contract with any director, officer, or employee;
13
(x) changed its authorized or issued capital stock; granted any stock
option or right to purchase shares of its capital stock; issued any
security convertible into such capital stock; granted any registration
rights; purchased, redeemed retired, or otherwise acquired any shares of
any such capital stock; or declared or paid any dividend or other
distribution or payment in respect of shares of capital stock;
(xi) cancelled or waived any claims or rights with a value in excess
of $10,000;
(xii) materially changed its accounting methods;
(xiii) entered into any other material transaction, other than in the
ordinary course of business consistent with past custom and practice; or
(xiv) committed to any of the foregoing.
(r) S.A.F.E. has not at any time made or committed to make any payments for
illegal political contributions or made any bribes, kickback payments or other
illegal payments.
(s) Schedule G attached hereto contains a correct and complete list setting
forth (a) the name, job title, accrued vacation and original date of employment
for each employee of S.A.F.E., and (b) the names for all independent contractors
who render services on a regular basis to S.A.F.E. No employee or independent
contractor of S.A.F.E. has received any bonus or increase in compensation and
there has been no general increase in the compensation or rate of compensation
payable to any employees or independent contractors of S.A.F.E. since December
31, 2000, nor has there been any change in any Employee Benefit Plan or any
promise by S.A.F.E. to employees or independent contractors orally or in writing
of any bonus or increase in compensation or a general increase or change in any
Employee Benefit Plan, whether or not legally binding. S.A.F.E. is not a party
to or obligated with respect to any (a) outstanding contracts with current or
former employees, agents, consultants, advisers, salesmen, sales
representatives, distributors, sales agents or dealers, or (b) collective
bargaining agreements or contracts with any labor union or other representative
of employees or any employee benefits provided for by any such agreement. No
strike, union organizational activity, allegation, charge or complaint of
employment discrimination or other similar occurrence has occurred during
S.A.F.E.'s operation of its business, or is pending or, to the knowledge of
S.A.F.E. and the S.A.F.E. Shareholders, threatened against S.A.F.E.; nor does
S.A.F.E. or the S.A.F.E. Shareholders know any basis for any such allegation,
charge, or complaint. S.A.F.E. has materially complied with all applicable legal
requirements relating to the employment of labor, including provisions thereof
relating to wages, hours, equal opportunity, collective bargaining and the
withholding and payment of social security, unemployment and other Taxes. There
are no administrative charges or court complaints pending or, to the knowledge
of
14
S.A.F.E. and the S.A.F.E. Shareholders, threatened against S.A.F.E. before the
U.S. Equal Employment Opportunity Commission or any Governmental Entity
concerning alleged employment discrimination or any other matters relating to
the employment of labor; there is no unfair labor practice charge or complaint
relating to the business of S.A.F.E. pending or, to the knowledge of Company and
the S.A.F.E. Shareholders, threatened against S.A.F.E. before the National Labor
Relations Board or any similar state or local body; and, to the knowledge of
S.A.F.E. and the S.A.F.E. Shareholders, no such charges or complaints have been
brought against S.A.F.E..
(t) Schedule H is a complete and accurate list of the company names,
contact names, addresses, phone and facsimile numbers of all customers of
S.A.F.E. who have purchased services and/or goods from S.A.F.E. since inception
and all of the sales prospects of S.A.F.E., and S.A.F.E. will deliver to
Purchaser within ten (10) days after the Closing an updated list of all
customers and prospects with any and all information S.A.F.E. has regarding such
customers and prospects. S.A.F.E. has not received any written or, to the
knowledge of S.A.F.E. and S.A.F.E. Shareholders, oral notice, and S.A.F.E. does
not have any knowledge, that any customer of S.A.F.E. intends to discontinue or
substantially diminish or change its relationship with S.A.F.E. on account of
the transactions contemplated herein or otherwise.
(u) None of S.A.F.E., the S.A.F.E. Shareholders, or any of their affiliates
has employed or used the services of any finder or broker in connection with the
transactions contemplated herein.
7. CONDITIONS PRECEDENT TO CLOSING. The parties covenant and agree that the
Closing of the Merger shall be subject to the fulfillment of each of the
following covenants and agreements, each of which constitutes a condition
precedent to the obligations of the parties hereunder:
(a) The shareholders holding at least 65% of the outstanding shares of
common stock of ROI shall have approved the Merger.
(b) S.A.F.E. shall make available to ROI any and all data, records, and
other information as ROI, in its sole discretion, deems necessary to perform due
diligence prior to the Closing and said Closing shall be contingent upon ROI's
approval based on the results of said due diligence.
(c) At the Closing, Xxxxxxxxx shall enter into the Employment Agreement
with ROI.
15
(d) At the Closing, the S.A.F.E. Shareholders and ROI shall enter into the
Escrow Agreement.
8. Legend on Shares; Piggyback Registration. Each certificate for shares of
ROI Common Stock issued hereunder, unless at the time of exercise such shares
are registered under the Act, shall bear the following legend (and any
additional legend required by the any national securities exchanges upon which
such shares may, at the time of such exercise, be listed or under applicable
securities laws):
The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"), or the
securities laws of any state. They may not be sold, transferred, assigned,
pledged, hypothecated, encumbered, or otherwise disposed of in the absence
of registration under said Act and all other applicable securities laws,
unless an exemption from registration is available.
The S.A.F.E. Shareholders agree to hold the shares of ROI Common Stock for a
minimum of two (2) years after the Closing. Except for the foregoing minimum
holding period, the S.A.F.E. Shareholders shall have unlimited piggyback
registration rights for any shares of ROI Common Stock issued hereunder. If,
after the foregoing minimum holding period, ROI at any time proposes for any
reason to register any of its securities under the Securities Act of 1933, as
amended (the "Act"), it shall each such time promptly give written notice to the
S.A.F.E. Shareholders of its intention to do so, and upon the written request,
given within thirty (30) days after receipt of any such notice, of any of the
S.A.F.E. Shareholders to register any shares of ROI Common Stock held by any of
them, ROI shall cause all such shares to be registered under the Act, all to the
extent requisite to permit the sale or other disposition by any of the S.A.F.E.
Shareholders of the shares respectively held by them so registered. ROI, at its
sole expense, shall take all actions required and prepare and file any and all
documents required under the Act or any other securities or "blue sky" laws of
any jurisdictions reasonably requested by the S.A.F.E. Shareholders or by the
Securities and Exchange Commission or any other regulatory agency.
9. ASSIGNMENT. Except as permitted herein, none of the parties to this
Agreement may assign its respective rights and obligations hereunder without the
prior written consent of the other parties hereto.
10. TERMINOLOGY AND SECTION HEADINGS. All personal pronouns in this
Agreement, whether used in the masculine, feminine or neuter gender shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Paragraphs are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
11. BINDING EFFECT. Subject to the restrictions on assignments set forth in
this Agreement, this Agreement and the rights of the parties hereunder shall
inure to the benefit of and be binding upon the parties and their respective
legal representatives, successors and assigns. Whenever in this Agreement a
reference is made to one of the parties, such reference shall be deemed to
include a reference to the legal representatives, successors and assigns of such
party.
16
12. SEVERABILITY. This Agreement shall be governed by and construed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
13. INTERPRETATION. In construing the terms and provisions of this
Agreement, it is understood and agreed that no court or other interpretive body
shall apply a presumption that the terms of this Agreement shall be more
strictly or particularly construed against one party hereto by reason of the
fact that said party, either directly or through its agents, prepared this
Agreement, it being understood and agreed that all parties, either directly or
through their agents, have fully participated in the preparation hereof.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, excluding any conflict of law
provisions. Any litigation to enforce or interpret this Agreement shall take
place in the state courts of Xxxx County, Georgia, or the federal courts for the
Northern District of Georgia.
15. ENTIRE AGREEMENT. Except as specifically provided in this Agreement to
the contrary, this Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof, and no modification hereof
shall be effective unless made a supplemental agreement in writing executed by
all of the parties hereto.
17
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in multiple counterparts, each of which shall be deemed an original,
with their respective seals affixed thereto all as of the date and year first
above written.
RETURN ON INVESTMENT CORPORATION
Attest: /s/ Xxxx Xxxxx By: /s/
----------------------------- ----------------------------------
Its: Secretary Its: President
----------------------------- ---------------------------------
(CORPORATE SEAL]
S.A.F.E. ACQUISITION CORPORATION
Attest: /s/ Xxxx Xxxxx By: /s/
----------------------------- ----------------------------------
Its: Secretary Its: President
----------------------------- ---------------------------------
[CORPORATE SEAL]
S.A.F.E. SYSTEMS, INC.
Attest: /s/ By: /s/
----------------------------- ----------------------------------
Its: Secretary Its: CEO
----------------------------- ---------------------------------
[CORPORATE SEAL]
CONTROLLING SHAREHOLDERS:
/s/ XXXXXX XXXXXXXXX (SEAL)
--------------------------------------
XXXXXX XXXXXXXXX
/s/ GORD X. XXXXXXX (SEAL)
--------------------------------------
GORD X. XXXXXXX
/s/ XXXXXXX X. XXXXXX (SEAL)
--------------------------------------
XXXXXXX X. XXXXXX
/s/ XXXX X. XXXXXXXXXXXXXX (SEAL)
--------------------------------------
XXXX X. XXXXXXXXXXXXXX
18
EMPLOYMENT AGREEMENT
--------------------
THIS EMPLOYMENT AGREEMENT ("AGREEMENT") is made and entered into as of the
1st day of February, 2001, by and between RETURN ON INVESTMENT CORPORATION, a
Delaware corporation ("CORPORATION"), and XXXXXX XXXXXXXXX, an individual
resident of Illinois ("EMPLOYEE").
W I T N E S S E T H:
--------------------
WHEREAS, the Corporation desires to secure the benefits of the background,
experience, ability and expertise of Employee and Employee desires to be
employed by the Corporation on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth in this Agreement, the parties hereto agree as follows:
1. DEFINITIONS.
A. AFFILIATE means any company, corporation, or business entity which
directly (or indirectly through one or more intermediaries) controls, is
controlled by, or is under common control with the Corporation.
B. BOARD OF DIRECTORS means the board of directors of the Corporation
unless otherwise specified.
C. BUSINESS shall mean the enterprise operated by Corporation which
develops, implements, and markets software programs and services that facilitate
the processing of electronic transactions and the connection of real-time
devices, data equipment, and computer systems.
D. COMPETE shall mean, with respect to the Corporation, without
limitation: (i) calling on, taking away or accepting as a client or customer, or
attempting any of the foregoing, any individual, partnership, corporation,
association or other business entity, which was a client or customer of
Corporation during the three (3) year period immediately preceding the date
hereof; (ii) entering into or attempting to enter into any business
substantially similar to or competing in any way with the Business of the
Corporation, either alone or in conjunction with any other individual,
partnership, corporation or association.
E. COMPETING BUSINESS shall mean, any person (including Employee),
concern or entity which is engaged in or conducts a business, in the United
States or any other country in which Corporation has done business with, that is
involved in the development and/or marketing of the Products and also any
services which are the same as or similar to those offered by Corporation or
under development by Corporation at the time of the execution of this
1
Agreement. Notwithstanding the foregoing, Employee may own up to two (2%)
percent of any publicly traded company that would otherwise be considered a
Competing Business.
F. CORPORATION'S POLICIES AND PROCEDURES means the written policies
and procedures of the corporation as adopted and amended from time to time.
G. DIRECTLY OR INDIRECTLY shall mean, in modification of the word
"compete," to (i) act as an agent, representative, consultant, officer,
director, independent contractor or employee of any entity or enterprise that
may compete with the Business of Corporation; (ii) participate in any such
competing entity or enterprise as an owner, partner, limited partner, joint
venturer, creditor or stockholder (but only if such stockholder owns five
percent (5%) or more of the stock of such entity or enterprise); and (iii)
communicate to any such competing entity or enterprise Trade Secret information,
as defined below.
H. DUTIES means the Duties shown on Schedule A, which is attached to
this Agreement and thereby made an integral part hereof.
I. EFFECTIVE DATE means the Effective Date shown on Schedule A.
J. PRODUCTS shall mean the software and services described on Schedule
B attached to this Agreement, including any derivative products, component parts
and source codes used in the development of the software or to deliver the
services.
K. SOLICIT shall mean hiring, soliciting, taking away or attempting
any of the foregoing with respect to any employee of Corporation, whether on its
own behalf or on behalf of any other person or entity, or engaging in or
participating in the solicitation of any customer of the Corporation, or any
prospect solicited by Corporation, for the sale of the Products or services in
competition with the Business conducted by Corporation.
L. TERM means the period of time commencing with the Effective Date
and continuing for a period of three (3) years, unless earlier terminated or
extended as provided herein.
M. TERMINATION WITH CAUSE means the termination of this Agreement and
the employment relationship of Employee with the Corporation for good cause,
which means only the following: (i) willful dishonesty by Employee towards or
deliberate injury or deliberate attempted injury by Employee to the Corporation,
(ii) commission of a felony or other act involving moral turpitude which
adversely and materially affects the Corporation, (iii) willful failure or
refusal to perform the Duties or implement a directive from the Board of
Directors remaining uncured for a period of two (2) weeks after receipt of
written notice specifying such failure, (iv) disclosure of Trade Secrets in
violation of the terms of this Agreement (v) a disability of Employee,
including, but not limited to, drug or alcohol abuse, which prevents Employee
from performing the Duties for an uninterrupted period of three (3) consecutive
months, or (iv) death of Employee.
2
N. TRADE SECRETS shall mean items of confidential information about
the Business or the Products, which includes, but is not limited to, the
following categories of information relating to the design, development and
production of the Products, all of which Seller agrees constitute Trade Secrets
of the Business within the ambit of the Georgia Trade Secrets Act of 1990
(collectively, the "TRADE SECRETS"):
(i) Customer information, such as any compilation of past,
existing or prospective customers, any proposals or agreements, the status of
customers' accounts or credit, or related information about actual or
prospective customers. Proposals for, bids for, or contracts with clients, joint
venturers, customers, suppliers, designated agents, designated independent
contractors, designated consultants, employees, or other persons or entities
with whom Academia conducts any business;
(ii) Financial information, such as earnings or projected
earnings, assets, debts, prices, pricing structure, volumes of purchases or
sales or other financial data, whether relating to the Business generally, or to
particular projects, products, services, geographic areas, or time periods;
(iii) Supply and service information, such as goods and services,
suppliers' names or addresses, terms of supply or service contracts, or of
particular transactions, or related information about potential suppliers, to
the extent that such information is not generally known to the public, and to
the extent that the combination of suppliers or use of a particular supplier,
though generally known or available, yields advantages, the details of which are
not generally known;
(iv) Marketing information, such as details about ongoing or
proposed marketing programs or agreements, customer lists, addresses, telephone
numbers and personnel contacts; sales forecasts, results of marketing efforts,
and information about impending transactions;
(v) Personnel information, such as employees' personal or medical
histories, compensation or other terms of employment, actual or proposed
promotions, hiring, resignations, disciplinary actions, terminations or reasons
therefore, training methods, performance, or other employee information;
(vi) Research and development information, including any and all
information related to the Products, such as inventions, innovations and other
proprietary information related to the manufacture of technologies facilitating
the connection of real-time devices, data equipment and other computer systems,
whether or not these technologies have been patented, copyrighted or
trademarked, technological and computer information, including discs, files,
data base files, tapes or programs, scientific research, memoranda, plans,
notes, records, surveys, reports, computations, calculations, renderings,
prototypes, models, tests or lab
3
data, sketches, plans, drawings, designs, and other confidential research and
development information;
(vii) Technological processes, applications and innovations
utilized in the design and construction of the Products and their component
parts, whether or not these processes have been patented, copyrighted or
trademarked, including, but not limited to the configuration, production or
design of software, computer source codes, computer discs, files, data base
files, tapes or programs, and the fabrication of the software medium, including
installation or assembly processes, manufacturing procedures or techniques,
material and process specifications, mechanical processes, field processes and
equipment utilization; and
(viii) Product Design specifications including software
configuration or design, computer programs, database files, drawings, models,
prototypes, reports, descriptions of functional specifications, computations,
calculations, working papers, documents, instruments, or any other materials
related to the design, development or improvement of the Product, including
alternative designs not utilized in the Products.
O. VOLUNTARY TERMINATION means unilateral termination by Employee of
her employment with the Corporation prior to the end of the Term and in the
absence of a material breach by the Corporation of the terms of this Agreement.
2. EMPLOYMENT. During the Term, and any renewal thereof, the Corporation
agrees to employ Employee as a full-time employee of the Corporation to perform
the Duties. Employee agrees to diligently and faithfully perform the Duties and
shall: (i) devote all of her time, energy and skill during regular business
hours to the performance of the Duties (reasonable vacations, up to two (2)
weeks annually, and reasonable absences due to illness excepted), and faithfully
and industriously perform the Duties; (ii) diligently follow and implement all
management policies and decisions communicated to her; and (iii) timely prepare
and forward all reports and accountings as may be requested of Employee. The
Corporation, at its sole option and expense, may purchase life insurance on
Employee with the Corporation as beneficiary, while Employee is employed by the
Corporation.
3. COMPENSATION AND BENEFITS. The corporation shall compensate Employee and
provide the benefits as shown on Schedule A.
4. NONCOMPETITION. Employee covenants and agrees that during Employee's
employment and for a period of one (1) year after any termination of employment
for any reason, provided that the Corporation is not in material breach of the
terms of this Agreement, Employee shall not directly or indirectly, actively or
passively, individually or as an employee of any firm, association, partnership
or corporation:
(i) Engage in the business of operating as a developer, consultant or
supplier of software programs that compete with the Products or provide any
other products or services to Competing Businesses, which are substantially
similar to the Business of the Corporation or services provided by the Employee
to or on behalf of the Corporation, and which
4
are competitive with the Business of the Corporation, within the geographic
territory in which the Corporation does business; (ii) Solicit or attempt to
divert or appropriate to a competing Business, any customers of the Corporation
with respect to whom the Employee had contact concerning Business matters of the
Corporation while employed by the Corporation; or
(iii) Solicit or attempt to divert or appropriate to a competing
Business, any customers of the Corporation or potential customers with whom the
Corporation had direct and substantive contact concerning Business matters of
the Corporation while the Employee was employed by the Corporation.
5. NONSOLICITATION OF EMPLOYEES AND CUSTOMERS. Employee covenants and
agrees that during employee's employment and for a period of one (1) year after
any termination of employment for any reason, and regardless of Employee's
capacity (whether as employee, partner, officer, director or stockholder or
otherwise) with respect to any person, firm, association, partnership or
corporation, provided that the Corporation is not in material breach of the
terms of this Agreement, Employee agrees not to hire, employ, recruit, attempt
to employ or hire, or assist others in recruiting or hiring, any person who is
or was an employee of Corporation during the time Employee was an employee of
the Corporation, in an attempt to have such person work in any other firm,
association, partnership, corporation or business engaged in any business
similar to the business of the Corporation. It is the intention of the parties
that this restriction against solicitation relate only to those geographic areas
where the Corporation conducted its Business. The parties further acknowledge
and agree that the Corporation has conducted its Business throughout the United
States. Thus, it is the intention of the parties that the territorial
restriction in this nonsolicitation provision relate to the United States.
6. TRADE SECRETS.
A. Employee acknowledges that he or she has had the opportunity to
inspect, gain knowledge of and learn about certain Trade Secrets, both tangible
and intangible, of the Business, which Trade Secrets may include, without
limitation, patents, copyrights, marks, unpatented research and development,
customer and supplier information, financial information, marketing information,
books of account, contract forms, computer discs, files and programs, and
similar assets. Employee acknowledges that during his or her association with
the Business, he or she has acquired Trade Secrets, including research and
development, design and manufacturing processes related to software which
facilitates electronic transaction processing and the connection of real-time
devices, data equipment and computer systems. Employee acknowledges and agrees
that he or she has no right or proprietary interest in such property or in the
Products, which are specifically defined herein.
B. Employee acknowledges and agrees that these Trade Secrets are an
essential part of the Business; are regarded by the Corporation as secret,
confidential, proprietary, unique, and valuable; were acquired or developed to
be used in the Corporation at great cost and
5
over a long period of time; derive economic value, actual or potential, for not
being generally known to, and not being readily ascertainable by proper means
by, other persons who can obtain economic value from disclosure or use of such
items, and that the disclosure of any of these Trade Secrets to anyone other
than the Corporation's designated managers, designated agents, designated
independent contractors, designated consultants, licensees, or authorized
employees will cause the Corporation irreparable financial injury and harm.
Similarly, Employee's use of any Trade Secrets in the design or manufacture of
similar products, including but not limited to products utilizing software
facilitating electronic payment processing and the connection of real-time
devices, data equipment and computer systems, will cause the Corporation
irreparable financial injury and harm.
C. Employee shall hold the Trade Secrets in strict confidence and
shall not use, reveal, disclose, or divulge the Trade Secrets, directly or
indirectly, to any person, firm, company, partnership, agency, corporation,
limited liability company, or other entity (including a parent, subsidiary or
affiliate of any other such entity), a joint venturer, officer, director,
employee, agent, consultant, independent contractor or other representative
thereof, or any other individual or entity whatsoever, whether governmental or
private, or whether provided prior to or subsequent to the execution of the
Contract and this Agreement. Employee's obligation to protect the
confidentiality of the Trade Secrets and all other components of the Products,
and Employee's obligation to refrain from using the Trade Secrets and all other
components of the Products shall survive the termination of the Agreement. In
the event of a breach or threatened breach by Seller of any provision of this
Agreement, then the Business shall be entitled to the remedies set out in
Section 10 of this Agreement.
D. Corporation and Employee consider their relationship to be one of
utmost confidence with respect to all Trade Secrets. Therefore, upon the
execution of this Agreement, Employee shall not publish, divulge or use in any
way, commercially or otherwise, directly or indirectly, any information relating
to the Trade Secrets of that belong to Corporation, its agents or affiliates, or
Trade Secrets or any confidential information conveyed to Employee prior to his
or her termination. Except as provided herein, Employee shall hold the Trade
Secrets in confidence and shall not use, reveal, disclose, or divulge, directly
or indirectly, to any person, firm, company, partnership, agency, corporation,
limited liability company, or other entity, whether governmental or private, the
Trade Secrets, whether provided prior to or subsequent to the execution of this
Agreement. Employee's obligation to protect the confidentiality of the Trade
Secrets received hereunder shall survive the termination of this Agreement and
any subsequent contract or agreement between the parties, unless Employee is
specifically released therefrom by Corporation in writing.
Notwithstanding anything to the contrary contained herein, the Employee shall
have no obligation to preserve the confidentiality of any information which (1)
was previously known to the Employee free of any obligation to keep it
confidential; (2) is disclosed to the Employee by the Corporation without
restriction; or (3) is or becomes publicly available or known in the public
domain by means of authorized disclosures by the Corporation or by independent
development or disclosure by other parties.
6
E. The parties acknowledge and agree that the Products and all Trade
Secrets are the sole and exclusive property of Corporation. The fact that
Employee may have been provided access to certain Trade Secrets, technological
processes, designs or innovations, shall give Employee no ownership interest
therein whatsoever.
F. It is the intention of the parties that the restrictions against
the misappropriation, use or disclosure of the Trade Secrets set out in this
Agreement shall be of unlimited duration. In the event that a Georgia court of
competent jurisdiction finds that the restrictions set out in this Agreement are
unreasonable because they are of unlimited duration, then the parties shall
agree that there will be a fifteen (15) year limitation on the restrictions
against misappropriation, use or disclosure of the Trade Secrets disclosed and
conveyed to Employee.
7. RENEWAL AND TERMINATION. This Agreement may be renewed for additional
one (1) year terms on the third anniversary of the Effective Date and on each
anniversary thereafter, by Employee and the Corporation. Prior to the end of the
Term, the Corporation may terminate this Agreement only if such termination is a
Termination With Cause, and such termination shall be effective only upon
receipt by Employee of written notice from the Board of Directors of the
Corporation. Provided that the Corporation is not in material breach of the
terms of this Agreement, Employee may not terminate this Agreement during the
first three (3) years of the Term. Thereafter, Employee may terminate this
Agreement upon the occurrence of: (i) Voluntary Termination, provided Employee
shall give the Corporation ninety (90) days prior written notice thereof; or
(ii) a material breach by the Corporation of the terms of this Agreement. Upon
any termination of this Agreement, the parties agree that the Corporation shall
immediately pay Employee any and all compensation due Employee. Except as
provided herein, upon the termination of Employee's employment hereunder, the
Corporation shall have no further obligation to Employee with respect to this
Agreement.
8. NOTICES. All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given and
received immediately upon personal delivery or delivery by courier, or if mailed
by United States Certified or Registered Mail, postage prepaid on the date of
its signed report by the recipient;
If to Employee: Xxxxxx Xxxxxxxxx
43W107 Xxxxxxxx
Xxxxx, XX 00000
If to Corporation: Return On Investment Corporation
0000 Xxxxxxx Xxxxx Xxxx. Xxxxx 000
Xxxxxxxx, XX 00000
Attn: President
7
or at such address as may be furnished in writing from time to time by any party
hereto to the other party.
9. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia, excluding any conflict of law
provisions. Any litigation to enforce or interpret this Agreement shall take
place in the state courts of Xxxx County, Georgia, or the federal courts for the
Northern District of Georgia.
10. CERTAIN COVENANTS. Employee acknowledges that a breach by him or her of
any of the covenants provided in Sections 4, 5, or 6 hereof will result in
irreparable and continuing damage to the Corporation and any breach or
threatened breach of any of the covenants provided in Sections 4, 5, or 6 hereof
shall be subject to specific performance by temporary as well as permanent
injunction or any other equitable remedies of any court of competent
jurisdiction. In the event a court of competent jurisdiction determines that
Employee has breached any of the foregoing covenants contained in Sections 4, 5,
or 6 hereof, Employee shall pay all costs of enforcement of the foregoing
covenants including, but not limited to, court costs and reasonable attorney's
fees. The parties agree that: (i) the covenants and agreements of Employee
contained in Sections 4, 5, and 6 hereof are reasonable necessary to protect the
interests of the Corporation in whose favor said covenants and agreements are
imposed in light of the nature of the Corporation's business and the
professional involvement of Employee in such business, (ii) the restrictions
imposed by Sections 4, 5, and 6 hereof are not greater than are necessary for
the protection of the Corporation in light of the substantial harm that the
Corporation will suffer should Employee breach any of the provisions of said
covenants or agreements, (iii) the covenants and agreements of Employee
contained in Sections 4, 5, and 6 hereof are material inducements for the
Corporation to hire Employee, (iv) the period of restriction and geographical
area of restriction contained in Sections 4 and 5 hereof are fair and reasonable
in that they are reasonably required for the protection of the Corporation, and
(v) the nature, kind and character of the activities Employee is prohibited to
engage in are reasonable and necessary to protect the Corporation in that the
Corporation will introduce Employee to its customers, referral sources, supplier
relationships and other important aspects of its business. The covenants and
agreements on the part of Employee contained in Sections 4, 5, and 6 hereof
shall be construed as agreements independent of any other agreement between
Employee and the Corporation. The existence of any claim or cause of action of
Employee against the Corporation, whether predicated on this Agreement or
otherwise, shall not constitute a defense to the enforcement by the Corporation
of each of such covenants and agreements or otherwise affect the remedies to
which the Corporation is entitled hereunder. The provisions of Sections 4, 5,
and 6 hereof shall survive the expiration or sooner termination of this
Agreement for any reason.
11. SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the other provisions hereof and the Agreement
shall be construed in all respects as if such invalid or unenforceable
provisions were omitted. Furthermore, if the fulfillment of any provision hereof
at the time performance of such provision shall be due, shall presently involve
transcending the limit of validity prescribed by any applicable law, then IPSO
FACTO, the obligation to be fulfilled shall be reduced to the limit of such
validity and if any clause
8
or provision herein contained operates or would prospectively operate to
invalidate this Agreement, in whole or in part, then such clause or provision
only shall be held for naught, as though not herein contained, and the remainder
of this Agreement shall remain operative and in full force and effect.
12. MODIFICATION. No change, amendment, or modification of this Agreement
shall be valid unless made in writing and signed by all of the parties hereto.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be binding on and inure to
the benefit of the parties and their respective heirs, legal representatives,
administrators, successors and assigns.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to this subject matter and supersedes all prior
understandings, agreements, and correspondence, whether oral or written, related
to this subject matter.
IN WITNESS WHEREOF, the Corporation has caused this Agreement to be
executed by its duly authorized representatives and Employee has executed this
Agreement as set forth below.
RETURN ON INVESTMENT CORPORATION
By: ____________________________________
Its: _______________
EMPLOYEE: XXXXXX XXXXXXXX
__________________________________[SEAL]
9
SCHEDULE A
1. DUTIES mean the management and direction of the technical operations of
the Corporation's subsidiary known as S.A.F.E. Systems ("Subsidiary") and the
performance of such additional duties and responsibilities as may be designated
by the President of the Corporation, and shall serve in such other capacities
with the Corporation as may be designated by the Board of Directors.
2. EFFECTIVE DATE shall mean February 1, 2001.
3. COMPENSATION. The Corporation shall pay, and Employee agrees to accept,
as compensation for performance of the Duties hereunder during the Term, the
following:
A. BASE SALARY. Employee shall be paid a Base Salary of at least Eight
Thousand Four Hundred Sixteen and 66/100 ($8,416.66) Dollars per month, to be
paid in equal semi-monthly installments.
B. BONUSES. Employee shall receive bonuses as determined by the
Corporation in its sole discretion. Such bonuses shall be paid in accordance
with the Corporation's Policies and Procedures.
C. DEDUCTIONS. The Corporation may deduct from Employee's compensation
all amounts required to be deducted and withheld in accordance with applicable
federal and state income, FICA and other withholding tax requirements.
4. BENEFITS. In addition to the compensation received by Employee as
specified above, Employee shall receive company paid health and dental insurance
and all benefits generally available to employees of the Corporation or its
Subsidiary.
5. EXPENSE REIMBURSEMENT. Employee shall be reimbursed in accordance with
the Corporation's Policies and Procedures for all reasonable and necessary
expenses incurred by her in connection with the performance of her duties of
employment hereunder; provided Employee shall, as a condition of reimbursement,
submit verification of the nature and amount of such expenses in accordance with
said reimbursement policies.
6. REPAYMENT OF LOANS. Within thirty (30) days after the Effective Date,
the Subsidiary shall deliver a check in the amount of $94,000.00 payable to
Employee as payment in full for loans made by Employee to the Subsidiary prior
to the Effective Date.
SCHEDULE B
PRODUCTS
The Products shall include those items listed on the attached sheets.
[LOGO] END USER PRICES AND TERMS
For more information call 000-000-0000
XXX.XX000.XX
E-TRANSACTION MIDDLEWARE(SM)
AS/400 CREDIT CARD (ROI CARD & POS-PORT) - FOR ROI JAVACARDTM SEE APPLICABLE PRICE LIST
-------------------------------------------------------------------------------------------------
Series-Item Description License Fee
-------------------------------------------------------------------------------------------------
200-003 ROI Card(TM) software license - single AS/400 system - 1 dial-up port - $15,990
includes 1 Merchant ID and 1 authorization network (choose 1 from list
of supported networks)
-------------------------------------------------------------------------------------------------
200-004 ROI UltraCard(TM) software license - includes ROI Card and the $25,990
processing of financial transactions through ROI Sockets for up to
8 concurrent users (expandable at additional cost)
-------------------------------------------------------------------------------------------------
200-008 8 Additional Connections software license - adds up to 8 additional $995 per
concurrent users through ROI Sockets for ROI UltraCard financial 8 connections
transactions on same AS/400
-------------------------------------------------------------------------------------------------
300-001 AS/400 Support for POS-port(TM) software license for VisaNet $5,995
authorization network ONLY - 1 dial-up port - includes 1 Merchant ID -
NO upgrade or trade in permitted
-------------------------------------------------------------------------------------------------
300-002 AS/400 Support for POS-port(TM) software license for VisaNet $8,995
authorization network - upgradable version - 1 dial-up port - includes
1 Merchant ID - continuous ASUS allows trade in
-------------------------------------------------------------------------------------------------
300-004 POS-port Amex Module software license - 1 dial-up port - requires $2,495
300-001 or 300-002 - Adds ability to handle American Express Corporate
Cards and settle directly with Amex
-------------------------------------------------------------------------------------------------
AS/400 CONNECTIVITY (ROI SESSIONS PLUS, ROI SOCKETS, AND ROI TCP/REMOTE)
-------------------------------------------------------------------------------------------------
Series-Item Description License Fee
-------------------------------------------------------------------------------------------------
100-001 ROI Sessions Plus(TM) software license for serial connectivity to $7,995
material handling, distribution, manufacturing, and data collection
systems and devices - first port on AS/400 system
-------------------------------------------------------------------------------------------------
100-014 Polar System(TM) software license - adds to 100-001 the ability to poll quoted on
remote sites on a user-defined schedule request plus
100-001
-------------------------------------------------------------------------------------------------
100-020 Protocol Support software license - adds to 100-001 the ability to $2,595
interface with certain devices (check with ROI for appropriate plus
protocol level and license fee) - first port on AS/400 system 100-001
-------------------------------------------------------------------------------------------------
200-002 ROI Sockets(TM) software license for TCP/IP sockets connectivity without $7,995
complex programming - first connection on AS/400 system
-------------------------------------------------------------------------------------------------
200-005 ROI TCP/Remote(TM) software license for TCP/IP sockets connectivity $7,995
between systems (AS/400 to AS/400 or to non-AS/400) without complex
programming - first AS/400
-------------------------------------------------------------------------------------------------
SUPPORT & SERVICES FOR SERIES 100, 200, AND 300 SOFTWARE
-------------------------------------------------------------------------------------------------
Series-Item Description Price
-------------------------------------------------------------------------------------------------
200-MID Additional Merchant ID - adds another merchant ID to ROI Card $250
(quantity discounts available) each
-------------------------------------------------------------------------------------------------
800-000 90 Day Warranty includes phone support and implementation assistance, included in
24 hours/day, 7 days/week license fee
-------------------------------------------------------------------------------------------------
800-001 Annual Support & Update Service (ASUS) includes phone support 24 15% of total
hours/day, 365 days/year; see ROI Software License Agreement for license fees
benefits of continuous ASUS
-------------------------------------------------------------------------------------------------
800-002 Annual Limited License for non-production AS/400 for equals
backup/development only (includes ASUS) - license expires annually on production
production system ASUS expiration date system ASUS
-------------------------------------------------------------------------------------------------
900-002 Programming Services (at ROI offices) - hourly rate $150
per hour
-------------------------------------------------------------------------------------------------
900-003 Design Services (at ROI offices) - hourly rate $250
per hour
-------------------------------------------------------------------------------------------------
900-005 On-Site Services (at location other than ROI offices) - rate per day $1,500
or portion (plus travel & living) per day
-------------------------------------------------------------------------------------------------
900-010 On-Site Expenses - travel & living expenses actual
-------------------------------------------------------------------------------------------------
Prices are effective January 1, 2000, are in U.S. dollars, apply only to the
United States and Canada, and supersede all previously published prices. Refer
to product documentation for specifications, prerequisites, and hardware and
software requirements. Fees and specifications are subject to change without
notice. Trademarks are the property of their respective owners. All software is
licensed by ROI Corporation subject to the terms and conditions of the
applicable license agreement provided with each item. License fees include one
set of media and documentation and a 90 day limited warranty with telephone
support and implementation assistance. Fees do not include shipping and handling
charges or applicable taxes. Each License Fee shown is for the first port on a
single CPU unless otherwise noted. The
[LOGO]
E-TRANSACTION MIDDLEWARE(SM)
000-000-0000 o xxx.xx000.xx
fee for each additional port or connection is discounted if purchased during the
initial warranty period or if ROI Annual Support & Update Service has been paid
for and in effect without any lapse in coverage.
-------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION LICENSE FEE
-------------------------------------------------------------------------------------------------
400-001 ROI JavaCard VisaNet1 POS-port Replacement software license for $5,995
VisaNet authorization network ONLY - 1 dial-up port -
includes 1 Merchant ID - NO upgrade or trade in permitted
-------------------------------------------------------------------------------------------------
400-002 ROI JavaCard VisaNet2 POS-port Replacement software license for $8,995
VisaNet authorization network - upgradable version - 1
dial-up port - includes 1 Merchant ID - continuous ASUS allows
trade in
-------------------------------------------------------------------------------------------------
400-004 ROI JavaCard Amex POS-port Replacement authorization network software $2,495
license - 1 dial-up port - requires 400-001 or 400-002 POS-port
Replacement license
-------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION LICENSE FEE
-------------------------------------------------------------------------------------------------
400-100 ROI JavaCard Manager software license - single AS/400 system - $7,995
prerequisite for authorization network licenses (one or more
must be added)
-------------------------------------------------------------------------------------------------
400-2XX ROI JavaCard host authorization network software license - 1 dial- $7,995
up connection - includes 1 Merchant ID - requires 400-100 ROI
JavaCard Manager (choose 1 from list of supported networks)
-------------------------------------------------------------------------------------------------
400-3XX ROI JavaCard terminal authorization network software license - 1 $7,995
dial-up connection - includes 1 Merchant ID - requires 400-100
ROI JavaCard Manager (choose 1 from list of supported networks)
-------------------------------------------------------------------------------------------------
400-4XX ROI JavaCard leased line authorization network software license - $9,995
1 connection - includes 1 Merchant ID - requires 400-100 ROI
JavaCard Manager (choose 1 from list of supported networks)
-------------------------------------------------------------------------------------------------
400-600 ROI JavaCard Ultra Manager software license - single AS/400 - $10,000
includes 8 incoming connections - requires 400-100 ROI JavaCard
Manager & authorization network license(s)
-------------------------------------------------------------------------------------------------
400-608 ROI JavaCard Ultra software license for up to 8 additional $995
concurrent incoming connections to same AS/400 - requires
400-600 ROI JavaCard Ultra Manager and its prerequisites
-------------------------------------------------------------------------------------------------
400-701 ROI JavaCard Interleaving software license - single AS/400 - $5,995
requires 400-100 ROI JavaCard Manager & authorization network
license(s) allowing interleaving
-------------------------------------------------------------------------------------------------
400-710 ROI JavaCard Signature Capture software license - single AS/400 - $7,995
requires 400-100 ROI JavaCard Manager & authorization network license(s)
-------------------------------------------------------------------------------------------------
SERIES-ITEM DESCRIPTION PRICE
-------------------------------------------------------------------------------------------------
400-900 90 Day Warranty includes phone support and implementation assistance, included
24 hours/day, 7 days/week in license
fee
-------------------------------------------------------------------------------------------------
400-901 Annual Support & Update Service (ASUS) includes phone support 24 15% of
hours/day, 365 days/year; see ROI Software License Agreement license fees
for benefits of continuous ASUS total
-------------------------------------------------------------------------------------------------
400-902 Annual Limited License for non-production AS/400 for equals
backup/development only (includes ASUS) - license expires production
annually on production system ASUS expiration date system ASUS
-------------------------------------------------------------------------------------------------
400-903 Programming Services (at ROI offices) - for Series 400 ROI JavaCard $150
software - hourly rate per hour
-------------------------------------------------------------------------------------------------
400-904 Design Services (at ROI offices) - for Series 400 ROI JavaCard $250
software - hourly rate per hour
-------------------------------------------------------------------------------------------------
400-905 On-Site Services (at location other than ROI offices) - for Series $1,500
400 ROI JavaCard software - rate per day or portion (plus per day
travel & living)
-------------------------------------------------------------------------------------------------
400-910 On-Site Expenses - travel & living expenses actual
-------------------------------------------------------------------------------------------------
400-950 ROI JavaCard Additional Merchant ID - adds 1 merchant ID to any ROI $150
JavaCard system - one-time charge for processing and setup e ach
-------------------------------------------------------------------------------------------------
Prices are effective October 1, 1999, are in U.S. dollars, apply only to the
United States and Canada, and supersede all previously published prices. Refer
to product documentation for specifications, prerequisites, and hardware and
software requirements. Fees and specifications are subject to change without
notice. Trademarks are the property of their respective owners. All software is
licensed by ROI Corporation subject to the terms and conditions of the
applicable license agreement provided with each item. License fees include one
set of media and documentation and a 90 day limited warranty with telephone
support and implementation assistance. Fees do not include shipping and handling
charges or applicable taxes.
[LOGO]
E-TRANSACTION MIDDLEWARE(SM)
000-000-0000 o xxx.xx000.xx
S.A.F.E.
[LOGO] 000 XXXXX XXXXXXX XXXXXX
XXXXXXX, XXXXXXXX 00000
800.366.8244
PRICING - PROFESSIONAL SERVICES AND
TRANSACTION PROCESSING
SYSTEM PROGRAMMING
--------------------------------------------------------------------------------
DESCRIPTION PROFESSIONAL FEES
--------------------------------------------------------------------------------
NETWORK - LAN $65 - 75/HOUR
--------------------------------------------------------------------------------
NETWORK - WAN $65 - 80/HOUR
--------------------------------------------------------------------------------
OPERATING SYSTEMS - MVS/VSE/VM, TANDEM, STRATUS $80 - 110/HOUR
--------------------------------------------------------------------------------
OPERATION SYSTEMS - AS/400, UNIX, AIX $65 - 80/HOUR
--------------------------------------------------------------------------------
DATABASE ADMINISTRATION - DB2, SYBASE, $80 - 110/HOUR
INFORMIX, ORACLE, ENFORM
--------------------------------------------------------------------------------
DATABASE MODELING $80 - 110/HOUR
--------------------------------------------------------------------------------
APPLICATION PROGRAMMING
--------------------------------------------------------------------------------
DESCRIPTION PROFESSIONAL FEES
--------------------------------------------------------------------------------
SQL SERVER $65 - 75/HOUR
--------------------------------------------------------------------------------
COBOL - AS/400, MVS, VSE, UNIX $65 - 80/HOUR
--------------------------------------------------------------------------------
C-LANGUAGE, C++, VB, $80 - 110/HOUR
--------------------------------------------------------------------------------
JAVA, HTML, CGI $65 - 80/HOUR
--------------------------------------------------------------------------------
BAL, TAL $80 - 110/HOUR
--------------------------------------------------------------------------------
POINT-OF-SALE - IBM 4680/4690, NCR, PICK $80 - 110/HOUR
--------------------------------------------------------------------------------
OPERATIONAL SUPPORT
--------------------------------------------------------------------------------
DESCRIPTION PROFESSIONAL FEES
--------------------------------------------------------------------------------
OPERATIONS - MVS/VSE/AS400/UNIX $65 - 75/HOUR
--------------------------------------------------------------------------------
PAYROLL - APPLICATION SUPPORT $80 - 110/HOUR
--------------------------------------------------------------------------------
WAREHOUSE - APPLICATION SUPPORT $65 - 80/HOUR
--------------------------------------------------------------------------------
NETWORK $80 - 110/HOUR
--------------------------------------------------------------------------------
TRANSACTION PROCESSING
--------------------------------------------------------------------------------
DESCRIPTION PROFESSIONAL FEES
--------------------------------------------------------------------------------
GIFT CARD/STORED-VALUE CARD/LOYALTY CARD INCLUDES TRANSACTION FEE AND
DISCOUNT RATE
--------------------------------------------------------------------------------
CREDIT/DEBIT/ACH PROCESSING INCLUDES TRANSACTION FEE AND
DISCOUNT RATE
--------------------------------------------------------------------------------
SCHEDULE B
----------
TO AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
ESCROW AGREEMENT
----------------
THIS ESCROW AGREEMENT ("Agreement") is made and entered into as of the ____
day of _________, _____, by and among RETURN ON INVESTMENT CORPORATION, a
corporation organized and existing under the laws of the State of Delaware
("ROI"), whose address is 0000 Xxxxxxx Xxxxx Xxxx., Xxxxx 000, Xxxxxxxx, XX
00000, Xxxxxx Xxxxxxxxx, an individual resident of Illinois ("Xxxxxxxxx"), whose
address is 43W107 Xxxxxxxx, Xxxxx, XX 00000, Xxxxxx X. Xxxxxxx, an individual
resident of Illinois ("Xxxxxxx"), whose address is 000 Xxxxxxxx Xxxx,
Xxxxxxxxxx, XX 00000, Xxxxxxx X. Xxxxxx, an individual resident of Illinois
("Xxxxxx"), whose address is 00000 Xxxxx Xxxxx Xxxxxx, Xxxxxxxxxx, XX 00000, and
Xxxx X. Xxxxxxxxxxxxxx, an individual resident of Illinois ("Spaccapaniccia"),
whose address is 0000 Xxxxxxxxxx Xxxxx, Xxxxxxxxxx, XX 00000, (Xxxxxxxxx,
Xxxxxxx, Xxxxxx, and Spaccapaniccia, collectively referred to as the
"Shareholders" and individually referred to as a "Shareholder").
W I T N E S S E T H:
--------------------
WHEREAS, ROI and the Shareholders have entered into that certain Agreement
and Plan of Merger and Exchange of Stock dated _____________________ (the
"Merger Agreement") under the terms of which the Shareholders received a total
of 400,000 shares (subject to adjustment as defined therein) of the $.01 par
value common stock of ROI as restricted in accordance with securities laws,
ROI's bylaws, and this Agreement (the "ROI Common Stock"); and
WHEREAS, the parties agree that a portion of the ROI Common Stock shall be
held in escrow and released to the Shareholders in accordance with the terms,
provisions, conditions and limitations set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants and
agreements set forth herein, and for other good and valuable consideration, the
receipt, adequacy and sufficiency of which are hereby acknowledged by the
parties hereto, the parties hereto do hereby mutually covenant and agree as
follows:
1. ESCROW. The number of shares of ROI Common Stock referred to throughout
this Agreement shall be adjusted from time to time to reflect any stock splits
or stock dividends or reclassification of capital structure. Of the total of
400,000 shares of ROI Common Stock issued to the Shareholders, 300,000 shares
were ordered to be delivered to the Shareholders as of the Closing (as defined
in the Merger Agreement), and 100,000 shares owned by the Shareholders as
follows: 77,000 shares by Xxxxxxxxx, 10,000 shares by Xxxxxxx, 10,000 shares by
Spaccapaniccia, and 3,000 shares by Xxxxxx (collectively the "Escrowed Shares")
shall be held in escrow by ROI to be released according to the terms of Section
2 of this Agreement. ROI agrees to hold the same and to perform the duties
required hereunder.
2. RELEASE OF SHARES. Within 30 days after the issuance of ROI's audited
financial statements for the fiscal year ending June 30, 2002, if at least
$5,000,000 has been contributed to ROI's
net revenue by S.A.F.E. Systems software and services (excluding equipment
sales) for the period commencing with the effective date of the merger
consummated under the terms of the Merger Agreement and ending on June 30, 2002,
the Escrowed Shares shall be released by ROI (adjusted from time to time to
reflect any other splits or stock dividends or reclassification of capital
structure) to the Shareholders. If the Escrowed Shares are not released, they
shall be repurchased from the Shareholders by ROI at par value and returned to
the Treasury of ROI. If any entity proposes to acquire ROI prior to the release
or repurchase of the Escrowed Shares, the Escrowed Shares shall be released to
the Shareholders prior to or at the closing of such acquisition.
3. RIGHTS AND PRIVILEGES. Except for the proxy granted by the Shareholders
under the terms of the Merger Agreement, the Shareholders shall enjoy all of the
rights and privileges related to the Escrowed Shares unless and until any of the
Escrowed Shares are returned to the Treasury as described in Section 2 hereof,
including, but not limited to, any and all voting rights and dividends,
provided, however, that any Escrowed Shares that have not yet been released to
the Shareholders and any rights or privileges associated therewith may not be
sold, transferred, or pledged.
4. LEGEND ON SHARES; PIGGYBACK REGISTRATION. Each certificate for shares of
ROI Common Stock issued hereunder, unless at the time of exercise such shares
are registered under the Securities Act of 1933, as amended (the "Act"), shall
bear the following legend (and any additional legend required by the any
national securities exchanges upon which such shares may, at the time of such
exercise, be listed or under applicable securities laws):
The securities represented by this certificate have not been registered
under the Securities Act of 1933, as amended (the "Act"), or the securities laws
of any state. They may not be sold, transferred, assigned, pledged,
hypothecated, encumbered, or otherwise disposed of in the absence of
registration under said Act and all other applicable securities laws, unless an
exemption from registration is available.
The Shareholders agree to hold the Escrowed Shares released hereunder for a
minimum of one (1) year after the release of such shares. Except for the
foregoing minimum holding period, the Shareholders shall have unlimited
piggyback registration rights for any shares of ROI Common Stock issued
hereunder. If ROI at any time proposes for any reason to register any of its
securities under the Act, it shall each such time promptly give written notice
to the Shareholders of its intention to do so, and upon the written request,
given within thirty (30) days after receipt of any such notice, of any of the
Shareholders to register any shares of ROI Common Stock held by any of them, ROI
shall cause all such shares to be registered under the Act, all to the extent
requisite to permit the sale or other disposition by any of the Shareholders of
the shares respectively held by them so registered. ROI, at its sole expense,
shall take all actions required and prepare and file any and all documents
required under the Act or any other securities or "blue sky" laws of any
jurisdictions reasonably requested by the Shareholders or by the Securities and
Exchange Commission or any other regulatory agency.
5. FURTHER ACTION. At any time and from time to time the parties to this
Agreement agree, at their expense, to take such actions and to execute and
deliver such documents as may be reasonably necessary to effectuate the purposes
of this Agreement.
6. NOTICES. Any notice, request or other communication required or
permitted hereunder shall be in writing and shall be deemed to have been duly
given if sent by registered or certified mail, return receipt requested, postage
prepaid, to the parties at their respective addresses set forth above, or to
such other addresses as may be furnished in writing from time to time by any
party hereto to the other parties.
7. ASSIGNMENT. Except as permitted herein, none of the parties to this
Agreement may assign its respective rights and obligations hereunder without the
prior written consent of the other parties hereto.
8. TERMINOLOGY AND SECTION HEADINGS. All personal pronouns in this
Agreement, whether used in the masculine, feminine or neuter gender shall
include all other genders; the singular shall include the plural and the plural
shall include the singular. Titles of Paragraphs are for convenience only, and
neither limit nor amplify the provisions of this Agreement.
9. BINDING EFFECT. Subject to the restrictions on assignments set forth in
this Agreement, this Agreement and the rights of the parties hereunder shall
inure to the benefit of and be binding upon the parties and their respective
legal representatives, successors and assigns. Whenever in this Agreement a
reference is made to one of the parties, such reference shall be deemed to
include a reference to the legal representatives, heirs, successors and assigns
of such party.
10. SEVERABILITY. This Agreement shall be governed by and construed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be invalid or unenforceable, the remainder of this Agreement and the
application of such provision to other persons or circumstances shall not be
affected thereby, but rather shall be enforced to the greatest extent permitted
by law.
11. INTERPRETATION. In construing the terms and provisions of this
Agreement, it is understood and agreed that no court or other interpretive body
shall apply a presumption that the terms of this Agreement shall be more
strictly or particularly construed against one party hereto by reason of the
fact that said party, either directly or through its agents, prepared this
Agreement, it being understood and agreed that all parties, either directly or
through their agents, have fully participated in the preparation hereof.
12. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia.
13. ENTIRE AGREEMENT. Except as specifically provided in this Agreement to
the contrary, this Agreement constitutes the entire agreement between the
parties hereto regarding the subject matter hereof, and no modification hereof
shall be effective unless made a supplemental agreement in writing executed by
all of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be
executed in multiple counterparts, each of which shall be deemed an original,
with their respective seals affixed thereto all as of the date and year first
above written.
RETURN ON INVESTMENT CORPORATION
Attest: ________________________ By: ______________________________
Its: ______________________ Its: ________________________
[CORPORATE SEAL]
SHAREHOLDERS:
__________________________________(SEAL)
XXXXXX XXXXXXXXX
__________________________________(SEAL)
XXXXXX X. XXXXXXX
__________________________________(SEAL)
XXXXXXX X. XXXXXX
__________________________________(SEAL)
XXXX X. XXXXXXXXXXXXXX
SCHEDULE C
----------
TO AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
PROXY
-----
To the Board of Directors of RETURN ON INVESTMENT CORPORATION (the "Company"):
The undersigned, with respect to all of the shares of Common Stock of the
Company standing in the name of the undersigned, hereby grants the President of
the Company an irrevocable proxy to vote such shares from the date hereof
through June 30, 2002, at any and all meetings of the shareholders of the
Company. This Proxy shall expire at midnight on June 30, 2002. The undersigned
hereby expressly revokes any and all proxies heretofore given or executed by the
undersigned with respect to the shares represented by this Proxy and, filing
this Proxy with the Secretary of the Company gives notice of such revocation.
_____________________________ ____________________________________
DATE NUMBER OF SHARES HELD
_____________________________ ____________________________________
SIGNATURE SIGNATURE IF JOINTLY HELD
_____________________________ ____________________________________
PRINT NAME PRINT NAME IF JOINTLY HELD
SCHEDULE E
----------
TO AGREEMENT AND PLAN OF MERGER AND EXCHANGE OF STOCK
-----------------------------------------------------
S.A.F.E. Systems Inc.
Balance Sheet 01/09/2001
As of December 31, 1999
Dec 31, '99
------------
ASSETS
Current Assets
Checking/Savings
Bank Fund Transfers 8,725.33
Office Account 6,199.23
SAFE ACC1 308,955.81
Silicon Valley Bank 96,250.15
SVB Treasury Cash Reserve 500,000.00
------------
Total Checking/Savings 920,130.52
Accounts Receivable
Accounts Receivable 167,761.71
------------
Total Accounts Receivable 167,761.71
Other Current Assets
Undeposited Funds 1,120.00
------------
Total Other Current Assets 1,120.00
------------
Total Current Assets 1,089,012.23
Fixed Assets
Computer Hardware
3-Year Computer Hardware 12,145.58
5-Year Computer Hardware 23,943.23
Computer Hardware - Other 2,700.06
------------
Total Computer Hardware 38,788.87
Computer Software 233.26
Furniture 43,191.71
Leasehold Improvement 35,305.62
------------
Total Fixed Assets 117,519.46
Other Assets
Accumulated Amortization
A.A. - Leasehold (1,779.82)
------------
Total - Accumulated Amortization (1,779.82)
Prepaid Components
McPass Plastics 5,719.01
Tranz 330 5,100.00
Tranz 380 10,150.00
Tranz Pak 64,448.00
Prepaid Components - Other 8,616.42
------------
Total Prepaid Components 94,033.43
Accumulated Depreciation
Computer Hardware (5,540.70)
Computer Software (27.09)
Furniture (3,143.50)
------------
Total Accumulated Depreciation (8,711.29)
Security Deposits 8,750.00
------------
Total Other Assets 92,292.32
------------
TOTAL ASSETS 1,298,824.01
============
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 178,336.63
------------
Total Accounts Payable 178,336.63
Other Current Liabilities
Officer's Payable 80,000.00
Payroll Liabilities 145,299.09
------------
Total Other Current Liabilities 225,299.09
------------
Total Current Liabilities 403,635.72
Long Term Liabilities
Long Term Debt 875,000.00
------------
Total Long Term Liabilities 875,000.00
------------
Total Liabilities 1,278,635.72
Equity
Additional Paid In Capital 100.00
Common Stock 79,698.00
Retained Earnings 21,349.29
Net Income (80,959.00)
------------
Total Equity 20,188.29
------------
TOTAL LIABILITIES & EQUITY 1,298,824.01
============
S.A.F.E. Systems Inc.
Profit and Loss 01/09/2001
January through December 1999
Jan - Dec '99
------------
Ordinary Income/Expense
Income
Consulting Income 2,297,356.22
Reimbursed Expenses 113,039.00
------------
Total Income 2,410,395.22
------------
Gross Profit 2,410,395.22
Expense
Advertising
Business 1,807.39
Charitable 3,843.75
Employment 197.40
Product 1,647.75
Advertising - Other 154.00
------------
Total Advertising 7,650.29
Amortization
Leasehold Improvements 1,779.82
------------
Total Amortization 1,779.82
Bad Debt 44,000.00
Bank Service Charges 2,241.36
Cash Discounts (2,149.15)
Communications
Cell Phone 8,185.36
Dedicated Access 853.61
Long Distance 10,722.89
Communications - Other 179,254.71
------------
Total Communications 199,016.57
Computer Insurance/Liability 359.68
Computer Purchases - Misc 4,251.82
Computer Support 6,791.44
Contractor 3,732.07
Contributions 2,086.27
Copies 696.77
Depreciation Expense
Computer Hardware 5,257.38
Furniture 3,143.50
Software 27.09
------------
Total Depreciation Expense 8,427.97
Dues and Subscriptions 4,700.00
Equipment Rental 72,094.80
Insurance
Cobra 1,560.44
Health Insurance 81,500.84
Work Comp 364.68
------------
Total Insurance 83,425.96
Licenses & Permits 70.00
Office Supplies 8,666.28
Payroll Expenses
Employee Incentive 142,961.96
Outside Consulting Fees 144,080.00
Temporary Employees 56,799.50
Payroll Expenses - Other 1,432,900.99
------------
Total Payroll Expenses 1,776,742.45
Postage and Delivery 9,702.10
Printing and Reproduction 748.44
Professional Fees
Accounting 13,574.86
Legal Fees 23,422.22
Professional Fees - Other 1,320.00
------------
Total Professional Fees 38,317.08
Rent 92,817.41
Repairs
Building Repairs 885.86
Equipment Repairs 187.75
------------
Total Repairs 1,073.61
Taxes
Federal --
State 517.00
------------
Total Taxes 517.00
Travel & Ent
Miscellaneous 39,970.59
Investor's Lunch 212.87
Food 1,168.36
Conferences 11,304.85
Entertainment 5,818.00
Meals 500.20
Travel 2,513.46
Travel & Ent - Other 1,881.19
------------
Total Travel & Ent 63,369.52
Uncategorized Expenses 5,615.62
Utilities
Exterminating 274.50
Gas & Electric 5,270.97
Janitorial Services 708.34
Refuse 242.00
Water 4,053.56
Utilities - Other 3,052.36
------------
Total Utilities 13,601.73
------------
Total Expense 2,450,346.91
------------
Net Ordinary Income (39,951.69)
Other Income/Expense
Other Expense
Tuition 5,116.06
Other Expenses
Special Reimbursements 6,550.00
Unusual Items 29,341.25
------------
Total Other Expense 35,891.25
------------
Total Other Expenses 41,007.31
------------
Net Other Income (41,007.31)
------------
Net Income (80,959.00)
============
S.A.F.E. Systems Inc.
Statement of Cash Flows 01/09/2001
January through December 1999
Jan - Dec '99
------------
OPERATING ACTIVITIES
Net Income (80,959.00)
Adjustments to reconcile Net Income
to net cash provided by operations:
Accounts Receivable (166,786.71)
Accounts Payable 178,280.99
Officer's Payable 30,000.00
Payroll Liabilities 110,141.13
------------
Net cash provided by Operating Activities 70,676.41
------------
INVESTING ACTIVITIES
Computer Hardware (7,200.06)
Computer Hardware:3-Year Computer Hardware (12,145.58)
Computer Hardware:5-Year Computer Hardware (19,443.23)
Computer Software (233.26)
Furniture (43,191.71)
Leasehold Improvement (35,305.62)
Accumulated Amortization:A.A. - Leasehold 1,779.82
Prepaid Components (8,616.42)
Prepaid Components:McPass Plastics (5,719.01)
Prepaid Components:Tranz 330 (5,100.00)
Prepaid Components:Tranz 380 (10,150.00)
Prepaid Components:Transpak (64,448.00)
Accumulated Depreciation:Computer Hardware 5,257.38
Accumulated Depreciation:Computer Software 27.09
Accumulated Depreciation:Furniture 3,143.50
Security Deposits (8,750.00)
------------
Net cash provided by Investing Activities (210,095.10)
------------
FINANCING ACTIVITIES
Long Term Debt 875,000.00
Treasury Debt 79,698.00
------------
Net cash provided by Financing Activities 954,698.00
Net cash increase for period 815,279.31
Cash at beginning of period 105,971.21
------------
Cash at end of period 921,250.52
============
S.A.F.E. Systems Inc.
Balance Sheet 01/09/2001
As of December 31, 2000
Dec 31, '00
------------
ASSETS
Current Assets
Checking/Savings
Bank Fund Transfers 8,725.33
CB&T Marketier Account 2,524.40
Central Bank & Trust Co. 94.46
Office Account 6,199.23
SAFE ACC1 33,946.53
Silicon Valley Bank (145.79)
SVB Treasury Cash Reserve 44.88
------------
Total Checking/Savings 51,389.04
Accounts Receivable
Accounts Receivable 204,492.50
------------
Total Accounts Receivable 204,492.50
Total Current Assets 255,881.54
Fixed Assets
Computer Hardware
3-Year Computer Hardware 46,637.25
5-Year Computer Hardware 25,477.48
Computer Hardware - Other 2,700.06
------------
Total Computer Hardware 74,814.79
Computer Software 28,688.51
Furniture 59,486.03
Leasehold Improvement 35,305.62
------------
Total Fixed Assets 198,294.95
Other Assets
Accumulated Amortization
A.A. - Leasehold (4,952.98)
------------
Total - Accumulated Amortization (4,952.98)
Prepaid Components
1200C Controllers 6,631.52
Mag-Tek Card Readers 1,464.32
McPass Plastics 10,023.74
Misc McPass Materials 5,351.75
Tranz 330 5,100.00
Tranz 380 12,633.68
Tranz Pak 64,448.00
Prepaid Components - Other 10,812.91
------------
Total Prepaid Components 116,465.92
Accumulated Depreciation
Computer Hardware (25,060.35)
Computer Software (4,068.76)
Furniture (11,384.07)
------------
Total Accumulated Depreciation (40,513.18)
Security Deposits 10,337.08
------------
Total Other Assets 81,336.84
------------
TOTAL ASSETS 535,513.33
============
LIABILITIES & EQUITY
Liabilities
Current Liabilities
Accounts Payable
Accounts Payable 188,269.36
------------
Total Accounts Payable 188,269.36
Other Current Liabilities
A/R Factor 76,577.22
Officer's Payable 94,000.00
Payroll Liabilities 133,930.87
Short Term Loan Payable 300,000.00
------------
Total Other Current Liabilities 604,508.09
------------
Total Current Liabilities 792,777.45
Total Liabilities 792,777.45
Equity
Additional Paid In Capital 100.00
Common Stock 79,698.00
Retained Earnings (59,609.71)
Net Income (192,452.41)
Treasury Stock (85,000.00)
------------
Total Equity (257,264.12)
------------
TOTAL LIABILITIES & EQUITY 535,513.33
============
S.A.F.E. Systems Inc.
Profit and Loss 01/09/2001
January through December 2000
Jan - Dec '00
------------
Ordinary Income/Expense
Income
Consulting Income 1,431,263.52
Other Regular Income 8,963.43
Reimbursed Expenses 11,413.90
Software Sales 1,350,000.00
Transaction Processing --
------------
Total Income 2,801,640.85
------------
Gross Profit 2,801,640.85
Expense
Advertising
Business 15,321.30
Employment 26.75
Product 309.00
Advertising - Other 125.00
------------
Total Advertising 15,782.05
Amortization
Leasehold Improvements 3,173.16
Organizational Costs --
Patents --
------------
Total Amortization 3,173.16
Bad Debt 14,084.40
Bank Service Charges 3,704.18
Communications
1-800-conference 2,780.88
Cell Phone 15,597.02
Dedicated Access 29,304.48
Leased Equipment 426.34
Leased Line 4,985.61
Long Distance 20,377.65
Transaction Processing 5,101.20
Communications - Other 68,548.09
------------
Total Communications 147,121.27
Computer Purchases - Misc 2,557.71
Computer Support 26,582.24
Contractor 130.00
Contributions 1,208.14
Copies 239.85
Depreciation Expense
Computer Hardware 19,519.65
Furniture 8,240.57
Software 4,041.67
------------
Total Depreciation Expense 31,801.89
Dues and Subscriptions 1,037.20
Equipment Rental 82,548.86
Insurance
Health Insurance 168,164.39
Liability Insurance 1,414.19
Life Insurance 5,344.90
Work Comp 924.46
------------
Total Insurance 175,847.94
Interest Expense
Finance Charge 485.84
Loan Interest 4,570.82
Interest Expense - Other 50,000.00
------------
Total Interest Expense 55,056.66
Licenses & Permits 105.00
Office Supplies
Office Supplies - Chicago 1,188.98
Office Supplies - Other 5,125.02
------------
Total Office Supplies 6,314.00
Outside Services 1,892.00
Payroll Expenses
Employee Incentive 4,501.96
Outside Consulting Fees 134,636.63
Payroll Expenses - Other 1,966,131.29
------------
Total Payroll Expenses 2,105,269.88
Postage and Delivery 1,876.65
Printing and Reproduction 2,000.22
Professional Fees
Accounting 2,190.00
Legal Fees 68,116.82
Professional Fees - Other 6,466.00
------------
Total Professional Fees 76,772.82
Rent 145,051.22
Repairs
Building Repairs 1,148.54
------------
Total Repairs 1,148.54
Travel & Ent
Miscellaneous 7,806.84
Investor's Lunch 1,137.57
Food 1,918.46
Conferences 18,308.45
Entertainment 53.30
Meals 4,760.61
Travel 24,200.41
Travel & Ent - Other 1,099.32
------------
Total Travel & Ent 59,284.96
Uncategorized Expenses --
Utilities
Gas & Electric 20,038.71
Janitorial Services 5,731.00
Refuse 502.50
Water 915.70
Utilities - Other --
------------
Total Utilities 27,187.91
------------
Total Expense 2,987,778.75
------------
Net Ordinary Income (186,137.90)
Other Income/Expense
Other Income
Insurance Proceeds (53.83)
Other Income
Unusual Items (2,385.68)
------------
Total Other Income (2,385.68)
Total Other Income (2,439.51)
Other Expense
Other Expenses
Unusual Items 3,875.00
------------
Total Other Expense 3,875.00
------------
Total Other Expenses 3,875.00
------------
Net Other Income (6,314.51)
------------
Net Income (192,452.41)
============
S.A.F.E. Systems Inc.
Statement of Cash Flows 01/09/2001
January through December 2000
Jan - Dec '00
------------
OPERATING ACTIVITIES
Net Income (192,452.41)
Adjustments to reconcile Net Income
to net cash provided by operations:
Accounts Receivable (36,730.79)
Accounts Payable 9,932.73
A/R Factor 76,577.22
Officer's Payable 14,000.00
Payroll Liabilities (11,368.22)
Short Term Loan Payable 300,000.00
------------
Net cash provided by Operating Activities 159,958.53
------------
INVESTING ACTIVITIES
Computer Hardware:3-Year Computer Hardware (34,491.67)
Computer Hardware:5-Year Computer Hardware (1,534.25)
Computer Software (28,455.25)
Furniture (16,294.32)
Accumulated Amortization:A.A. - Leasehold 3,173.16
Prepaid Components (2,196.49)
Prepaid Components:1200C Controllers (6,631.52)
Prepaid Components:Mag-Tek Card readers (1,464.32)
Prepaid Components:McPass Plastics (4,304.73)
Prepaid Components:Misc McPass Materials (5,351.75)
Prepaid Components:Tranz 380 (2,483.68)
Accumulated Depreciation:Computer Hardware 19,519.65
Accumulated Depreciation:Computer Software 4,041.67
Accumulated Depreciation:Furniture 8,240.57
Security Deposits (1,587.08)
------------
Net cash provided by Investing Activities (69,820.01)
------------
FINANCING ACTIVITIES
Long Term Debt (875,000.00)
Treasury Debt (85,000.00)
------------
Net cash provided by Financing Activities (960,000.00)
Net cash increase for period (869,861.48)
Cash at beginning of period 921,250.52
------------
Cash at end of period 51,389.04
============
SCHEDULE E-1
STORE-VALUE/GIFT/LOYALTY
cs_ptransferbal.c cs_ptransinfo.c rTrustReceipt.h
cs_vachstoredtl.c rec.c
cs_vachstoresumm.c retailer.c
cs_vachtranssumm.c retailer.h
cs_vcardview.c rt_aactivity.c
cs_vchbalinq.c rt_achgpass.c
cs_vchtranslog.c rt_alogin.c
cs_veditcard.c rt_astoreinq.c
cs_vmain.c rt_atranslogsel.c
ach_bgenach.c cs_vmaintfunc.c rt_logout.c
ach_bgenach.h cs_vtransferbal.c rt_pchgpass.c
ach_schema.h dbachfunctions.c rt_plogin.c
b_pasynctran_devd.c dbachfunctions.h rt_rtranslog.c
b_pasynctrand.c dbautoreplenish.c
b_pauthtrans.c dbautoreplenish.h
b_pauthtrans.o rt_vactivity.c
b_pbatchrqst.c dbcard.c
b_pdollars.c dbcard.h
b_pfaxrqst.c dbcardcardholder.c
b_pfaxrqstd.c dbcardcardholder.h
b_xxxxxxxxx.x.xxx rt_vdollars.c
b_ppoints.c dbcardholder.c
b_ppointsdollars.c dbcardholder.h
b_ppointsold.c dberr.h rt_vpoints.c
b_pretryrqst.c rt_vstoreinq.c dboci.c
dboci.h rt_vtranslog.c rt_vstorelst.c
card.c rt_vtranslog.new.c
card.h dboci2.exp
cardholder.c schema.h
cardholder.h dbpermissionsgroup.c
cardinq.c dbpermissionsgroup.h
ch_achgpass.c dbstore.c sqlnet.log
ch_aenroll.c dbstore.h storelst.c
ch_alogin.c
ch_atranslogsel.c dbstorehistory.c
ch_insert1tmp.c dbstoreinfo.c
ch_logout.c dbstoreinfo.h support.c
ch_pchgpass.c dbterminal.c
ch_penroll.c dbterminal.h support.h
ch_plogin.c dbtranshistory.c
dbtranshistory.h supportnew.c
ch_vbalinq.c dbuser.c
ch_vbalinq.new.c sv_async_tran.h
ch_vbalinq.old.c
ch_venroll.c dbuser.h sv_dir.h
ch_vmain.c defs.h sv_dir_dev.h
ch_voptions.c defs.h.sav sv_flatfile.h
ch_vtranslog.c djc.file
cs_aacctgfunc.c dynamic.c
cs_aachfax.c err.h trans_db_updt_d.c
cs_aachxmit.c
cs_acardholderfunc.c
cs_acardview.c gen_prog_cards.c trans_type.h
cs_achbalinq.c gen_program_cards.c trans_type1.h
cs_achgpass.c gen_trust_cards.c trust_receipt.h
cs_achtranslogsel.c user.c
cs_alogin.c gen_trust_receipt.c user.h
cs_aretailerfunc.c genenv.c utility.c
cs_asearch.c getenv.c
cs_asearchcard.c insert.c utility.h
cs_atransferbal.c lu0msg.h
cs_atransinfo.c neo_merchacto.c
cs_atranslogsel.c neo_store.h
cs_logout.c neo_storeinq.c cs_pachfax.c
cs_pachxmit.c neo_storelst.c cs_pchgpass.c
ociapr.h
cs_peditcard.c ocidem.h
cs_penroll.c ocidfn.h wwwutil.c
cs_penrollnew.c ocikpr.h
cs_penrollold.c oratypes.h wwwutil.h
cs_plogin.c
cs_psearch.c b_authsvtrans.c
achfax.form cs_vlogged_out.html c_translogsel.html
auto.html cs_vtransdone.html card_balance.html
ch_achgpass.html cs_vtransferbal.html card_enroll.html
ch_aenroll.html cs_vtransfercard.html cardholder1.html
ch_alogin.html employment.html cardholder_login1.htm
ch_atranslogsel.html fast_food.html cardholder_main.html
ch_main.html menubar_clients.html cardholder_options.html
ch_menubar.html menubar_purchase1.html ch_achgpass.html
ch_vbalinq.html newcache1.html ch_aenroll.html
ch_vbalinq1.html newtest.html ch_alogin.html
ch_venroll.html newtest1.html ch_atranslogsel.html
ch_vlogged_out.html newtest2.html ch_inquiry.html
ch_voptions.html newtest3.html ch_inquiry2.html
ch_vtranslog.html newtest31.html ch_main.html
clients.html newtest5.html ch_menubar.html
clients1.html newtest6.html ch_vbalinq.html
clients2.html newtest7.html ch_venroll.html
clients_main.html newtest8.html ch_vlogged_out.html
cs_aacctgfunc.html newtest9.html ch_voptions.html
cs_aachfax.html newtestB.html ch_vtranslog.html
cs_aachxmit.html purchase_main1.html client_enroll.html
cs_acardholderfunc.html purchase_main2.html clients.html
cs_achbalinq.html purchase_main4.html clients1.html
cs_achgpass.html purchase_main5.html clients2.html
cs_achtranslogsel.html rt_aactivity.html clients_main.html
cs_aenroll.html rt_achgpass.html cs_alogin.html
cs_alogin.html rt_alogin.html cs_asearchview.html
cs_aretailerfunc.html rt_astoreinq.html cs_aviewcard.html
cs_asearchcard.html rt_atranslog.html cs_main.html
cs_asearchview.html rt_atranslogsel.html cs_view.htm
cs_atransfercard.html rt_main.html cs_view.html
cs_atranslogsel.html rt_vactivity.html customer_detail.html
cs_aviewcard.html rt_vdollars.html customer_detail1.htm
cs_edit.html rt_vlogged_out.html daily_clerk1.htm
cs_main.html rt_vpoints.html daily_clerk_act.html
cs_maintfunc.html rt_vstoreinq.html daily_store_act1.html
cs_vachstoredtl.html rt_vtranslog.1107bkp.html daily_store_act2.html
cs_vachstoredtl_line.html rt_vtranslog.form employment.html
cs_vachstoresumm.html rt_vtranslog.form.old enroll_client1.htm
cs_vachstoresumm_line.html rt_vtranslog.html example1.html
cs_vachtranssumm.html rt_vtranslog.html.sav file1.html
cs_vachtranssumm_line.html smit.log index.html
cs_vcardinactive.html sqlnet.log xxxxx.xxxx.xxx
cs_vchgpass.html vdollars.html index.old.html
cs_vchtranslog.html indexnew.html
cs_veditdone.html Welcome.html indexold.html
cs_venroll.html accounting_fun1.htm log_fail.html
cs_view.htm back1.html logged_out.html
cs_view.html back2.html login.html
cs_viewnew.html back3.html login2.html
cs_viewold.html background3.html login3.html
main.html CREDIT/DEBIT serbius1.c
main2.html shrtstcs.c
main3.html amex_draft.c shrtstso.c
mcd_merchact.html amexecho.c shrtstst.c
mcd_merchinq.html amexgen.c simtest.c
menubar1.html amexgen1.c simtest1.c
menubar_cardholder.html amexin.c smcs.c
menubar_cardholder2.html amexmih.c smcsd.c
menubar_clients.html amexmihn.c smkl.c
menubar_newtest3.html amexmoh.c smkld.c
menubar_purchase1.html amexmoh2.c smqtest.c
menubar_retailer1.html amexmohn.c smso.c
menubar_support1.htm amexone.c smso1.c
merchant_act.html amexone1.c smsod.c
merchant_list.html amexone2.c smst.c
merchant_list2.html amexout.c smstd.c
newcache1.html amxcsi.c sv_batcheod.c
newtest.html amxcso.c sv_batchinq.c
newtest1.html amxi.c sv_batchinq_prod.c
newtest2.html amxkli.c sv_batchinq_qa.c
newtest3.html amxklo.c sv_proc_tran_dev.c
newtest31.html amxo.c sv_proc_tran_prod.c
newtest5.html amxsti.c sv_proc_tran_qa.c
newtest6.html amxsto.c sv_proc_tran_rnd.c
newtest7.html batch_inq.c visa_draft.c
newtest8.html batcheod.c visacsi.c
newtest9.html bd_cfu.c visai.c
newtestB.html blcklst.c visao.c
password_change.html credmoh.c visain.c
password_change1.html custmach.c visain1.c
purchase1.html disc.c visain2.c
purchase1.otml disc_draft.c visakli.c
purchase_main1.htm discin.c visamih.c
purchase_main2.htm discmih.c visamoh.c
purchase_main3.htm discmih1.c visaone.c
retailer1.html discmoh.c visaout.c
retailer3.html discmoh1.c visasti.c
retailer_login1.htm discmoh2.c voidmoh.c
retailer_main.html giftmoh.c
rt_menubar.html giftmoh1.c ROUTER/ORCHESTRATOR
safe_bodymain.html giftmoh2.c
start_page1.html giftmoh3.c act.c
store_activity1.htm giftmoh4.c act1.c
store_info1.html giftmoh5.c actsna.c
store_info2.html grptodos.c adv_main.c
store_inquiry.html machine.c advcs.c
store_inquiry1.html neo_batchinq.c advcs1.c
store_inquiry2.htm neo_batchinq1.c advcs2.c
store_inquiry3.htm neo_batchinq2.c advin.c
store_purchase.html neo_batchinq_prod.c advin1.c
store_purchase1.htm neo_batchinq_qa.c advin1_ildlbcom.c
support1.htm neo_batchinqo.c advin2.c
support_login1.htm neo_demon.c advin_ildlbcom.c
support_main.htm neo_refund1.c advkl.c
template1.html neo_retrymoh.c advkl1.c
title.html neo_returnmoh.c advkl2.c
transaction_detail.html neo_voidmoh.c advo.c
transaction_log.html neo_voidmoh1.c advo1.c
transaction_log1.html neo_voidmoh_prod.c advo2.c
transaction_select1.html neo_voidmoh_qa.c advout.c
untitled.htm postmoh.c advout1.c
user_options.html send_file.c advout2.c
view_modify1.htm serbius.c advst.c
advst1.c fax_new.c securedoc_prt.c
advst2.c cnd.c securemaint.c
blue_demon.c do_stat.c splitup.c
blue_demon1.c getdisk.c spltnsav.c
blue_nun.c logfile.c tmail.c
catchsig.c mksed.c tmail1.c
catchsig1.c conf_mg.c tmail2.c
xxxxxxxx0.c faxhng.c tmail3.c
ccgen.c gettydefs.c trollnew.c
cgipars1.c login.c trolltst.c
cgiparse.c modem.c util.c
dis.c conf_sf.c
dis1.c faxlib.c REFUND CONTROL
display.c goodies.c
display1.c logname.c rcs_cnvrt_blcklst.c
dissna.c sendfax.c rcs_cnvrt_cuse.c
dissna1.c config.c rcs_cnvrt_cust.c
genstore.c faxrec.c rcs_cnvrt_ident.c
getpbdos.c io.c rcs_cnvrt_refund.c
helpdesk.c mg_m_init.c rcs_cnvrt_suse.c
hlp_load_cmmnt.c tio.c rcs_cnvrt_trans.c
hlp_load_mbr.c do_chat.c rcs_ld_trans.c
hlp_load_prb.c faxsend.c rcs_main.c
hlp_rebuild_idx.c locks.c rcs_menu2.c
hostit.c mgetty.c rcs_menu2_bkp.c
in_demon.c utmp.c rcs_menu_bkp.c
inact.c rcs_report1.c
indexaix.c UTILITY rcsfix_cuse.c
indexaixo.c rcs_menu.c
jes2.c bd_cfu.c rcsfix_ident.c
listcov.c blcklst.c rcsfix_rpt.c
lmt.c count_lines.c refund.c
lu0_start.c custdtl.c refund1.c
netad.c custdtl_event.c refund_trak.c
netfix_cust.c custdtl_header.c refund_trn.c
netinv.c custdtl_load.c risc_refund.c
nm1match.c custinq.c risc_returnmoh.c
nm_match.c custinq_test.c store_rcs_old.c
red_demon.c data_mgr.c store_secure.c
safe_process_tran.c erg.c store_secure1.c
safe_process_tran1.c ergl.c storedvmoh.c
safe_process_tran2.c ergu.c str2moh.c
safetran.c filed2.c str3moh.c
styx.c filedump.c str_sec.c
t_rpt.c fileprnt.c str_sec1.c
tcheck.c fl.c
tconnect.c format_decimal.c SCHOOL CARD
snasysx.c fpbad.c
fpbap.c safe_carddtl.c
FAX SYSTEM fpbl.c safe_cust_lookup.c
fpbmd.c safe_district_lookup.c
dufus.c g32_3270.c safe_hometown.c
cicscs.c insert1.c safe_main.c
cicsfour.c insert2.c safe_school_lookup.c
cicsin.c jday.c safe_schooldtl.c
cicsin1.c nukecpr.c safe_schooldtl_bkp.c
cicsinout.c odin.c safecard.c
cicskl.c pg1.c safecust.c
cicsnone.c pgg.c safedistrict.c
cicsone.c pgsna.c safeschool.c
cicsout.c phone.c schoolmoh.c
cicssign.c restaurant1.c schoolmoh1.c
cicsst.c restaurant1_bkp.c schoolmoh2.c
fax2.cfax_.c retrymoh.c schoolmoh_prod.c
fax_1.c securedoc.c schoolmoh_qa.c
fax_main.c securedoc_main.c
SAFE SYSTEMS, INC. SCHEDULE E-2
------------------------------------------------------------------------------------------------------------------------------------
MARKET/
CATEGORY ITEM MODEL SERIAL STATUS REPLACEMENT PRICE
Modem
Short Haul Modem ME800A 9505 own
Short Haul Modem ME800A 9505 own
Short Haul Modem ME800A 9505 own
Short Haul Modem ME800A 9505 own
Short Haul Modem ME800A 9506 own
Short Haul Modem ME800A 9704 own
Short Haul Modem ME800A 9704 own
Short Haul Modem ME800A 9412 own
Short Haul Modem ME800A 9412 own
Xxxxx Accura 14,400 Fax144 5105AM A0115105K392 own
US Robotics 9600 V.32 MNP5 1.014.1013 165572 own
Us Robotics 28,800 Fax Modem 28800 83901146932906 own
IBM Modem ES9370 1111334A own
IBM Modem 7861-026 41-08593 own
IBM Modem 0000 X/X 0000000 own
Illinois Xxxx 295 N/A own
IBM Modem 7861-015 41-0128 own
AT&T Data Port 14.4/Fax Modem 3710-A1-201 3068988 own
Low haul modem ME800A 9704 own
Low haul modem ME800A 9412 own
Low haul modem ME800A 9412 own
US Robotics 14,400 Sportster Fax N/A 22680103725917 own
Low haul modem ME800A 9505 own
Low haul modem ME800A 9506 own
Low haul modem ME800A 9704 own
US Robotics 14,400 Sportster Fax 2.6805E+12 2680500752470 own
US Robotics 14,400 Sportster Fax 2.6805E+12 2680500752470 own
EVEREX Fax Modem EVERFAX 24/96E 20300061 own
EVEREX Fax Modem EVERFAX 24/96E 12900173 own
Worldblazer Fax Modem Model T35A own
Worldblazer Fax Modem Model T35A own
US Robotics Sportster 14,400 Fax Sportster 14,400 0002680514323640 own
US Robotics Sportster 14,400 Fax Sportster 14,400 000268010372592 own
US Robotics Sportster 14,400 Fax Sportster 14,400 0002680205574614 own
US Robotics Sportster 14,400 Fax Sportster 14,400 0002670208457391 own
Xxxxx X000X-XX 000-0000-00 320U1899 own
Xxxxx X000X-XX 000-0000-00 320U6307 own
Black Box - Long-Haul Modem Model ME800A 9505 own
Black Box - Long-Haul Modem Model ME800A 9506 own
Black Box - Long-Haul Modem Model ME800A 9703 own
Black Box - Long-Haul Modem Model ME800A 9412 own
Black Box - Long-Haul Modem Model ME800A 9412 own
AT&T Data Port 14.4/Fax Modem 3710-A1-201 3068988 own
US Robotics Courier V.32bis 61091 0064-16028883 own
IBM 7857-017 7857-017 53-B4840 own
Boca Modem 33,600bps 167879 own
Boca Modem 33,600bps 167858 own
Boca Modem 33,600bps 167891 own
Boca Modem 33,600bps 167886 own
MODEM
PC/Laptops REPLACEMENT $9,000.00
NEC Power Mate Computer PM-840-2000 23174150B own
Texas Instruments Extensa
560 CDT 9805680-0001 13163600826 own
Toshiba T3200 PA70390 01812469A own
Grafika Tower Quin-55m 62933300131 own
Vmax Tower H6D0 90N20A642001331 own
Compaq Series 28108 6204HBJ20023 own
AST Accentia 910N 4/75/CS10 235DNX017386 own
Compu Add Desktop C425S A002 842622 own
Compaq Presario Computer N/A X733BN523512 own
Toshiba laptop PA1224056A O8663557 own
Compaq Presario Tower 4550 6802BSW9H945 own
Ameritech Tower Model Series i - T T250015634 own
CompuAdd Desktop C425S A002 842622 own
Compu Add TE 1464M 144T502214 own
IBM 2155 43 C 23CPW68 own
Force 1 Packard Xxxx Computer Force III 90137331 own
IBM Computer 6887-KAG 23FVVLD P100 own
Compaq DeskPro 6812BNT50549 own
Compaq DeskPro 6724HVT5P953 own
Compaq DeskPro 6735HVT3P792 own
Compaq DeskPro 6812BNT5P502 own
Compaq Laptop N/A own
Compaq DeskPro Pentium II 6909-CBN4 own
Compaq DeskPro 67538NT5Q098 own
Compaq Presario 2H9BCT9FM69B own
Compaq Laptop N/A own
Acer TravelMate 342T own $23,000.00
Compaq Prosignia 300 D632HUN10238 own
PC REPLACEMENT
$140,000.00
Printers
IBM ProPrinter 4201-001 00-0000000 own
Brothers Facsimile Transceiver MFC7000FC L73782695 own
HP Laser Jet 4-L Printer C2003A USBB555711 own
HP Desk Jet 1200 C/PS Color
printer C1676A USA3B12078 own
Lexmark Printer Model 4039-10R LR 55412 own
IBM 3816 IS 41-10383 own
HP LaserJet 1100 USJB155206 own
HP LaserJet 1100 USHP047486 own
HP LaserJet Series II 20950 own
HP DeskJet 500C MY4631DOYP own
Xerox 4890 120317 own $45,000.00
Xerox LR 43173 pn#9zE17270 own
Xerox LR43173 91P1417 own $125,000.00
PRINTER
DASD REPLACEMENT $200,000.00
Bay Stack Access Node Disk N/A BEX0067506 own
Tec Mar Disk QT250ES C9107012249 own
IBM Xxxx Xxxxx XX0000 XX000X0000 own
Aorta Disk Drive ADM5 3887656 own
Xxxxxx Xxxx Xxxxx XX0000X 528782 own
IBM Disk Drive 4869 86--112313 own
Xxxxx XX-Xxx X00000 XXXX000XX0 own
Xxxxxxxx XX-ROM OMN126 OMN024156 own
IBM CD-ROM N/A 2605584 own
External CD-ROM IBM 7210-001 MS72102630861 own
IBM Ramac Dasd GX33-1505-1 own $50,000.00
IBM CD-ROM drive P/N 00G0968 21991 own
DASD
Tape Drives REPLACEMENT $60,000.00
Colorado Tape Deck System N/A EFZ26A9KE own
Reel Tape Unit IBM 3803 N/A own
External Tape Backup IBM 7208-011 MS 72082653822 own
IBM 2440 JO2 9309 00-0000000 own
IBM 3803 Tape Controller 3803 own
IBM 3420 34020 own
IBM 3420 3420 K0770 own
IBM 3480 9309 00-0000000 own
IBM 9335-B01 9309 #010051064 own
IBM 9335/9375 9309 #010051063 own
IBM 2440-A02 9309 #00-0000000 own
IBM 3480 A22 XF B22 own
TAPE
Comm Devices REPLACEMENT $20,000.00
IBM HUB 8863841 A0000000000 own
Data Probe CD-4-DF 1955.0-061 own
Teltrend Inteliport 1 295 N/A own
NetPath 100 470 Netpath 584 own
IBM Router IBM 2210 23C0395 own
Transceiver M-508A 041291508A own
Access-T Access DSU/CSU 195994A own
Ethernext Hub 846440410 own
Syn Optics Model 28115 3993240 own
IBM 3745-410 Type 9309 0057231 &57-B134E &010002990 own $190,000.00
COMM
REPLACEMENT $210,000.00
Processors
RS6000 N/A MS70132626507 own $36,000.00
RS6000 N/A MS70142625508+C9 own $40,000.00
IBM 7861-025 N/A 41-12029 own
IBM 7208-011 N/A MS72082650091 own
IBM Power Server 320 type 7012 MS70122611719 own $15,000.00
IBM 7204-001 N/A MS72042609154 own $12,000.00
Sun Sparcstation 10 Model 144 600-3192-03 own $5,000.00
Sun 000-0000-00 0063989-0000000000 own $110,000.00
RS600 Internet Server Model 530H own $42,000.00
IBM Risc System/6000 7012 26 -10316 own $32,000.00
Siemens Nixdorf PCD-3BSX 26361-K293-v474 own
Siemens Nixdorf PCD-4T SZ6361-K257-V401 own
--------------------
IBM AS400 9404 10-36013 own
IBM 3708/9371 pn#6405393 id#000EM89065 own
IBM Risc System/6000 own $45,000.00
IBM Risc System/6000 own $45,000.00
IBM 9370 6102777 ec#A28365 own
IBM 9672 9999-12 sn#00-0000000 own
IBM ES 9370 8530 FCC#AN09SA8530 own
IBM S/390 2003 02-45362 lease $500,000.00
PROCESSOR
REPLACEMENT $500,000.00
Verifones
200C Controllers $2,882.12
1 own
Mag-Tek own 1,464.32
17 Tranz 330 Verifones own 5,100.00
Tranz 380 own 12,633.48
Tranz Pak-380 own 64,448.00
VERIFONE
REPLACEMENT $86,527.92
TOTAL
REPLACEMENT
$1,225,527.92
DATE NAME MEMO AMOUNT
-----------------------------------------------------------------------------------------------------------
FURNITURE
05/11/1999 Architex International Furniture 1,260.00
05/11/1999 HBF Reception Desk and Chairs 5,493.60
06/23/1999 Corp. Office Systems Chairs 9,000.00
06/23/1999 KI Furniture 8,309.10
06/23/1999 Corp. Office Systems Help Desk Furniture 34,540.00
02/02/2000 Corp. Office Systems Conference room table & credenza 3,596.93
02/16/2000 Tradetec Skyline Dislpay exhibit to be used at conferences 3,800.00
02/28/2000 Tradetec Skyline Display exhibit to be used at conferences Balance Due 4,274.89
02/28/2000 Tradetec Skyline Competitive Discount (960.00)
------------
Total Furniture 69,314.52
------------
SCHEDULE F
Contracts 1998 - 1999
Ameritech Corp. - Server Support
Ameritech Corp. - Database Administration
Ameritech Corp. - Network Support
Ameritech Corp. - Operational Support
Boise Cascade - Network Design and Implementation
Boise Cascade - Application Design and Implementation
Dominick's Finer Foods - Network Support
Dominick's Finer Foods - Unix Admin Support
Dominick's Finer Foods - MVS to OS390 Conversion
Xxxxxxx Higher Education - POS Dial-in Software
Goodyear Tire and Rubber - Member Dial-in Support
XxXxxxxx-Xxxx - Fax System Support
Contracts 1999 - Current
Ameritech Corp. - Network Support
Central Bank and Trust - Application Software
Central Bank and Trust - Application Outsourcing
I-Car - Network Support
I-Car - Application Support, SQL Server
Safeway Food and Drugs - Network Support for Dominick's
Safeway Food and Drugs - Operational Support for Dominick's
Safeway Food and Drugs - Warehouse Management Application Support for
Dominick's
Safeway Food and Drugs - Heritage System Support for Dominick's
Safeway Food and Drugs - Tandem Support for Randall's
Safeway Food and Drugs - Warehouse Management Application Support for
Randall's
Safeway Food and Drugs - WebFood Application Development
Hi-Tech Solutions - Operations Support
IT Associates - Network Support
Technology Resource Group - Midas Operations
True North Communications - IP Dialer Software
Stored Value Signed Customers -
Bearco McDonalds
The Wet Spot
The Water's Edge
Mia Cucina
Defaulted Contracts:
None
Material Debts/Liabilities:
Labor Dispute filed by Xxxxx Xxxxxx, former employee, regarding vacation pay.
Dispute filed with Chicago attorney Xxxxx X. XxXxx by Xxxxx Xxxxxxxx, former
employee, regarding severance and expenses.
Potential dispute with Xxxxx Xxxxxx, former employee, regarding severance.
Payroll taxes (past due amounts to be paid within 30 days after closing).
SAFE SYSTEMS, INC.
SCHEDULE G
Vacation Vacation
Hire Date 2000 (hours) 2001 (hours)
EMPLOYEES
---------
Xxxxx, Xxxxx Administrative 11/01/99 21 120
Xxxxxxxx, Xxxxx Administrative 11/01/99 0 000
Xxxxxxx, Xxxxxxx X Help Desk 06/21/99
Xxxxx, Xxxxxx Help Desk 01/29/99
Xxxxxxx, Xxxxxx M Help Desk 03/24/99 36 80
Xxxxxxxx {ee}, Xxxxxxx M Help Desk 09/13/99 32 120
Xxxxxxx, Xxxx L Help Desk 11/02/99
Xxxxx, Xxxx X. Help Desk 08/17/99
Xxxxx, Xxxxxx X. Help Desk 03/23/98
Xxxxxxxxx, Xxx Special Projects/Account Rep 01/15/01 120
Xxxxxxxx, Xxxxx X Special Projects 10/01/98 40 80
Xxxxxxxxx, Xxxxxx X. Information Services 09/01/98 160 160
Xxxxxxx {ee}, Xxxxx L Sr. Consultant 11/27/98 0 120
Xxxxxxx, Xxxx X Xx. Applications Programmer 10/25/99 56 120
Xxxxxxx, Xxxxxx X Director, IT Services 11/08/99 104 160
XxXxxxx, Xxxxxxx Business Analyst 01/03/00 56 160
Xxxxxxxx, Xxxxxx X Xx. Consultant 02/28/00 40 120
Xxxxxxxx, Xxxxxx X Xx. Applications Programmer 11/01/99 32 120
Xxxxxxx, Xxxxx X Xx. Consultant 02/02/00 64 160
Xxxxxxxxxxxxxx, Xxxx J Director, IT Apps and Systems 09/13/99 8 120
Xxxxxxxxx, Xxxxx Xx. Consultant 06/19/00 0 160
Xxxxxxx, Xxxxx Xx. Consultant 08/15/00 0 120
Awdziejczyk, Xxxxxx X. Operations Analyst 03/23/99 65.5 000
Xxxxxx, Xxxxxxx L Operations Mgr 03/24/99 8 160
Xxxxxxx, Xxxxxxx X Xx. Operations Analyst 03/24/99 48 120
Vujovic., Sasha Operations Analyst 03/24/99 18 120
Xxxxxx, Xxxxxxx Sales & Marketing 10/01/98 8 80
Xxxxxxxxx, Xxxx Sales & Marketing 01/06/00 0 60
CONTRACTORS
Xxxxxxx, Xxx Applications Consultant 10/01/98
SCHEDULE H
TruServ Corporation XxXxxxxx-Xxxx Supply Company
0000 Xxxx Xxxx Xxxxxx 000 Xxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxxx Elmhurst, Illinois
Xxxxxx Xxxxxxx Xxxx Xxxxxx
000 000 0000 000 000 0000
Ameritech True North Communications Inc
0000 Xxxxxxxxx Xxxxx 101 East Erie
Schaumburg, Illinois Chicago, Illinois
Xxxxx Pens Xxxxx Xxxxxxxx
000 000 0000 000 000 0000
Boise Cascade Office Supply Technology Resource Group
Itasca, Illinois 000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxx Xxxxxxx Louisville, Colorado
000 000 0000 Xxxxxxx Xxxxx
847 291 4319
Safeway Food and Drug
2800 Ygnacio Valley Xxxxxxx Higher Education Group
Walnut Creek, California 0000 Xxxxx Xxxxx
Xxxxxx Xxxx Xxx Xxxxx, Xxxxxxxx
000 000 0000 Xxxx Xxxxxxxx
000 000 0000
Central Bank and Trust
000 X. 00xx Xxxxxx Goodyear Tire and Rubber
Hutchinson, Kansas 0000 X. Xxxxxx Xxxxxx
Xxxxx Xxxx Xxxxx, Xxxx
000 000 0000
000 000 0000
I-Car Corporation
0000 Xxxxxxxxx Xxxx, #000 XX Associates
Rolling Meadows, Illinois 0000 Xxxxx Xxxx Xxxxxx, Xxxxx 000
J. Xxxxxx Xxxxxx Naperville, Illinois
847 590 1191 Xxxxxxx Xxxx
000 000 000
Hi-Tech Solutions
Xxx XxxXxxxxxx Xxxxx, Xxxxx 000
Xxx Xxxxx Xxxxxxx, Xxxxxxxx
Xxxxxx Xxxxxxxxxx
000 000 0000
