Exhibit 2.1
STOCK PURCHASE AGREEMENT
AMONG
RESEARCH ENGINEERS, INC.
R-CUBE TECHNOLOGIES, INC.
AND
XXXXXXX X. XXXXX
DATED AS OF
JANUARY 18, 1999
TABLE OF CONTENTS
DESCRIPTION PAGE NO.
----------- --------
1. PURCHASE AND SALE OF SHARES......................................1
1.1 Purchase and Sale. ........................................1
1.2 Purchase Price. ...........................................1
1.3 Adjustment to Purchase Price. .............................1
1.4 Payment of Purchase Price. ................................1
1.5 Review of Final Balance Sheet. ............................2
2. REPRESENTATIONS AND WARRANTIES OF R-CUBE AND SELLERS.............2
2.1 Organization; Good Standing; Qualification and Power. .....2
2.2 Capital Structure..........................................3
2.2.1 Stock. ..............................................3
2.2.2 No Other Commitments. ...............................3
2.3 Authority..................................................3
2.3.1 Corporate Action. ...................................3
2.3.2 Sellers' Authority. .................................3
2.3.3 No Conflict. ........................................3
2.3.4 Governmental Consents. ..............................4
2.4 Financial Statements. .....................................4
2.5 Compliance with Applicable Laws. ..........................4
2.6 Insurance. ................................................4
2.7 Litigation. ...............................................5
2.8 Employee Benefits..........................................5
2.9 Absence of Undisclosed Liabilities. .......................6
2.10 Absence of Certain Changes or Events. .....................6
2.11 No Defaults. ..............................................7
2.12 Certain Agreements. .......................................7
2.13 Taxes......................................................8
2.14 Intellectual Property. ...................................10
2.15 Fees and Expenses. .......................................10
2.16 Environmental Matters.....................................10
2.17 [Intentionally Omitted]. .................................10
2.18 Disclosure. ..............................................10
2.19 Restrictions on Business Activities. .....................10
2.20 Accounts Receivable.......................................10
2.21 Personal Property. .......................................11
2.22 Real Property. ...........................................11
2.23 Warranties. ..............................................11
2.24 Contracts. ...............................................11
2.25 No Goods or Products. ....................................11
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3. REPRESENTATIONS AND WARRANTIES OF REI...........................11
3.1 Organization; Good Standing; Qualification and Power. ....11
3.2 Capital Structure.........................................12
3.2.1 Stock, Options and Warrants. .......................12
3.2.2 No Other Commitments. ..............................12
3.3 Authority.................................................12
3.3.1 Corporate Action. ..................................12
3.3.2 No Conflict. .......................................12
3.3.3 Governmental Consents. .............................13
3.4 SEC Documents.............................................13
3.4.1 SEC Reports. .......................................13
3.4.2 Financial Statements. ..............................13
3.5 Litigation. ..............................................13
3.6 Fees and Expenses. .......................................14
3.7 Disclosure. ..............................................14
3.8 Financial Capacity........................................14
4. R-CUBE AND SELLERS' COVENANTS...................................14
4.1 Notification of Changes. .................................14
4.2 Maintenance of Business. .................................14
4.3 Conduct of Business. .....................................14
4.4 Regulatory Approvals. ....................................16
4.5 Necessary Consents. ......................................16
4.6 Access to Information. ...................................16
4.7 Satisfaction of Conditions Precedent. ....................17
4.8 Confidentiality. .........................................17
4.9 Cooperation in Review of R-CUBE Financial Statements. ....17
5. REI COVENANTS...................................................17
5.1 Regulatory Approvals. ....................................17
5.2 Necessary Consents. ......................................17
5.3 Satisfaction of Conditions Precedent. ....................17
5.4 Confidentiality. .........................................18
6. EMPLOYEE MATTERS................................................18
7. INDEMNIFICATION OF THE PARTIES..................................18
7.1 Indemnification by Sellers................................18
7.2 Indemnification by REI....................................19
7.3 Manner of Indemnification. ...............................19
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8. CLOSING.........................................................19
8.1 Closing Date. ............................................19
8.2 Deliveries by R-CUBE and Sellers at the Closing. .........19
8.3 Delivery by REI at the Closing. ..........................20
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF R-CUBE
AND SELLER......................................................20
9.1 Accuracy of Representations and Warranties. ..............20
9.2 Covenants. ...............................................20
9.3 Compliance with Law. .....................................20
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF REI......................20
10.1 Accuracy of Representations and Warranties. ..............21
10.2 Covenants. ...............................................21
10.3 Completion of Due Diligence...............................21
10.4 Absence of Material Adverse Change. ......................21
10.5 Compliance with Law. .....................................21
10.6 Documents. ...............................................21
10.7 Corporate Opinion. .......................................22
10.8 Other Agreements..........................................22
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF REI,
R-CUBE AND SELLER...............................................22
11.1 Government Consents. .....................................22
11.2 No Legal Action. .........................................22
12. TERMINATION OF AGREEMENT........................................22
12.1 Termination. .............................................22
12.2 Notice of Termination. ...................................23
12.3 Effect of Termination. ...................................23
13. NON-COMPETITION.................................................23
13.1 Definitions...............................................23
13.2 Non-Solicitation of Employees. ...........................24
13.3 Non-Solicitation of Customers. ...........................24
13.4 Additional Agreements.....................................25
13.5 Remedies; Enforceability..................................25
14. SURVIVAL OF REPRESENTATIONS, WARRANTIES
AND COVENANTS...................................................26
15. MISCELLANEOUS...................................................26
15.1 Governing Law. ...........................................26
15.2 Assignment; Binding Upon Successors and Assigns. .........26
15.3 Severability. ............................................26
15.4 Counterparts. ............................................26
iii.
15.5 Other Remedies. ..........................................26
15.6 Amendment and Waivers. ...................................26
15.7 Expenses. ................................................27
15.8 Attorneys' Fees. .........................................27
15.9 Notices. .................................................27
15.10 Construction of Agreement. ...............................28
15.11 No Joint Venture. ........................................28
15.12 Further Assurances. ......................................28
15.13 Absence of Third Party Rights. ...........................28
15.14 Entire Agreement. ........................................28
iv.
STOCK PURCHASE AGREEMENT
THIS STOCK PURCHASE AGREEMENT ("Agreement") is entered into as of this
18th day of January, 1999, among Research Engineers, Inc., a Delaware
corporation ("REI"), R-CUBE Technologies, Inc., a California corporation
("R-CUBE"), and Xxxxxxx X. Xxxxx, an individual ("Seller").
RECITALS
A. Xxxxxxxxx Xxxxx Xxxxxxxxx, an individual, and Xxxxxxx Xxx Xxxxxx, an
individual (collectively, the "Other Sellers," and together with Seller,
"Sellers"), own, in the aggregate, all of the issued and outstanding shares (the
"Shares") of capital stock of R-CUBE.
B. Seller owns 1,100,000 of the Outstanding Shares ("Seller's Shares").
C. REI desires to purchase from Sellers, and Sellers desire to sell to
REI, the Outstanding Shares on the terms and conditions set forth in this
Agreement and in similar Stock Purchase Agreements (the "Other Agreements") to
be negotiated and entered into between REI and the Other Sellers as of the date
of this Agreement.
AGREEMENT
NOW, THEREFORE, the parties to this Agreement agree as follows:
1. PURCHASE AND SALE OF SHARES.
1.1 Purchase and Sale. Subject to the terms and conditions set forth
herein, at the Closing (as defined in Section 8 below), Seller shall
transfer, convey, assign and deliver Seller's Shares to REI, and REI shall
acquire, purchase and accept Seller's Shares from Seller.
1.2 Purchase Price. Subject to the adjustments to be made in
accordance with the provisions of Sections 1.3 through 1.5, the purchase
price for Seller's Shares is $1,066,272 (the "Purchase Price").
1.3 Adjustment to Purchase Price. The Purchase Price shall be adjusted
upward by 45.96% of the amount, if any, that the shareholders' equity of
R-CUBE ("Final Shareholders' Equity") as shown on R-CUBE's balance sheet
("Final Balance Sheet") to be prepared by R-CUBE's accountants as at the
Closing Date (defined in Section 8.1) and delivered to REI at the Closing
exceeds $500,000.
1.4 Payment of Purchase Price. The Purchase Price shall be paid by REI
to Seller as follows:
(1) At the Closing,REI shall pay to Seller the Purchase Price; and
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(2) Subject to Section 1.5, within 30 days after the Closing
Date, REI shall pay to Seller in cash the amount of any upward
adjustment to the Purchase Price made pursuant to Section 1.3.
1.5 Review of Final Balance Sheet. REI and its representatives shall
have 15 days to review the Final Balance Sheet. If REI disagrees with
R-CUBE's calculation of the Final Shareholders' Equity, REI shall within 15
days after the Closing Date give written notice to Sellers of such
disagreement specifying in reasonable detail, insofar as possible, the
nature and extent of the disagreement. If REI and Sellers are unable to
resolve any such disagreement within 15 days after REI gives Sellers
notice, the disagreement shall be referred for final determination to any
accounting firm of national reputation as may be reasonably acceptable to
REI and Sellers. REI and Sellers may submit to the accounting firm any
facts that they deem relevant to the determination, and the determination
of the accounting firm shall be conclusive, non-appealable and binding upon
REI and Sellers for all purposes. Any necessary upward adjustment
determined by the accounting firm shall be payable in cash by REI within
three days after REI has been notified of such determination. REI and
Sellers agree that the procedures established by Sections 1.2 through 1.5
shall constitute the exclusive procedures for determining the consideration
to be paid by REI to Sellers for the Shares. Costs incurred pursuant to
this Section 1.5 shall be borne equally by REI and Sellers.
2. REPRESENTATIONS AND WARRANTIES OF R-CUBE AND SELLERS.
Except as set forth in a schedule dated the date of this Agreement
and delivered by R-CUBE and Seller to REI concurrently herewith ("Disclosure
Schedule") specifically identifying the Section of this Agreement requiring the
delivery of such disclosure, R-CUBE and Seller represent and warrant to REI as
set forth below. In this Agreement, any reference to any event, change or effect
being "material" with respect to any entity or group of entities means any
material event, change or effect related to the condition (financial or
otherwise), properties, assets, liabilities, businesses, operations, results of
operations or prospects of such entity or group of entities taken as a whole. In
this Agreement, the term "Material Adverse Effect" used in connection with a
party or any of that party's subsidiaries means any event, change or effect that
is materially adverse to the condition (financial or otherwise), properties,
assets, liabilities, businesses, operations, results of operations or prospects
of that party and its subsidiaries, taken as a whole; provided, however, that a
Material Adverse Effect shall not include: (a) any adverse effect resulting from
conditions affecting the engineering software industry as a whole or the United
States economy as a whole; (b) a failure by R-CUBE to meet internal earnings or
revenue projections; or (c) any disruption of customer or supplier relationships
arising primarily out of or resulting primarily from actions contemplated by the
parties in connection with, or which is primarily attributable to the
announcement of this Agreement and the transactions contemplated hereby, to the
extent attributable thereto.
2.1 Organization; Good Standing; Qualification and Power. R-CUBE is a
corporation duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, has all requisite corporate
power and authority to own, lease and operate its properties and to carry
on its business as now being conducted, and is duly qualified and in good
standing to do business in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties makes qualification
necessary, other than in jurisdictions where the failure to qualify would
not have a Material Adverse Effect. R-CUBE does not own, directly or
indirectly,
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shares of capital stock of any other corporation or any equity interest in
any other entity, nor does R-CUBE control, directly or indirectly, any
other corporation, association or business organization. R-CUBE has made
available to REI or its counsel complete and correct copies of the articles
of incorporation and bylaws of R-CUBE, in each case as amended to the date
of this Agreement, and copies of all minutes of meetings and actions by
written consent of shareholders, directors and board committees of R-CUBE.
2.2 Capital Structure.
2.2.1 Stock. The authorized capital stock of R-CUBE consists of
10,000,000 shares of common stock, no par value per share ("R-CUBE
Common Stock"). As of the date of this Agreement, 3,300,000 shares of
R-CUBE Common Stock are issued and outstanding. All outstanding shares
of the capital stock of R-CUBE are validly issued, fully paid and
nonassessable, are not subject to preemptive rights and are owned by
Sellers free and clear of any liens, security interests, pledges,
agreements, claims, charges or encumbrances.
2.2.2 No Other Commitments. There are no options, warrants,
calls, rights, commitments, conversion rights or agreements of any
character to which R-CUBE is a party or by which R-CUBE is bound
obligating R-CUBE to issue, deliver or sell, or cause to be issued,
delivered or sold, any shares of capital stock of R-CUBE or securities
convertible into or exchangeable for shares of capital stock of
R-CUBE, or obligating R-CUBE to grant, extend or enter into any
option, warrant, call, right, commitment, conversion right or
agreement. There are no voting trusts or other agreements or
understandings to which R-CUBE or any Seller is a party with respect
to the voting of the capital stock of R-CUBE.
2.3 Authority.
2.3.1 Corporate Action. R-CUBE has all requisite corporate power
and authority to enter into this Agreement and to perform its
obligations hereunder and to consummate the transactions contemplated
by this Agreement. The execution and delivery of this Agreement by
R-CUBE and the consummation by R-CUBE of the transactions contemplated
hereby have been duly authorized by all necessary corporate action on
the part of R-CUBE. This Agreement has been duly executed and
delivered by R-CUBE, and this Agreement is the valid and binding
obligation of R-CUBE, enforceable in accordance with its terms, except
that such enforceability may be subject to (i) bankruptcy, insolvency,
reorganization or other similar laws affecting or relating to
enforcement of creditors' rights generally and (ii) general equitable
principles.
2.3.2 Sellers' Authority. Each of Sellers has full power and
capacity to enter into this Agreement and the Other Agreements. This
Agreement and the Other Agreements have been duly executed and
delivered by Sellers and this Agreement and the Other Agreement are
the valid and binding obligation of Sellers, enforceable in accordance
with their terms, except that enforceability may be subject to (i)
bankruptcy, insolvency, reorganization or other similar laws affecting
or relating to enforcement of creditors' rights generally and (ii)
general equitable principles.
2.3.3 No Conflict. Neither the execution, delivery and
performance of this Agreement, nor the consummation of the
transactions contemplated hereby nor compliance with the
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provisions hereof will conflict with, or result in any violations of,
or cause a default (with or without notice or lapse of time, or both)
under, or give rise to a right of termination, amendment, cancellation
or acceleration of any obligation contained in, or the loss of any
material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the material
properties or assets of R-CUBE under, any term, condition or provision
of (x) the articles of incorporation or bylaws of R-CUBE or (y) any
loan or credit agreement, note, bond, mortgage, indenture, lease or
other material agreement, judgment, order, decree, statute, law,
ordinance, rule or regulation applicable to R-CUBE or its properties
or assets, other than any such conflicts, violations, defaults,
losses, liens, security interests, charges, or encumbrances which,
individually or in the aggregate, would not have a Material Adverse
Effect.
2.3.4 Governmental Consents. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (each a
"Governmental Entity"), is required to be obtained by R-CUBE in
connection with the execution and delivery of this Agreement or the
consummation of the transactions contemplated hereby.
2.4 Financial Statements. R-CUBE has furnished to REI copies of: (a)
the unaudited balance sheets of R-CUBE at December 31, 1996, 1997 and 1998,
and the related statements of income for the periods then ended. Prior to
the Closing, R-CUBE shall furnish to REI copies of R-CUBE's audited balance
sheet at December 31, 1998 and the related statement of income for the
period then ended. All financial statements referred to in this Section 2.4
("R-CUBE Financial Statements") are or will be complete and correct, have
been prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the respective periods, and fairly
present or will fairly present the financial condition of R-CUBE as at the
respective dates thereof and the results of operation of R-CUBE for the
respective periods covered by the statements of income contained in
therein. R-CUBE does not have any material obligations or liabilities,
contingent or otherwise, not fully disclosed by the R-CUBE Financial
Statements.
2.5 Compliance with Applicable Laws. The business of R-CUBE is not
being conducted in violation of any law, ordinance, regulation, rule or
order of any Governmental Entity where the violation would have a Material
Adverse Effect. R-CUBE has not been notified by any Governmental Entity
that any investigation or review with respect to R-CUBE is pending or
threatened, nor has any Governmental Entity notified R-CUBE of its
intention to conduct an investigation or review. R-CUBE has all permits,
licenses and franchises from Governmental Entities required to conduct its
business as now being conducted, except for those whose absence would not
have a Material Adverse Effect.
2.6 Insurance. R-CUBE maintains and at all times since January 1, 1997
has maintained general liability insurance that R-CUBE believes to be
reasonably prudent for its business. The Disclosure Schedule contains a
complete and correct list of all insurance policies maintained by R-CUBE.
R-CUBE has delivered or made available to REI complete and correct copies
of all such policies, together with all riders and amendments thereto.
These policies are in full force and effect, and all premiums due thereon
have been paid. R-CUBE has complied in all material respects with the terms
and provisions of the policies. In the opinion of R-CUBE reasonably formed
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and held, there is no reasonable basis on which a claim should or could be
made under any such policy.
2.7 Litigation. There is no suit, action, arbitration, demand, claim
or proceeding pending or, to the best knowledge of R-CUBE and Sellers,
threatened against R-CUBE, nor is there any judgment, decree, injunction,
rule or order of any Governmental Entity or arbitrator outstanding against
R-CUBE that, individually or in the aggregate, could reasonably be expected
to have a Material Adverse Effect. R-CUBE has made available to REI or its
counsel correct and complete copies of all correspondence prepared by its
counsel for R-CUBE's accountants in connection with the last two completed
reviews of R-CUBE's financial statements and any correspondence since the
date of the last review.
2.8 Employee Benefits.
(1) R-CUBE has made available to REI a list of all employees of
R-CUBE and their salaries as of the date of this Agreement. R-CUBE has
made available to REI copies or descriptions of all written or formal
plans or agreements involving direct or indirect compensation or
benefits (including any employment agreements entered into between
R-CUBE and any employee of R-CUBE, but excluding workers'
compensation, unemployment compensation and other government-mandated
programs) currently or previously maintained, contributed to or
entered into by R-CUBE under which R-CUBE has any present or future
obligation or liability (collectively, "R-CUBE Employee Plans").
Copies of all R-CUBE Employee Plans (and, if applicable, related trust
agreements) and all amendments thereto and written interpretations
thereof (including summary plan descriptions) have been made available
to REI or its counsel. No contributions are due or past due from
R-CUBE with respect to any of the R-CUBE Employee Plans. To R-CUBE's
and Sellers' knowledge, each of the R-CUBE Employee Plans has been
maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations that
are applicable to the R-CUBE Employee Plans except for noncompliance
which would not have a Material Adverse Effect.
(2) R-CUBE has made available to REI a list of each employment,
severance or other similar contract, arrangement or policy and each
plan or arrangement providing for insurance coverage (including any
self-insured arrangements), workers' benefits, vacation benefits,
severance benefits, disability benefits, death benefits,
hospitalization benefits, retirement benefits, deferred compensation,
profit-sharing, bonuses, stock options, stock purchase, phantom stock,
stock appreciation or other forms of incentive compensation or
post-retirement insurance, compensation or benefits for employees,
consultants or directors which (i) is not one of the R-CUBE Employee
Plans, (ii) is entered into, maintained or contributed to, as the case
may be, by R-CUBE and (iii) covers any employee or former employee of
R-CUBE. The contracts, plans and arrangements described in this
paragraph 2.8(d) are referred to collectively as the "R-CUBE Benefit
Arrangements." To R-CUBE's and Sellers' knowledge, each of the R-CUBE
Benefit Arrangements has been maintained in substantial compliance
with its terms and with the requirements prescribed by any and all
statutes, orders, rules and regulations which are applicable to R-CUBE
Benefit Arrangements. R-CUBE has made available to REI or its counsel
a complete and correct copy or description of each of the R-CUBE
Benefit Arrangements.
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(3) There has been no amendment to, written interpretation or
announcement by R-CUBE relating to, or change in employee
participation or coverage under, any of the R-CUBE Employee Plans or
R-CUBE Benefit Arrangements that would increase materially the expense
of maintaining the R-CUBE Employee Plans or R-CUBE Benefit
Arrangements above the level of the expense incurred in respect
thereof for the fiscal year ended December 31, 1998.
(4) To R-CUBE's and Sellers' knowledge, R-CUBE is in compliance
in all material respects with all applicable laws, agreements and
contracts relating to employment, employment practices, wages, hours,
and terms and conditions of employment.
2.9 Absence of Undisclosed Liabilities. Except as disclosed on the
Disclosure Schedule, at December 31, 1998 (the "R-CUBE Balance Sheet
Date"), (i) R-CUBE had no liabilities or obligations of any nature (matured
or unmatured, fixed or contingent) which were material to R-CUBE, taken as
a whole, and were not provided for in the unaudited December 31, 1998
balance sheet (the "R-CUBE Balance Sheet"), a copy of which has been
delivered to REI; and (ii) all reserves established by R-CUBE and set forth
in the R-CUBE Balance Sheet were reasonably adequate.
2.10 Absence of Certain Changes or Events. Since the R-CUBE Balance
Sheet Date there has not occurred:
(1) any change in the condition (financial or otherwise),
properties, assets, liabilities, businesses, operations, results of
operations or prospects of R-CUBE taken as a whole that could
reasonably constitute a Material Adverse Effect;
(2) any amendments or changes in the articles of incorporation or
bylaws of R-CUBE;
(3) any damage, destruction or loss, whether covered by insurance
or not, that could reasonably constitute a Material Adverse Effect;
(4) any redemption, repurchase or other acquisition of shares of
R-CUBE Common Stock by R-CUBE (other than pursuant to arrangements
with terminated employees or consultants), or any declaration, setting
aside or payment of any dividend or other distribution (whether in
cash, stock or property) with respect to R-CUBE Common Stock;
(5) any material increase in or modification of the compensation
or benefits payable or to become payable by R-CUBE to any of its
directors or employees, except in the ordinary course of business
consistent with past practice;
(6) any material increase in or modification of any bonus,
pension, insurance or any of the R-CUBE Employee Plans or R-CUBE
Benefit Arrangements (including, but not limited to, the granting of
stock options, restricted stock awards or stock appreciation rights)
made to, for or with any of its employees, other than in the ordinary
course of business consistent with past practice;
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(7) any acquisition or sale of a material amount of property or
assets of R-CUBE, other than in the ordinary course of business
consistent with past practices;
(8) any alteration in any term of any outstanding security of
R-CUBE;
(9) any (A) incurrence, assumption or guarantee by R-CUBE of any
debt for borrowed money; (B) issuance or sale of any securities
convertible into or exchangeable for debt securities of R-CUBE; or (C)
issuance or sale of options or other rights to acquire from R-CUBE,
directly or indirectly, debt securities of R-CUBE or any securities
convertible into or exchangeable for any such debt securities;
(10) any creation or assumption by R-CUBE of any mortgage,
pledge, security interest or lien or other encumbrance on any asset;
(11) any making of any loan, advance or capital contribution to
or investment in any person other than (i) travel loans or advances
made in the ordinary course of business of R-CUBE, (ii) other loans
and advances in an aggregate amount which does not exceed $25,000
outstanding at any time and (iii) purchases on the open market of
liquid, publicly traded securities;
(12) any entering into, amendment of, relinquishment, termination
or non-renewal by R-CUBE of any contract, lease transaction,
commitment or other right or obligation other than in the ordinary
course of business;
(13) any transfer or grant of an R-CUBE intellectual property
right, other than those transferred or granted in the ordinary course
of business;
(14) any labor dispute or charge of unfair labor practice (other
than routine individual grievances) or, to R-CUBE and Sellers'
knowledge, any activity or proceeding by a labor union or
representative thereof to organize any employees of R-CUBE or any
campaign being conducted to solicit authorization from employees to be
represented by the labor union; or
(15) any agreement or arrangement made by R-CUBE to take any
action which, if taken prior to the date hereof, would have made any
representation or warranty set forth in this Agreement untrue or
incorrect unless otherwise disclosed.
2.11 No Defaults. R-CUBE is not in default under, and there exists no
event, condition or occurrence which, after notice or lapse of time, or
both, would constitute a default by R-CUBE under, any contract or agreement
to which R-CUBE is a party and which would, if terminated or modified, have
a Material Adverse Effect.
2.12 Certain Agreements. Neither the execution and delivery of this
Agreement nor the consummation of the transactions contemplated hereby will
(i) result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute, bonus or otherwise) becoming
due to any director or employee of R-CUBE from R-CUBE, under any of the
R-CUBE Employee Plans, R-CUBE Benefit Arrangements or otherwise, (ii)
materially increase
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any benefits otherwise payable under any of the R-CUBE Employee Plans, the
R-CUBE Benefit Arrangements or otherwise or (iii) result in the
acceleration of the time of payment or vesting of any benefits.
2.13 Taxes.
(1) For purposes of this Agreement, "Tax" or collectively "Taxes"
means any and all federal, state, local and foreign taxes, assessments
and other governmental charges, duties, impositions and liabilities,
including taxes based upon or measured by gross receipts, income,
profits, sales, use and occupation, and value added, ad valorem,
transfer, franchise, withholding, payroll, recapture, employment,
estimated, excise and property taxes, together with all interest,
penalties and additions imposed with respect to those amounts and any
obligations under any agreements or arrangements with any other person
with respect to those amounts and including any liability for taxes of
a predecessor entity.
(2) Except as set forth in the Disclosure Schedule:
(i) As of the Closing, R-CUBE will have prepared and
filed all required federal, state, local, and foreign
returns, estimates, information statements, and reports
relating to any and all Taxes ("Returns") concerning or
attributable to R-CUBE that are required to be filed by or
with respect to R-CUBE on or prior to the Closing, and each
of the Returns shall be, to the knowledge of R-CUBE and
Sellers, true, correct, and complete in all material
respects and shall have been completed in accordance with
applicable law;
(ii) As of the Closing, R-CUBE: (A) will have paid or
accrued in accordance with generally accepted accounting
principles all Taxes concerning or attributable to R-CUBE
relating to periods ending on or before the Closing
regardless of whether reflected on Returns and (B) will have
withheld with respect to their employees all federal and
state income taxes, FICA, FUTA, and other Taxes required to
be withheld;
(iii) R-CUBE has not been delinquent in the payment of
any Tax nor is there any Tax deficiency outstanding,
proposed or assessed against R-CUBE, nor has R-CUBE executed
any waiver of the statute of limitations on or extending the
period for the assessment or collection of any Taxes;
(iv) No audit or other examination of any Return of
R-CUBE is presently in progress, nor has R-CUBE been
notified of any request for an audit or examination;
(v) R-CUBE has no liabilities for unpaid federal,
state, local and foreign Taxes which have not been accrued
or reserved in accordance with generally accepted accounting
principles on the R-CUBE Balance Sheet;
(vi) R-CUBE has made available to REI and its counsel
copies of all federal and state income and all state sales
and use Tax Returns for all periods ending on or after
December 31, 1995;
8
(vii) There are (and as of immediately following the
Closing there will be) no liens, pledges, charges, claims,
security interests, or other encumbrances of any sort
("Liens") on the assets of R-CUBE relating or attributable
to Taxes other than liens for sales and payroll taxes not
yet due and payable;
(viii) R-CUBE has no knowledge of any reasonable basis
for the assertion of any claim relating or attributable to
Taxes which, if adversely determined, would result in any
Lien on the assets of R-CUBE;
(ix) None of the assets of R-CUBE is property that is
required to be treated as owned by any other person pursuant
to the "safe harbor lease" provisions of former Code Section
168(f)(8), and none of the assets is treated as "tax-exempt
use property" within the meaning of Code Section 168(h);
(x) R-CUBE has not filed any consent agreement under
Code Section 341(f) or agreed to have Code Section 341(f)
apply to any disposition of a "subsection (f) asset" (as
defined in Code Section 341(f)(4)) owned by R-CUBE;
(xi) R-CUBE has not been included in any
"consolidated," "unitary," or "combined" Return provided for
under the law of the United States or any state or locality
with respect to Taxes for any taxable period;
(xii) R-CUBE is not a party to a tax sharing,
allocation, indemnification or similar agreement or
arrangement, and R-CUBE does not owe any amount under any
agreement or arrangement;
(xiii) No Return of R-CUBE contains a disclosure
statement under Code Section 6662 (or predecessor provision)
or any similar provision of state, local, or foreign law;
(xiv) R-CUBE is not and has not been at any time a
"United States real property holding corporation" within the
meaning of Code Section 897(c)(2);
(xv) No indebtedness of R-CUBE consists of "corporate
acquisition indebtedness" within the meaning of Code Section
279;
(xvi) R-CUBE has not taken any action not in accordance
with past practice that would have the effect of deferring
any Tax liability of R-CUBE from any period ending on before
the Closing Date to any taxable period ending after the
Closing Date;
(xvii) R-CUBE was not acquired in a "qualified stock
purchase" under Code Section 338(d)(3), and no elections
under Code Section 338(g), protective carryover basis
elections, or offset prohibition elections are applicable to
R-CUBE or any predecessor corporations; and
9
(xviii) The tax bases of the assets of R-CUBE for
purposes of determining future amortization, depreciation,
and other federal income tax deductions are accurately
reflected on the tax books and records of R-CUBE.
2.14 Intellectual Property. There are no patents, patent applications,
trademarks, service marks, trademark and service xxxx applications, trade
names and copyrights material to the lawful and efficient operation of the
business of R-CUBE as presently conducted and as presently proposed to be
conducted.
2.15 Fees and Expenses. Except as set forth on the Disclosure
Schedule, neither R-CUBE nor Sellers have paid or become obligated to pay
any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated by this Agreement. Sellers agree that
any such fees or commissions described in the preceding sentence shall be
the sole responsibility of Sellers, whether or not the Closing occurs.
2.16 Environmental Matters.
(1) To R-CUBE's and Seller's knowledge, none of the properties or
facilities of R-CUBE is in violation of any federal, state or local
law, ordinance, regulation or order relating to industrial hygiene or
to the environmental conditions on, under or about the properties or
facilities, including, but not limited to, soil and ground water
condition except where the violations would not constitute a Material
Adverse Effect. During the time that R-CUBE has owned or leased its
properties and facilities, neither R-CUBE nor, to R-CUBE's and
Sellers' knowledge, any third party, has released, used, generated,
manufactured or stored on, under or about the properties or facilities
or transported to or from the properties or facilities any hazardous
materials.
(2) During the time that R-CUBE has owned or leased its
properties and facilities, there has been no litigation brought or
threatened against R-CUBE by, or any settlement reached by R-CUBE
with, any party or parties alleging the presence, disposal, release or
threatened release of any hazardous materials on, from or under any of
the properties or facilities.
2.17 [Intentionally Omitted].
2.18 Disclosure. No representation or warranty made by R-CUBE or
Sellers in this Agreement or the Other Agreements, nor any document,
written information, written statement, financial statement, certificate or
exhibit prepared and furnished or to be prepared and furnished by Sellers,
R-CUBE or their representatives pursuant to this Agreement or the Other
Agreements or in connection with the transactions contemplated hereby or
thereby, when taken together, contains any untrue statement of a material
fact, or omits to state a material fact necessary to make the statements or
facts contained herein or therein not misleading in light of the
circumstances under which they were furnished.
2.19 Restrictions on Business Activities. There is no material
agreement, judgment, injunction, order or decree binding upon R-CUBE that
has or could reasonably be expected to have the effect of prohibiting or
materially impairing any business practice of R-CUBE,
10
any acquisition of property by R-CUBE or the conduct of business by R-CUBE
as currently conducted.
2.20 Accounts Receivable. The accounts receivable shown on the R-CUBE
Balance Sheet as of the R-CUBE Balance Sheet Date, or thereafter acquired
prior to the date hereof, have been and are (as the case may be)
collectible within 120 days from the Closing Date in amounts not less than
the aggregate amounts thereof carried on the books of R-CUBE reduced by the
reserves for discounts and bad debts taken on the R-CUBE Balance Sheet.
2.21 Personal Property. R-CUBE has good title, free and clear of all
title defects, objections and liens, including without limitation, leases,
chattel mortgages, conditional sales contracts, collateral security
arrangements and other title or interest-retaining arrangements, to all of
its machinery, equipment, furniture, inventory and other personal property.
All personal property used in the business of R-CUBE is in good operating
condition. All of the leases to personal property utilized in the business
of R-CUBE are valid and enforceable against R-CUBE and are not in default
by R-CUBE, or, to the knowledge of R-CUBE or Sellers, are any of the other
parties thereto in default thereof.
2.22 Real Property. R-CUBE does not own any real property. The
Disclosure Schedule contains a list of all leases for real property to
which R-CUBE is a party, the square footage leased with respect to each
lease and the expiration date of each lease. These leases are valid and
enforceable and are not in default. To the knowledge of R-CUBE and Sellers,
the real property leased or occupied by R-CUBE, the improvements located
thereon, and the furniture, fixtures and equipment relating thereto
(including plumbing, heating, air conditioning and electrical systems),
conform to any and all applicable health, fire, safety, zoning, land use
and building laws, ordinances and regulations. There are no outstanding
contracts made by R-CUBE for any improvements made to the real property
leased or occupied by R-CUBE that have not been paid for.
2.23 Warranties. R-CUBE has made no warranties or guarantees relating
to its services other than as implied or required by law. R-CUBE has no
warranty or indemnification obligations relating to patents or other
proprietary rights.
2.24 Contracts. The Disclosure Schedule lists all oral or written
agreements, notes, instruments or contracts to which R-CUBE is a party or
by which its assets or properties may be bound which involve the payment or
receipt of more than $25,000 (on an annual basis), or which have a term of
more than one year, or which involve intellectual property, or which are
employment or consulting agreements ("R-CUBE Contracts"). R-CUBE is not in
default in performance of its obligations under any material provisions of
the R-CUBE Contracts. Neither R-CUBE nor Sellers have any knowledge of any
violation of or default under any R-CUBE Contract by any other party
thereto or any knowledge of any intent by any other party to an R-CUBE
Contract not to perform its obligations under any R-CUBE Contract.
2.25 No Goods or Products. R-CUBE does not and has not developed,
sold, marketed or distributed any goods or products.
11
3. REPRESENTATIONS AND WARRANTIES OF REI.
REI hereby represents and warrants to R-CUBE and Seller that:
3.1 Organization; Good Standing; Qualification and Power. REI is a
corporation duly incorporated, organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, has all
requisite corporate power and authority to own, lease and operate its
properties and to carry on its business as now being conducted, and is duly
qualified and in good standing to do business in each jurisdiction in which
the nature of its business or the ownership or leasing of its properties
makes qualification necessary, other than in jurisdictions where the
failure to qualify would not have a Material Adverse Effect. REI has made
available to R-CUBE or its counsel complete and correct copies of the
certificate of incorporation and bylaws of REI, in each case as amended to
the date of this Agreement, and copies of all minutes of meetings and
actions by written consent of shareholders, directors and board committees
of REI.
3.2 Capital Structure.
3.2.1 Stock, Options and Warrants. The authorized capital stock
of REI consists of 20,000,000 shares of common stock, $.01 par value
per share ("REI Common Stock"), and 5,000,000 shares of Preferred
Stock, $.01 par value per share ("REI Preferred Stock"). At the close
of business on January 13, 1999, 5,680,710 shares of REI Common Stock
were issued and outstanding, and 599,850 shares of REI Common Stock
were reserved for issuance upon the exercise of outstanding options
("REI Options") and warrants ("REI Warrants") to purchase REI Common
Stock. No shares of REI Preferred Stock are issued or outstanding. All
outstanding shares of REI Common Stock are validly issued, fully paid
and nonassessable and not subject to preemptive rights. REI has made
available to R-CUBE true and correct copies of its 1996, 1997 and 1998
Stock Option Plans (each an "REI Plan" and collectively, the "REI
Plans").
3.2.2 No Other Commitments. Except for the REI Options and REI
Warrants disclosed in or pursuant to Section 3.2.1, there are no
options, warrants, calls, rights, commitments, conversion rights or
agreements of any character to which REI is a party or by which REI is
bound obligating REI to issue, deliver or sell, or cause to be issued,
delivered or sold, any shares of capital stock of REI or securities
convertible into or exchangeable for shares of capital stock of REI,
or obligating REI to grant, extend or enter into any such option,
warrant, call, right, commitment, conversion right or agreement. There
are no voting trusts or other agreements or understandings to which
REI is a party with respect to the voting of the capital stock of REI.
3.3 Authority.
3.3.1 Corporate Action. REI has all requisite corporate power and
authority to enter into this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement by REI and the
consummation by REI of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of REI.
This Agreement has been duly executed and delivered by REI, and this
Agreement is the valid and binding obligation of REI, enforceable in
12
accordance with its terms, except that enforceability may be subject
to (i) bankruptcy, insolvency, reorganization or other similar laws
affecting or relating to enforcement of creditors' rights generally
and (ii) general equitable principles.
3.3.2 No Conflict. Neither the execution, delivery and
performance of this Agreement, nor the consummation of the
transactions contemplated hereby nor compliance with the provisions
hereof will conflict with, or result in any violations of, or cause a
default (with or without notice or lapse of time, or both) under, or
give rise to a right of termination, amendment, cancellation or
acceleration of any obligation contained in, or the loss of any
material benefit under, or result in the creation of any lien,
security interest, charge or encumbrance upon any of the material
properties or assets of REI under, any term, condition or provision of
(x) the certificate of incorporation or bylaws of REI or (y) any loan
or credit agreement, note, bond, mortgage, indenture, lease or other
material agreement, judgment, order, decree, statute, law, ordinance,
rule or regulation applicable to REI or its respective properties or
assets, other than any such conflicts, violations, defaults, losses,
liens, security interests, charges or encumbrances which, individually
or in the aggregate, would not have a Material Adverse Effect.
3.3.3 Governmental Consents. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Entity is required to be obtained by REI in connection
with the execution and delivery of this Agreement or the consummation
of the transactions contemplated hereby.
3.4 SEC Documents.
3.4.1 SEC Reports. REI has made available to R-CUBE or its
counsel correct and complete copies of each report, schedule,
registration statement and definitive proxy statement filed by REI
with the Securities and Exchange Commission ("SEC") on or after
January 1, 1997 ("REI SEC Documents"), which are all the documents
(other than preliminary material) that REI was required to file with
the SEC on or after that date. As of their respective dates or, in the
case of registration statements, their effective dates (or if amended
or superseded by a filing prior to the date of this Agreement, then on
the date of such filing), none of the REI SEC Documents (including all
exhibits and schedules thereto and documents incorporated by reference
therein) contained any untrue statement of a material fact or omitted
to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and the REI SEC Documents
complied when filed in all material respects with the then applicable
requirements of the Securities Act or the Securities Exchange Act of
1934, as amended, as the case may be, and the rules and regulations
promulgated by the SEC thereunder. REI has filed all documents and
agreements which were required to be filed as exhibits to the REI SEC
Documents.
3.4.2 Financial Statements. The financial statements of REI
included in the REI SEC Documents complied as to form in all material
respects with the then applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, were
prepared in accordance with generally accepted accounting principles
applied on a consistent basis during the periods involved (except as
may have been indicated in the notes thereto or, in the case of the
unaudited statements, as permitted by Form 10-QSB promulgated by the
SEC) and fairly
13
present the financial position of REI as at the respective dates
thereof and the results of its operations and cash flows for the
respective periods then ended.
3.5 Litigation. There is no suit, action, arbitration, demand, claim
or proceeding pending or, to the best knowledge of REI, threatened against
REI in connection with or relating to the transactions contemplated by this
Agreement or of any action taken or to be taken in connection herewith or
the consummation of the transactions contemplated hereby.
3.6 Fees and Expenses. REI has not paid or become obligated to pay any
fee or commission to any broker, finder or intermediary in connection with
the transactions contemplated by this Agreement.
3.7 Disclosure. No representation or warranty made by REI in this
Agreement, nor any document, written information, written statement,
financial statement, certificate or exhibits prepared and furnished or to
be prepared and furnished by REI or its representatives pursuant hereto or
in connection with the transactions contemplated hereby, when taken
together, contains any untrue statement of a material fact, or omits to
state a material fact necessary to make the statements or facts contained
herein or therein not misleading in light of the circumstances under which
they were furnished.
3.8 Financial Capacity. REI has the financial capability to pay the
Purchase Price when due.
4. R-CUBE AND SELLERS' COVENANTS.
4.1 Notification of Changes. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination of this
Agreement in accordance with its terms, R-CUBE and Sellers will promptly
notify REI in writing (a) of any event occurring subsequent to the date of
this Agreement that would render any representation or warranty of R-CUBE
or any Seller contained in this Agreement or the Other Agreements, if made
on or as of the date of the event or the Closing Date, untrue or inaccurate
in any material respect, (b) of any Material Adverse Effect and (c) of any
breach by R-CUBE or any Seller of any covenant or agreement contained in
this Agreement or the Other Agreements.
4.2 Maintenance of Business. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination of this
Agreement in accordance with its terms, R-CUBE and Sellers will use their
reasonable commercial efforts to carry on and preserve R-CUBE's business
and its relationships with customers, suppliers, employees and others in
substantially the same manner as it has prior to the date hereof. If R-CUBE
or any Seller becomes aware of any material deterioration in the
relationship with any material customer, material supplier or key employee,
R-CUBE or that Seller will promptly bring that information to the attention
of REI.
4.3 Conduct of Business. During the period from the date of this
Agreement until the earlier of the Closing Date or the termination of this
Agreement in accordance with its terms, R-CUBE will, and Sellers will cause
R-CUBE to, continue to conduct its business and maintain its
14
business relationships in the ordinary and usual course and will not,
without the prior written consent of REI:
(1) borrow any money except for amounts that are not in the
aggregate material to the financial condition of R-CUBE, taken as a
whole;
(2) enter into any material transaction not in the ordinary
course of its business;
(3) encumber or permit to be encumbered any of its assets except
in the ordinary course of its business;
(4) dispose of any of its assets except in the ordinary course of
business consistent with past practice;
(5) enter into any material lease or contract for the purchase or
sale or license of any property, real or personal, except in the
ordinary course of business;
(6) fail to maintain its equipment and other assets in good
working condition and repair according in all material respects to the
standards it has maintained to the date of this Agreement, subject
only to ordinary wear and tear;
(7) pay (or make any oral or written commitments or
representations to pay) any bonus, increased salary or special
remuneration to any officer, employee or consultant (except for normal
salary increases consistent with past practices not to exceed 10% per
year) or enter into or vary the terms of any employment, consulting or
severance agreement with any person, pay any severance or termination
pay (other than payments made in accordance with plans or agreements
existing on the date hereof), grant any stock option or issue any
restricted stock, or enter into or modify any agreement or plan of the
type described in Section 2.8;
(8) change accounting methods;
(9) declare, set aside or pay any cash or stock dividend or other
distribution in respect of capital stock, or redeem or otherwise
acquire any of its capital stock (other than pursuant to arrangements
with terminated employees or consultants in the ordinary course of
business consistent with R-CUBE's past practice);
(10) amend or terminate any material contract, agreement or
license to which it is a party except those amended or terminated in
the ordinary course of its business, or which are not material in
amount or effect;
(11) alter in any way its manner of paying payables, collecting
receivables or ordering products and services;
(12) lend any amount to any person or entity, other than (i)
advances for travel and expenses which are incurred in the ordinary
course of business consistent with past
15
practice, not material in amount and documented by receipts for the
claimed amounts, or (ii) any loans pursuant to any R-CUBE 401(a) Plan;
(13) guarantee or act as a surety for any obligation, except for
obligations in amounts that are not material;
(14) waive or release any right or claim except for the waiver or
release of non-material claims in the ordinary course of business,
consistent with past practice or the waiver or release of rights or
claims set forth in the Disclosure Schedule;
(15) issue or sell any shares of its capital stock of any class
or any other of its securities, or issue or create any warrants,
obligations, subscriptions, options, convertible securities or other
commitments to issue shares of capital stock, or accelerate the
vesting of any outstanding option or other security;
(16) split or combine the outstanding shares of its capital stock
of any class or enter into any recapitalization or agreement affecting
the number or rights of outstanding shares of its capital stock of any
class or affecting any other of its securities;
(17) merge, consolidate or reorganize with, or acquire any
entity;
(18) conduct any negotiations or agreements of any kind with any
other parties with respect to the sale of the assets or the capital
stock of R-CUBE, or for the merger or sale of R-CUBE with or to any
other entity;
(19) amend its articles of incorporation or bylaws;
(20) license any intellectual property rights of R-CUBE except in
the ordinary course of business consistent with past practice;
(21) agree to any audit assessment by any tax authority;
(22) change any insurance coverage; or
(23) agree to do any of the things described in the preceding
clauses in this Section 4.3.
4.4 Regulatory Approvals. R-CUBE will promptly execute and file, or
join in the execution and filing of, any application or other document that
may be necessary in order to obtain the authorization, approval or consent
of any governmental body, federal, state, local or foreign, which may be
required, or which REI may reasonably request, in connection with the
consummation of the transactions contemplated by this Agreement. R-CUBE
will use its reasonable efforts to promptly obtain all such authorizations,
approvals and consents.
4.5 Necessary Consents. During the term of this Agreement, R-CUBE will
use its reasonable efforts to obtain such written consents and take such
other actions as may be necessary
16
or appropriate in addition to those set forth in Section 4.4 to allow the
consummation of the transactions contemplated hereby.
4.6 Access to Information. Upon the execution of a confidentiality
agreement, the form and substance of which is mutually acceptable to R-CUBE
and REI, R-CUBE and Sellers will allow REI and its agents reasonable access
to the files, books, records and offices of R-CUBE, including, without
limitation, any and all information relating to R-CUBE's taxes,
commitments, contracts, leases, licenses and real, personal and intangible
property and financial condition. R-CUBE and Sellers will cause R-CUBE's
accountants to cooperate with REI and its agents in making available to REI
all financial information reasonably requested, including, without
limitation, the right to examine all working papers pertaining to all tax
returns and financial statements prepared or reviewed by the accountants.
4.7 Satisfaction of Conditions Precedent. During the term of this
Agreement, R-CUBE and Sellers will use reasonable efforts to satisfy or
cause to be satisfied all the conditions precedent that are set forth in
Sections 10 and 11, and R-CUBE and Sellers will use their reasonable
efforts to cause the transactions contemplated by this Agreement to be
consummated.
4.8 Confidentiality. All information concerning REI or any of its
subsidiaries ("REI Subsidiaries") received by R-CUBE or any Seller (other
than that information which is a matter of public knowledge or which has
been published for public distribution or filed as public information with
any governmental authority) shall not at any time, except in connection
with this Agreement and the transactions contemplated hereby, be used for
the advantage of, or disclosed by, R-CUBE or any Seller to any third person
without the prior written consent of REI. R-CUBE and Sellers may disclose
the information on a confidential basis to their affiliates, employees,
officers, agents, auditors, investment bankers, consultants, counsel,
directors, present and prospective lenders, and state and federal
regulatory agencies. This covenant shall expire on completion of the
Closing; provided, however, that if the Closing does not occur, it shall
expire three years after the date of this Agreement.
4.9 Cooperation in Review of R-CUBE Financial Statements. R-CUBE and
Sellers shall cooperate fully with REI and its representatives in their
review of the R-CUBE Financial Statements and the Final Balance Sheet,
including providing access to the information referred to in Section 4.6
and any other information necessary in order to complete their review.
5. REI COVENANTS
5.1 Regulatory Approvals. REI will promptly execute and file, or join
in the execution and filing of, any application or other document that may
be necessary in order to obtain the authorization, approval or consent of
any governmental body, federal, state, local or foreign which may be
required, or which R-CUBE may reasonably request, in connection with the
consummation of the transactions contemplated by this Agreement. REI will
use its reasonable efforts to promptly obtain all such authorizations,
approvals and consents.
5.2 Necessary Consents. During the term of this Agreement, REI will
use its reasonable efforts to obtain such written consents and take such
other actions as may be necessary
17
or appropriate in addition to those set forth in Section 5.1 to allow the
consummation of the transactions contemplated hereby.
5.3 Satisfaction of Conditions Precedent. During the term of this
Agreement, REI will use its reasonable efforts to satisfy or cause to be
satisfied all the conditions precedent that are set forth in Sections 9 and
11, and REI will use its reasonable efforts to cause the transactions
contemplated by this Agreement to be consummated.
5.4 Confidentiality. All information concerning R-CUBE received by REI
(other than that information which is a matter of public knowledge or which
has been published for public distribution or filed as public information
with any governmental authority) shall not at any time, except in
connection with this Agreement and the transactions contemplated hereby, be
used for the advantage of, or disclosed by, REI to any third person without
the prior written consent of R-CUBE. REI may disclose the information on a
confidential basis to its affiliates, employees, officers, agents,
auditors, investment bankers, consultants, counsel, directors, present and
prospective lenders, and state and federal regulatory agencies and, as
provided elsewhere in this Agreement, may disclose such information in
press releases and like disclosures, filings with the SEC or other
governmental or self-regulatory agencies or as otherwise required. This
covenant shall expire on completion of the Closing; provided, however, that
if the Closing does not occur, it shall expire three years after the date
of this Agreement.
6. EMPLOYEE MATTERS
Following the Closing, all employees of R-CUBE will either (i)
continue to be employees of R-CUBE or (ii) be offered employment by REI. In
either case, those employees will be provided employment benefits that are
at least comparable to those they currently receive from R-CUBE and, if
necessary, R-CUBE or REI shall continue to sponsor those employees for the
purpose of maintaining such employees' United States resident alien status.
Notwithstanding the foregoing, REI makes no representation, warranty or
promise as to the length of time that any such employee will remain in the
employ of R-CUBE or REI following the Closing.
18
7. INDEMNIFICATION OF THE PARTIES.
7.1 Indemnification by Sellers
(1) Sellers shall, jointly and severally, indemnify, defend,
protect and hold harmless REI, R-CUBE, each of the REI Subsidiaries,
each of their respective successors and assigns and each of their
respective directors, officers, employees, agents and affiliates (each
an "REI Indemnified Party"), against all losses, claims, damages,
actions, suits, proceedings, demands, assessments, adjustments, costs
and expenses (including specifically, but without limitation,
reasonable attorneys' fees and expenses of investigation ("Losses"))
based upon, resulting from or arising out of (i) any inaccuracy or
breach of any representation or warranty of R-CUBE or Sellers
contained in or made in connection with this Agreement, and (ii) the
breach by R-CUBE or Sellers of, or the failure by R-CUBE or Sellers to
observe, any of their respective covenants or other agreements
contained in or made in connection with this Agreement. The
indemnification provided for in this Section 7.1 shall terminate
twelve months after the Closing Date (and no claims shall be made by
REI under this Section 7.1 thereafter); provided, however, that
Sellers shall indemnify REI for any and all Taxes incurred by or
attributable to R-CUBE prior to the Closing, and the indemnification
period relating to any Taxes shall terminate on the tenth day after
the expiration of the applicable period of limitations on assessments
and collections applicable to such taxes under the Internal Revenue
Code of 1986.
(2) Notwithstanding the foregoing, the aggregate amount to be
paid by Seller under Section 7.1(a) shall not exceed 50% of the
Purchase Price as adjusted pursuant to Section 1.3 and net of any
insurance proceeds received by REI, and Seller shall not be required
to indemnify, defend, protect and hold harmless an REI Indemnified
Party pursuant to Section 7.1(a) for Losses incurred by an REI
Indemnified Party with respect to any inaccuracy or breach of any
representation or warranty of R-CUBE or Sellers contained in Section 2
of this Agreement or the Other Agreements unless and until the
aggregate amount of such Losses exceeds $25,000, at which time the REI
Indemnified Parties shall be entitled to indemnification hereunder
with respect to all such aggregate amount of Losses (including the
first $25,000 of Losses) and any Losses incurred or suffered by them
thereafter.
7.2 Indemnification by REI
(1) REI shall indemnify, defend, protect and hold harmless
Sellers (each a "Seller Indemnified Party") against all Losses based
upon, resulting from or arising out of (i) any inaccuracy or breach of
any representation, or warranty of REI contained in or made in
connection with this Agreement, and (ii) the breach by REI of, or the
failure by REI to observe, any of its covenants or other agreements
contained in or made in connection with this Agreement. The
indemnification provided for in this Section 7.2 shall terminate
twelve months after the Closing Date (and no claims shall be made by
Sellers under this Section 7.2 thereafter).
(2) Notwithstanding the foregoing, the aggregate amount to be
paid by REI under Section 7.2(a) shall not exceed 50% of the Purchase
Price as adjusted per Section 1.3 and net of any insurance proceeds
received by Sellers, and REI shall not be required to indemnify,
defend, protect and hold harmless a Seller Indemnified Party pursuant
to Section 7.2(a) for Losses
19
incurred by a Seller Indemnified Party with respect to any inaccuracy
or breach of any representation or warranty of REI contained in this
Agreement unless and until the aggregate amount of such Losses exceeds
$25,000, at which time the Seller Indemnified Parties shall be
entitled to indemnification hereunder with respect to all such
aggregate amount of Losses (including the first $25,000 of Losses) and
any Losses incurred or suffered by them thereafter.
7.3 Manner of Indemnification. All indemnification under this Section
7 shall be effected by the payment of cash or delivery of a bank cashier's
check, or by a combination of the foregoing.
8. CLOSING.
8.1 Closing Date. Subject to the termination of this Agreement as
provided in Section 12, the closing of the transactions contemplated by
this Agreement ("Closing") will take place at the offices of Xxxxx & Xxxxxx
LLP, 611 Anton, Suite 1400, Xxxxx Xxxx, Xxxxxxxxxx 00000 on the date
following satisfaction of all conditions set forth in Sections 9, 10 and
11, which date shall be within 30 days of the date of this Agreement,
unless another place, time and date is selected by R-CUBE and REI ("Closing
Date").
8.2 Deliveries by R-CUBE and Sellers at the Closing. At the Closing,
R-CUBE and Sellers shall deliver to REI:
(1) Certificates representing all of the Shares, free of liens or
encumbrances, accompanied by duly executed stock powers by each Seller
in favor of REI with all necessary transfer stamps affixed thereto or
other evidence of payment of applicable stock transfer taxes, if any;
(2) The Final Balance Sheet;
(3) The officers' and Sellers' certificates referred to in
Sections 10.1, 10.2 and 10.4; and
(4) The opinion referred to in Section 10.7.
8.3 Delivery by REI at the Closing. At the Closing, REI shall deliver
to Seller a cashier's check or evidence of wire transfer of funds
representing the Purchase Price for the Seller's Shares.
9. CONDITIONS PRECEDENT TO OBLIGATIONS OF R-CUBE AND SELLER.
The obligations of R-CUBE and Seller hereunder are subject to the
fulfillment or satisfaction on or before the Closing of each of the
following conditions (any one of which may be waived by R-CUBE and Seller,
but only in a writing signed by R-CUBE and Seller):
9.1 Accuracy of Representations and Warrants. The representations and
warranties of REI set forth in Section 3 shall be true and accurate in
every material respect on and
20
as of the Closing Date with the same force and effect as if they had been
made at the Closing except to the extent the failure of the representations
and warranties to be true and accurate in such respects has not had and
could not reasonably be expected to have a Material Adverse Effect, and
R-CUBE shall receive a certificate to that effect executed by REI's Chief
Executive Officer and Chief Financial Officer.
9.2 Covenants. REI shall have performed and complied in all material
respects with all of its covenants required to be performed by it under
this Agreement on or before the Closing, and R-CUBE shall receive a
certificate to that effect signed by REI's Chief Executive Officer and
Chief Financial Officer.
9.3 Compliance with Law. There shall be no order, decree or ruling of
any governmental agency or written threat thereof, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
transactions contemplated by this Agreement, which would prohibit or render
illegal the transactions contemplated by this Agreement.
10. CONDITIONS PRECEDENT TO OBLIGATIONS OF REI.
The obligations of REI hereunder are subject to the fulfillment or
satisfaction on or before the Closing, of each of the following conditions
(any one or more of which may be waived by REI, but only in a writing
signed by REI).
10.1 Accuracy of Representations and Warrants. The representations and
warranties of R-CUBE and Sellers set forth in Section 2 of this Agreement
and the Other Agreements shall be true and accurate in every material
respect on and as of the Closing Date with the same force and effect as if
they had been made at the Closing except to the extent the failure of the
representations and warranties to be true and accurate in such respects has
not had and could not reasonably be expected to have a Material Adverse
Effect, and REI shall receive certificates to that effect executed by each
Seller and by R-CUBE's Chief Executive Officer and Chief Financial Officer.
10.2 Covenants. R-CUBE and Sellers shall have performed and complied
in all material respects with all of their covenants required to be
performed by them under this Agreement and the Other Agreements on or
before the Closing, and REI shall receive certificates to that effect
signed by each Seller and by R-CUBE's Chief Executive Officer and Chief
Financial Officer.
10.3 Completion of Due Diligence. REI shall have conducted its due
diligence investigation of R-CUBE and shall have determined, in its sole
and absolute discretion, that the business, records, assets, contracts,
liabilities, operations and other aspects of the business of R-CUBE (the
"Business Aspects") are satisfactory to REI in all respects. REI shall have
seven days (the "Initial Diligence Period") following the date of this
Agreement to use its reasonable efforts to perform its due diligence
investigation of R-CUBE. If, at the expiration of such Initial Diligence
Period, REI shall request additional time to complete its due diligence,
R-CUBE and Sellers may promptly grant or deny such request in their
reasonable discretion. If such request is granted, it shall allow REI a
minimum of three additional working days (the "Extension Diligence Period")
to complete its due diligence investigation. Within two days following the
expiration of the Initial
21
Diligence Period and the Extension Diligence Period, if any, REI shall
notify R-CUBE and Sellers as to whether, in REI's sole and absolute
discretion, the Business Aspects are satisfactory to REI in all respects.
10.4 Absence of Material Adverse Change. There shall not have been any
material adverse change in the condition (financial or otherwise),
properties, assets, liabilities, businesses, operations, results of
operations or prospects of R-CUBE, taken as a whole, other than: (a) any
adverse effect resulting from conditions affecting the engineering software
industry as a whole or the United States economy as a whole; (b) a failure
by R-CUBE to meet internal earnings or revenue projections; or (c) any
disruption of customer or supplier relationships arising primarily out of
or resulting primarily from actions contemplated by the parties in
connection with, or which is primarily attributable to the announcement of
this Agreement and the transactions contemplated hereby, to the extent
attributable thereto, and REI shall receive a certificate to that effect
executed by R-CUBE's Chief Executive Officer and Chief Financial Officer.
10.5 Compliance with Law. There shall be no order, decree or ruling by
any governmental agency or written threat thereof, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
transactions contemplated by this Agreement, which would prohibit or render
illegal the transactions contemplated by this Agreement.
10.6 Documents. REI shall have received all written consents,
assignments, waivers, authorizations or other certificates reasonably
deemed necessary by REI to provide for the continuation in full force and
effect of any and all material contracts and leases of R-CUBE and for
R-CUBE to consummate the transactions contemplated hereby except when the
failure to receive the consents, etc., would not have a Material Adverse
Effect.
10.7 Corporate Opinion. REI shall have received the opinion of
R-CUBE's corporate legal counsel based upon reasonably requested
certifications as to factual matters and dated the Closing Date regarding
the status and authority of R-CUBE, the authorization of this Agreement and
the transactions contemplated hereby by R-CUBE, and the binding effect of
this Agreement on R-CUBE and Sellers. The opinion shall be satisfactory to
REI.
10.8 Other Agreements. The closing of the Other Agreements shall occur
simultaneously with the Closing of this Agreement.
11. CONDITIONS PRECEDENT TO OBLIGATIONS OF REI, R-CUBE AND SELLER.
The obligations of REI, R-CUBE and Sellers hereunder are subject to
the fulfillment or satisfaction on or before the Closing, of each of the
following conditions (any one or more of which may be waived by REI, R-CUBE
and Seller, but only in a writing signed by REI, R-CUBE and Seller).
11.1 Government Consents. There shall have been obtained on or before
the Closing such material permits or authorizations, and there shall have
been taken such other action, as may be required to consummate the
transactions contemplated by this Agreement by any
22
regulatory authority having jurisdiction over the parties and the actions
herein proposed to be taken, including but not limited to requirements
under applicable federal and state securities laws.
11.2 No Legal Action. No temporary restraining order, preliminary
injunction or permanent injunction or other order preventing the
consummation of the transactions contemplated by this Agreement or the
Other Agreements shall have been issued by any federal or state court and
remain in effect, nor shall any proceeding initiated by the federal
government seeking any of the foregoing be pending.
12. TERMINATION OF AGREEMENT.
12.1 Termination. This Agreement may be terminated at any time prior
to the Closing:
(1) by written agreement of R-CUBE, REI and Seller;
(2) by R-CUBE and Seller, if there has been a breach by REI of
any representation, warranty, covenant or agreement set forth in this
Agreement on the part of REI, or if any representation of REI shall
have become untrue, in either case which has or can reasonably be
expected to have a Material Adverse Effect and which REI fails to cure
prior to the Closing (except that no cure period shall be provided for
a breach by REI which by its nature cannot be cured);
(3) by REI, if there has been a breach by R-CUBE or Seller of any
representation, warranty, covenant or agreement set forth in this
Agreement on the part of R-CUBE or Seller, or if any representation of
R-CUBE or Seller shall have become untrue, in either case which has or
can reasonably be expected to have a Material Adverse Effect and which
R-CUBE or Seller fails to cure prior to the Closing (except that no
cure period shall be provided for a breach by R-CUBE or Seller which
by its nature cannot be cured);
(4) by R-CUBE, Seller or REI, if:
(i)...if all the conditions for Closing shall not have been
satisfied or waived on or before February 28, 1999 other than as
a result of a breach of this Agreement by the terminating party;
or
(ii)..if a permanent injunction or other order by any
federal or state court which would make illegal or otherwise
restrain or prohibit the consummation of the transactions
contemplated by this Agreement shall have been issued and shall
have become final and nonappealable.
12.2 Notice of Termination. Any termination of this Agreement under
Section 12.1 will be effective by the delivery of written notice of the
terminating party to the other parties hereto.
23
12.3 Effect of Termination. In the case of any termination of this
Agreement or the Other Agreements as provided in Section 12 of this
Agreement or the Other Agreements, this Agreement shall be of no further
force and effect (except as provided in Section 14) and nothing herein
shall relieve any party from liability for any breach of this Agreement or
the Other Agreements. In case of any termination as a result of a breach by
a party or the failure of a party to satisfy Closing conditions to be
satisfied by it and which are within its control, that party shall bear all
of the expenses (including, without limitation, reasonable legal,
accounting and other advisory fees) of the other parties incurred in
connection with the failed transaction; provided, however, that in no event
shall REI be responsible for payment of the fees and expenses described in
Section 2.15. In all other cases of termination, each party shall be
responsible for its own expenses.
13. NON-COMPETITION.
13.1 Definitions. For purposes of this Section 13, the following terms
shall have the following meanings:
(1) "Customer Non-Solicitation Period" shall mean, with respect
to each Seller, the period commencing on the Closing Date and
continuing for a period of two years after such date; provided,
however, that the Customer Non-Solicitation Period with respect to
each Seller shall be extended by the number of days in which such
Seller is or was engaged in activities constituting a breach of
Section 13.3.
(2) The term "Customers" shall mean, with respect to each Seller,
any manager, group or division located in a specific building that,
during the year preceding the date of this Agreement, as of the date
of this Agreement, during the period from the date of this Agreement
to the Closing Date or during the Employee Non-Solicitation Period or
the Customer Non-Solicitation Period is or was a client or customer of
R-CUBE.
(3) The words "directly or indirectly" shall mean: (i) being
personally involved in providing or seeking to provide services to an
Employee, Customer or Prospective Customer; (ii) participating in any
person or enterprise as an owner, partner, limited partner, joint
venturer, controlling member or controlling shareholder; or (iii)
communicating to any such person or enterprise any confidential
information of the business conducted by R-CUBE during the relevant
period.
(4) "Employees" shall mean any employee of R-CUBE as of, or
immediately prior to the date of this Agreement, during the period
from the date of this Agreement to the Closing Date or during the
Employee Non-Solicitation Period or the Customer Non-Solicitation
Period.
(5) "Employee Non-Solicitation Period" shall mean, with respect
to each Seller, the period commencing on the Closing Date and
continuing for a period of two years after such date; provided,
however, that the Employee Non-Solicitation Period with respect to
each Seller shall be extended by the number of days in which such
Seller is or was engaged in activities constituting a breach of
Section 13.2. Notwithstanding the foregoing sentence, with respect to
the
24
employment of Mr. Deepak Suktbankar, the Employee Non-Solicitation
Period shall be from the date of this Agreement through and including
the date that is 45 days after the Closing Date.
(6) The term "person" shall mean any natural person, firm,
partnership, association, corporation, company, limited liability
company, limited partnership, trust, business trust, Governmental
Entity or other entity.
(7) The term "Prospective Customer" shall mean any manager, group
or division located in a specific building that R-CUBE has contacted,
or has developed a strategy or plan to contact, for the purpose of
acquiring manager, group or division as a customer or client.
13.2 Non-Solicitation of Employees. Sellers recognize that the
Employees are a valuable resource of R-CUBE. Accordingly, during the
Employee Non-Solicitation Period, no Seller shall, either alone or in
conjunction with any other person or entity, directly or indirectly go into
business with any Employee or solicit, induce or recruit any Employee to
leave the employ of R-CUBE.
13.3 Non-Solicitation of Customers. Sellers recognize that customers
are a valuable resource of R-CUBE. Accordingly, during the Employee
Non-Solicitation Period, no Seller shall, either alone or in conjunction
with any other person or entity, directly or indirectly call on, solicit,
take away, accept as a client, customer or prospective client or customer,
or attempt to call on, solicit, take away, accept as a client, customer or
prospective client or customer a Customer or Prospective Customer.
13.4 Additional Agreements. Seller hereby expressly agrees and
acknowledges that:
(1) R-CUBE has protectable business interests with respect to its
Employees, Customers and Prospective Customers, and that competition
with and against such business interests would be harmful to R-CUBE;
(2) the covenants contained in this Section 13 are reasonable as
to time and geographical area and do not place any unreasonable burden
upon each Seller's ability to earn a livelihood;
(3) the public will not be harmed as a result of enforcement of
the covenants contained in this Section 13;
(4) the personal legal counsel for each Seller has reviewed the
covenants contained in this Section 13;
(5) the parties have entered into the covenants contained herein
in connection with and as a condition precedent to the consummation of
the Agreement and the Other Agreements, pursuant to which REI shall
acquire R-CUBE; the agreements, actions, covenants, and promises
contained herein are intended to protect and ensure the value of
R-CUBE, including its goodwill, which actions, covenants, and promises
are a material consideration to REI in connection
25
with this Agreement and the Other Agreements; and, to the extent that
the laws of any jurisdiction in which this Agreement or the Other
Agreements shall be interpreted, construed, and/or enforced
distinguish between covenants given in connection with the sale of a
business and its goodwill and covenants given in connection with
employment, this covenant will be given the broader interpretation
customarily given to covenants in connection with the sale of a
business and the transfer of goodwill to REI; and
(6) each Seller understands and agrees to each and every term and
condition contained Section 13 of this Agreement and the Other
Agreements.
13.5 Remedies; Enforceability. Seller recognizes and acknowledges that
irreparable damage will result to REI in the event of a breach by Seller or
any of Seller's affiliates of the provisions of this Section 13, and,
accordingly, in the event of such a breach, REI will be entitled, in
addition to any other legal or equitable damages and remedies to which it
may be entitled or which may be available, to an injunction to restrain the
violation thereof. If any provision of this Section 13 shall be adjudicated
by a court of competent jurisdiction to be invalid or unenforceable because
of the scope, duration, area of its applicability, or any other reason, the
court making such determination will have the power to modify such scope,
duration, or area, or all of them, or to strike an invalid or unenforceable
provision, in whole or in part, to the extent necessary to make such scope,
duration, area, or provision valid and enforceable.
14. SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.
All representations, warranties and covenants of the parties contained
in this Agreement will remain operative and in full force and effect,
regardless of any investigation made by or on behalf of the parties to this
Agreement, until the earlier of the termination of this Agreement or one
year after the Closing Date, whereupon the representations, warranties and
covenants will expire (except for covenants, such as those contained in
Sections 4.8, 5.4, 7 and 13, that by their terms survive for a longer
period).
15. MISCELLANEOUS.
15.1 Governing Law. The internal laws of the State of California
(irrespective of its choice of law principles) will govern the validity of
this Agreement, the construction of its terms and the interpretation and
enforcement of the rights and duties of the parties hereto.
15.2 Assignment; Binding Upon Successors and Assigns. No party hereto
may assign any of its rights or obligations hereunder without the prior
written consent of the other parties hereto. This Agreement will be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns.
15.3 Severability. If any provision of this Agreement, or the
application thereof, will for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances will be interpreted so as
reasonably to effect the interest of the parties hereto. The parties
further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will
26
achieve, to the greatest extent possible, the economic, business and other
purpose of the void unenforceable provision.
15.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original as regards any party
whose signature appears thereon and all of which together will constitute
one and the same instrument. This Agreement will become binding when one or
more counterparts hereof, individually or taken together, will bear the
signatures of all the parties reflected hereon as signatories.
15.5 Other Remedies. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative
with and not exclusive of any other remedy conferred hereby or by law on
such party, and the exercise of any one remedy will not preclude the
exercise of any other.
15.6 Amendment and Waivers. Any term or provision of this Agreement
may be amended, and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either
retroactively or prospectively) only by a writing signed by the party to be
bound thereby. The waiver by a party of any breach hereof or default in the
performance hereof will not be deemed to constitute a waiver of any other
default or any succeeding breach or default.
15.7 Expenses. Except as provided in Section 12.3, REI, on the one
hand, and Sellers and R-CUBE, on the other, will each bear their own
expenses and legal fees incurred with respect to this Agreement and the
transactions contemplated hereby.
15.8 Attorneys' Fees. Should suit be brought to enforce or interpret
any part of this Agreement, the prevailing party will be entitled to
recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including, without limitation,
costs, expenses and fees on any appeal).
15.9 Notices. All notices and other communications pursuant to this
Agreement shall be in writing and deemed to be sufficient if contained in a
written instrument and shall be deemed given if delivered personally,
telecopied, sent by nationally-recognized overnight courier or mailed by
registered or certified mail (return receipt requested), postage prepaid,
to the parties at the following address (at such other address for a party
as shall be specified by like notice):
If to R-CUBE to:........R-CUBE Technologies, Inc.
00000 Xxxx Xxxxxx Xxxx, #000
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
27
With a copy to:.........Xxxx Xxxx Xxxx & Friedenrich LLP
0000 Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxx Xxxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxxxxxxx X. Xxxxx, Esq.
Telecopier: (000) 000-0000
If to REI to:...........Research Engineers, Inc.
00000 Xxxx Xxxxx Xxxxxxx
Xxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Telecopier: (000) 000-0000
With a copy to:.........Xxxxx & Xxxxxx, XX
611 Anton, Suite 1400
Xxxxx Xxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Telecopier: (000) 000-0000
If to Sellers to:.......Xxxxxxx X. Xxxxx
00000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
All notices and other communications shall be deemed to have been
received (a) in the case of personal delivery, on the date of delivery, (b)
in the case of a telecopy, when the party receiving the copy shall have
confirmed receipt of the communication, (c) in the case of delivery by
nationally-recognized overnight courier, on the business day following
dispatch, and (d) in the case of mailing, on the third business day
following such mailing.
15.10 Construction of Agreement. This Agreement has been negotiated by
the respective parties hereto and their attorneys and the language hereof
will not be construed for or against either party. A reference to a Section
or an Exhibit will mean a Section in, or Exhibit to, this Agreement unless
otherwise explicitly set forth. The titles and headings herein are for
reference purposes only and will not in any manner limit the construction
of this Agreement which will be considered as a whole.
15.11 No Joint Venture. Nothing contained in this Agreement will be
deemed or construed as creating a joint venture or partnership between any
of the parties to this Agreement. No party is by virtue of this Agreement
authorized as an agent, employee or legal representative of any other
party. No party will have the power to control the activities and
operations of any other. The status of the parties hereto is, and at all
times will continue to be, that of independent contractors with respect to
each other. No party will have any power or authority to bind or commit any
other. No party will hold itself out as having any authority or
relationship in contravention of this Section.
15.12 Further Assurances. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances as may be reasonably
requested by any other party to evidence and reflect the
28
transactions described herein and contemplated hereby and to carry into
effect the intents and purposes of this Agreement.
15.13 Absence of Third Party Rights. No provisions of this Agreement
are intended, nor will be interpreted, to provide or create any third party
beneficiary rights or any other rights of any kind in any client, customer,
affiliate, shareholder or partner of any party hereto or any other person
or entity unless specifically provided otherwise herein, and, except as so
provided, all provisions hereof will be personal solely between the parties
to this Agreement.
15.14 Entire Agreement. This Agreement and the schedules and exhibits
hereto constitute the entire understanding and agreement of the parties
hereto with respect to the subject matter hereof and supersede all prior
and contemporaneous agreements or understandings, inducements or
conditions, express or implied, written or oral, between the parties with
respect hereto. The express terms hereof control and supersede any course
of performance or usage of trade inconsistent with any of the terms hereof.
29
IN WITNESS WHEREOF, the parties hereto have executed or caused this
Agreement to be executed by their duly authorized respective officers as of the
date first above written.
REI: RESEARCH ENGINEERS, INC.,
a Delaware corporation
By: /S/ XXXXX X. XXX
--------------------
Xxxxx X. Xxx, President
By: /S/ XXXXX X. XXXXX
----------------------
Xxxxx X. Xxxxx, Secretary
R-CUBE: R-CUBE TECHNOLOGIES, INC.,
a California corporation
By: /S/ XXXXXXX X. XXXXX
------------------------
Xxxxxxx X. Xxxxx, President
By: /S/ XXXXXXXXX XXXXX XXXXXXXXX
---------------------------------
Xxxxxxxxx Xxxxx Malireddy,
Secretary
SELLER: /S/ XXXXXXX X. XXXXX
--------------------
XXXXXXX X. XXXXX, an individual
I, THE SPOUSE OF SELLER, HAVE EXECUTED THIS AGREEMENT FOR THE PURPOSE OF
CONFIRMING MY CONSENT TO THE CONVEYANCE OF MY COMMUNITY PROPERTY INTEREST, IF
ANY, IN SHARES OF CAPITAL STOCK OF R-CUBE PURSUANT TO THIS AGREEMENT
/S/ XXXXXXXX XXXXXX
-------------------
Print Name: Xxxxxxxx Xxxxxx
30
