EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
AMONG
INVENTA CORPORATION,
XTEND-TECH, INC.
AND
THE SHAREHOLDERS OF XTEND-TECH, INC.
January 26, 2000
TABLE OF CONTENTS
Page
1. Plan of Reorganization.................................................... 1
(a) Exchange of Shares............................................... 1
(b) The Closing...................................................... 1
(c) Deliveries at the Closing........................................ 2
(d) Changes in INVENTA"S Capitalization.............................. 2
2. Representations and Warranties Concerning the Transaction................. 2
(a) Representations and Warranties of the Shareholders............... 2
(b) Representations and Warranties of Inventa........................ 3
3. Representations and Warranties Concerning XTEND........................... 4
(a) Organization, Qualification, and Corporate Power................. 4
(b) Capitalization................................................... 4
(c) Noncontravention................................................. 5
(d) Brokers" Fees.................................................... 5
(e) Title to Assets.................................................. 5
(f) Subsidiaries..................................................... 5
(g) Financial Statements............................................. 5
(h) Events Subsequent to September 30, 1999.......................... 6
(i) Undisclosed Liabilities.......................................... 8
(j) Legal Compliance................................................. 8
(k) Tax Matters...................................................... 8
(l) Intellectual Property............................................ 8
(m) Tangible Assets.................................................. 10
(n) Contracts........................................................ 11
(o) Notes and Accounts Receivable.................................... 12
(p) Powers of Attorney............................................... 12
(q) Insurance........................................................ 12
(r) Litigation....................................................... 13
(s) Employees........................................................ 13
(t) Employee Benefits................................................ 13
(u) Guaranties....................................................... 13
(v) Certain Business Relationships with XTEND........................ 14
(w) Disclosure....................................................... 14
4. Pre-Closing Covenants..................................................... 14
(a) General.......................................................... 14
(b) Notices and Consents............................................. 14
(c) Operation of Business............................................ 14
(d) Compensation..................................................... 14
(e) Preservation of Business......................................... 14
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TABLE OF CONTENTS
(continued)
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(f) Full Access...................................................... 14
(g) Notice of Developments........................................... 15
(h) Exclusivity...................................................... 15
(i) Options.......................................................... 15
5. Post-Closing Covenants.................................................... 15
(a) General.......................................................... 15
(b) Transition....................................................... 15
(c) Confidentiality.................................................. 15
6. Conditions to Obligation to Close......................................... 16
(a) Conditions to Obligation of Inventa.............................. 16
(b) Conditions to Obligation of the Shareholders..................... 17
7. Survival of Representations and Warranties................................ 18
8. General Indemnification................................................... 18
(a) Subject to Section 8(c) hereunder, the Shareholders hereby
jointly and..................................................... 18
(b) Losses Net of Insurance and Tax Benefits......................... 18
9. Establishment of Escrow................................................... 19
10. Termination; Remedies..................................................... 19
(a) Termination of Agreement......................................... 19
(b) Effect of Termination............................................ 20
11. Miscellaneous............................................................. 20
(a) Press Releases and Public Announcements.......................... 20
(b) No Third-Party Beneficiaries..................................... 20
(c) Entire Agreement................................................. 20
(d) Succession and Assignment........................................ 20
(e) Counterparts..................................................... 20
(f) Headings......................................................... 20
(g) Notices.......................................................... 20
(h) Governing Law.................................................... 21
(i) Amendments and Waivers........................................... 21
(j) Severability..................................................... 21
(k) Expenses......................................................... 22
(l) Attorneys" Fees.................................................. 22
(m) Construction..................................................... 22
(n) Incorporation of Exhibits and Schedules.......................... 22
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TABLE OF CONTENTS
(continued)
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(o) Specific Performance............................................. 22
(p) Submission to Jurisdiction....................................... 22
Page
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Exhibit A Disclosure Schedule
Exhibit B Financial Statements
Exhibit C Form of Stock Restriction Agreement
Exhibit D Form of Noncompetition Agreement
Exhibit E Form of Opinion of Counsel to the Shareholders
Exhibit F Form of Opinion of Counsel to Inventa
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EXHIBIT 2.1
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization ("Agreement") is entered into as
of January 26, 2000, AND EFFECTIVE AS OF JANUARY 1, 2000, by and among Inventa
Corporation, a California corporation ("Inventa"), XTEND-Tech, Inc., a New
Jersey corporation ("XTEND") and those persons and parties owning shares of
stock in XTEND, more particularly set forth on Schedule 1 attached hereto
(collectively, the "Shareholders"). Inventa, XTEND and the Shareholders are
referred to collectively herein as the "Parties".
RECITALS
1. The Shareholders are the owners of all of the issued and outstanding
capital stock of XTEND, in the proportions set forth on Schedule 1 attached
hereto.
2. Inventa, XTEND and the Shareholders have agreed upon a corporate
reorganization transaction pursuant to which Inventa will acquire all of the
issued and outstanding capital stock of XTEND from the Shareholders, in exchange
for the issuance by Inventa to the Shareholders, of an aggregate of 1,350,000
shares of Inventa voting common stock.
3. It is the understanding and intention of the Parties that the
transactions provided for in this Agreement will qualify as, and constitute, a
corporate reorganization within the meaning of Section 368(a)(1)(B) of the
Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, in consideration of the premises and the mutual promises
herein made, and in consideration of the representations, warranties, and
covenants herein contained, the Parties agree as follows:
1. Plan of Reorganization
(a) Exchange of Shares. On and subject to the terms and conditions of
this Agreement, Inventa hereby agrees to acquire from each of the Shareholders,
and the Shareholders hereby agree to assign, transfer and convey to Inventa, all
of their respective shares of the capital stock of XTEND ("XTEND Shares"), in
exchange for 1,350,000 shares of Inventa voting common stock (the "INVENTA
Stock"), all of which Inventa Stock shall be original issue. The Inventa Stock
shall be allocated among the Shareholders in proportion to their respective
holdings of XTEND Shares, as set forth in the attached Schedule 1.
(b) The Closing. The Closing of the transactions contemplated by this
Agreement (the "Closing") shall take place via mail, courier and facsimile
transmissions between the offices of Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx, 000 Xxxx
Xxxx Xxxx, Xxxx Xxxx, Xxxxxxxxxx 00000, counsel for Inventa, and the offices of
Xxxxx Cummis Radin Tischman Xxxxxxx & Xxxxx, P.A., Xxx Xxxxxxxxxx Xxxxx, Xxxxxx,
Xxx Xxxxxx 00000, counsel for XTEND and the Shareholders, on the first business
day following the satisfaction or waiver of all conditions to the obligations of
the Parties to consummate the transactions contemplated hereby (other than
conditions with respect to actions the
respective Parties will take at the Closing itself), or such other date as
Inventa and the Shareholders may mutually determine (the "Closing Date").
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(c) Deliveries at the Closing. At the Closing, (i) the Shareholders
-------------------------
will deliver to Inventa the various certificates, instruments, and documents
referred to in Section 7(a) below, (ii) Inventa will deliver to the Shareholders
the various certificates, instruments and documents referred to in Section 7(b)
below, (iii) each of the Shareholders will deliver to Inventa stock certificates
representing all of his or its XTEND Shares, endorsed in blank or accompanied by
duly executed assignment documents, and (iv) Inventa will deliver to each of the
Shareholders the number of shares of Inventa Stock which, in the aggregate, will
equal 1,350,000 shares of such Inventa Stock, in proportion to the Shareholders'
respective holdings of XTEND Shares set forth in Schedule 1 attached hereto.
(d) Changes in INVENTA'S Capitalization. If between the date of this
-----------------------------------
Agreement and the Closing, the outstanding shares of Inventa common stock are,
without the receipt of new consideration by Inventa, increased, decreased,
changed into, or exchanged for a different number or kind of shares or
securities of Inventa through reorganization, reclassification, stock dividend,
stock split, reverse stock split, or similar change in Inventa's capitalization,
Inventa will issue and deliver to the Shareholders in addition to or in lieu of
the Inventa Stock specified in Section 1(a), voting common stock of Inventa in
equitably adjusted amounts. In the event of any such change in Inventa's
capitalization, all references to the Inventa Stock herein shall refer to the
number of Inventa shares as thus adjusted.
2. Representations and Warranties Concerning the Transaction.
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(a) Representations and Warranties of the Shareholders. Each of the
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Shareholders represents and warrants to Inventa that the statements contained in
this Section 2(a) are correct and complete as of the date of this Agreement and
will be correct and complete as of the Closing Date (as though made then and as
though the Closing Date were substituted for the date of this Agreement
throughout this Section 2(a)), but with respect to himself or itself only.
(i) Organization of Certain Shareholders. If the Shareholder is a
------------------------------------
corporation, the Shareholder is duly organized, validly existing, and in good
standing under the laws of the jurisdiction of its incorporation.
(ii) Authorization of Transaction. The Shareholder has full power and
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authority (including, if the Shareholder is a corporation, full corporate power
and authority) to execute and deliver this Agreement and to perform his or its
obligations hereunder. This Agreement constitutes the valid and legally binding
obligation of the Shareholder, enforceable in accordance with its terms and
conditions. The Shareholder need not give any notice to, make any filing with,
or obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by this
Agreement.
(iii) Noncontravention. Neither the execution and the delivery of
----------------
this Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any
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constitution, statute, regulation, rule, injunction, judgment, order, decree,
ruling, charge, or other restriction of any government, governmental agency, or
court to which the Shareholder is subject or, if the Shareholder is a
corporation, any provision of its charter or bylaws or (B) conflict with, result
in a breach of, constitute a default under, result in the acceleration of,
create in any party the right to accelerate, terminate, modify, or cancel, or
require any notice under any agreement, contract, lease, license, instrument, or
other arrangement to which the Shareholder is a party or by which he or it is
bound or to which any of his or its assets is subject.
(iv) Brokers' Fees. The Shareholder has no liability or obligation
-------------
to pay any fees or commissions to any broker, finder, or agent with respect to
the transactions contemplated by this Agreement for which Inventa could
become liable or obligated.
(v) Investment. Each of the Shareholders (A) understands that the
----------
shares of Inventa Stock have not been, and will not be, registered under the
Securities Act of 1933, as amended (the "Securities Act"), or under any state
securities laws, and are being offered and sold in reliance upon federal and
state exemptions for transactions not involving any public offering, (B) is
acquiring Inventa Stock solely for his or its own account for investment
purposes, and not with a view to the distribution thereof, (C) is a
sophisticated investor with knowledge and experience in business and financial
matters, (D) has received certain information concerning Inventa and has had the
opportunity to obtain additional information as desired in order to evaluate the
merits and the risks inherent in holding Inventa Stock, and (E) is able to bear
the economic risk and lack of liquidity inherent in holding Inventa Stock.
(vi) XTEND Shares. The Shareholder holds of record and owns
------------
beneficially the number of XTEND Shares set forth next to his or its name in
Section 2(a) of the Disclosure Schedule, free and clear of any restrictions on
transfer (other than any restrictions under the Securities Act and state
securities laws), taxes, liens, claims, encumbrances, security interests,
options, warrants, purchase or exchange rights, contracts, commitments,
equitable rights and demands (collectively "Security Interests"). The
Shareholder is not a party to any option, warrant, exchange right, or other
contract or commitment that could require the Shareholder to sell, transfer, or
otherwise dispose of any capital stock of XTEND (other than this Agreement). The
Shareholder is not a party to any voting trust, proxy, or other agreement or
understanding with respect to the voting of any capital stock of XTEND.
(b) Representations and Warranties of Inventa. Inventa represents and
-----------------------------------------
warrants to the Shareholders that the statements contained in this Section 2(b)
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 2(b)).
(i) Organization of Inventa. Inventa is a corporation duly
-----------------------
organized, validly existing, and in good standing under the laws of the State of
California.
(ii) Authorization of Transaction. Inventa has full power and
----------------------------
authority (including full corporate power and authority) to execute and deliver
this Agreement and to perform
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its obligations hereunder. This Agreement constitutes the valid and legally
binding obligation of Inventa, enforceable in accordance with its terms and
conditions. Inventa need not give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or
governmental agency in order to consummate the transactions contemplated by
this Agreement.
(iii) Noncontravention. Neither the execution and the delivery of
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this Agreement, nor the consummation of the transactions contemplated hereby,
will (A) violate any constitution, statute, regulation, rule, injunction,
judgment, order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which Inventa is subject or any provision of
its charter or bylaws or (B) conflict with, result in a breach of, constitute a
default under, result in the acceleration of, create in any party the right to
accelerate, terminate, modify, or cancel, or require any notice under any
agreement, contract, lease, license, instrument, or other arrangement to which
Inventa is a party or by which it is bound or to which any of its assets is
subject.
(iv) Brokers' Fees. Inventa has no liability or obligation to pay
-------------
any fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement for which any Shareholder could
become liable or obligated.
(v) Investment. Inventa is not acquiring XTEND Shares with a view
----------
to or for sale or exchange in connection with any distribution thereof within
the meaning of the Securities Act.
3. Representations and Warranties Concerning XTEND. The Shareholders
-----------------------------------------------
represent and warrant to Inventa that the statements contained in this Section 3
are correct and complete as of the date of this Agreement and will be correct
and complete as of the Closing Date (as though made then and as though the
Closing Date were substituted for the date of this Agreement throughout this
Section 3), except as set forth in the disclosure schedule delivered by the
Shareholders to Inventa on the date hereof and attached hereto as Exhibit A (the
"Disclosure Schedule").
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(a) Organization, Qualification, and Corporate Power. XTEND is a
------------------------------------------------
corporation duly organized, validly existing, and in good standing under the
laws of the jurisdiction of its incorporation. XTEND is duly authorized to
conduct business and is in good standing under the laws of each jurisdiction
where such qualification is required. XTEND has full corporate power and
authority and all licenses, permits, and authorizations necessary to carry on
the businesses in which it is engaged and in which it presently proposes to
engage and to own and use the properties owned and used by it. Section 3(a) of
the Disclosure Schedule lists the directors and officers of XTEND. The
Shareholders have delivered to Inventa correct and complete copies of the
charter and bylaws of XTEND (as amended to date). The minute books (containing
the records of meetings of the stockholders, the board of directors, and any
committees of the board of directors), the stock certificate books, and the
stock record books of XTEND are correct and complete. XTEND is not in default
under or in violation of any provision of its charter or bylaws.
(b) Capitalization. The entire authorized capital stock of XTEND
--------------
consists of 100,000 shares of Common Stock, of which 100,000 shares are issued
and outstanding. All of the
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issued and outstanding shares of capital stock, have been duly authorized, are
validly issued, fully paid, and nonassessable, and are held of record by the
respective Shareholders as set forth in Section 3(b) of the Disclosure Schedule.
No other shares of capital stock are issued or outstanding. There are no
outstanding or authorized options, warrants, purchase or exchange rights,
subscription rights, conversion rights, exchange rights, or other contracts or
commitments that could require XTEND to issue, sell, or otherwise cause to
become outstanding any of its capital stock. There are no outstanding or
authorized stock appreciation, phantom stock, profit participation, or similar
rights with respect to XTEND. There are no voting trusts, proxies, or other
agreements or understandings with respect to the voting of the capital stock of
XTEND.
(c) Noncontravention. Neither the execution and the delivery of this
----------------
Agreement, nor the consummation of the transactions contemplated hereby, will
(i) violate any constitution, statute, regulation, rule, injunction, judgment,
order, decree, ruling, charge, or other restriction of any government,
governmental agency, or court to which XTEND is subject or any provision of the
charter or bylaws of XTEND or (ii) conflict with, result in a breach of,
constitute a default under, result in the acceleration of, create in any party
the right to accelerate, terminate, modify, or cancel, or require any notice
under any agreement, contract, lease, license, instrument, or other arrangement
to which XTEND is a party or by which it is bound or to which any of its assets
is subject (or result in the imposition of any Security Interest upon any of its
assets). XTEND does not need to give any notice to, make any filing with, or
obtain any authorization, consent, or approval of any government or governmental
agency in order for the Parties to consummate the transactions contemplated by
this Agreement.
(d) Brokers' Fees. XTEND has no liability or obligation to pay any
-------------
fees or commissions to any broker, finder, or agent with respect to the
transactions contemplated by this Agreement.
(e) Title to Assets. XTEND has good and marketable title to, or a
---------------
valid leasehold or lessee interest in, the properties and assets used by it,
located on its premises, or shown on the most recent balance sheet or acquired
after the date thereof, free and clear of all Security Interests, except for
properties and assets disposed of in the ordinary course of business since the
date of the most recent balance sheet.
(f) Subsidiaries. XTEND has no subsidiaries.
------------
(g) Financial Statements. Attached hereto as Exhibit B are the
-------------------- ---------
following financial statements (collectively the "Financial Statements"): (i)
--------------------
audited balance sheet and statement of income, changes in stockholders' equity,
and cash flow as of and for the seven month period March 1 - September 30, 1999
for XTEND; and (ii) unaudited balance sheet and statement of income, changes in
stockholders' equity, and cash flow (the "Most Recent Financial Statements") as
--------------------------------
of and for the three months ended December 31, 1999 (the "Most Recent Fiscal
------------------
Month End") for XTEND (collectively, the "Financial Statements"). The Financial
---------
Statements (including the notes thereto) have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods covered thereby, present fairly the financial condition
of XTEND as of such dates and the results of operations of XTEND for such
periods, are correct and
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complete, and are consistent with the books and records of XTEND (which books
and records are correct and complete); provided, however, that the Most Recent
Financial Statements are subject to normal year-end adjustments (which will not
be material individually or in the aggregate) and lack footnotes and other
presentation items.
(h) Events Subsequent to September 30, 1999. Since September 30, 1999,
---------------------------------------
there has not been any material adverse change in the business, financial
condition, operations, or results of operations, of XTEND. Without limiting the
generality of the foregoing except as set forth in Section 3(h) of the
Disclosure Schedule, since that date:
(i) XTEND has not sold, leased, transferred, or assigned any of its
assets, tangible or intangible, other than for a fair consideration in the
ordinary course of business;
(ii) XTEND has not entered into any agreement, contract, lease, or
license (or series of related agreements, contracts, leases, and licenses)
either involving more than $10,000 or outside the ordinary course of business;
(iii) no party (including XTEND) has accelerated, terminated,
modified, or cancelled any agreement, contract, lease, or license (or series of
related agreements, contracts, leases, and licenses) involving more than $10,000
to which XTEND is a party or by which XTEND is bound;
(iv) XTEND has not imposed any Security Interest upon any of its
assets, tangible or intangible;
(v) XTEND has not made any capital expenditure (or series of
related capital expenditures) either involving more than $10,000 or outside the
ordinary course of business;
(vi) XTEND has not made any capital investment in, any loan to, or
any acquisition of the securities or assets of, any other person (or series of
related capital investments, loans, and acquisitions) either involving more than
$10,000 or outside the ordinary course of business;
(vii) XTEND has not issued any note, bond, or other debt security or
created, incurred, assumed, or guaranteed any indebtedness for borrowed money or
capitalized lease obligation either involving more than $10,000 singly or
$25,000 in the aggregate;
(viii) XTEND has not delayed or postponed the payment of accounts
payable and other liabilities outside the ordinary course of business;
(ix) XTEND has not cancelled, compromised, waived, or released any
right or claim (or series of related rights and claims) either involving more
than $10,000 or outside the ordinary course of business;
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(x) XTEND has not granted any license or sublicense of any rights
under or with respect to any Intellectual Property;
(xi) there has been no change made or authorized in the charter or
bylaws of XTEND;
(xii) XTEND has not issued, sold, or otherwise disposed of any of
its capital stock, or granted any options, warrants, or other rights to purchase
or exchange or obtain (including upon conversion, exchange, or exercise) any of
its capital stock;
(xiii) XTEND has not declared, set aside, or paid any dividend or
made any distribution with respect to its capital stock (whether in cash or in
kind) or redeemed, exchanged, or otherwise acquired any of its capital stock;
(xiv) XTEND has not experienced any damage, destruction, or loss
(whether or not covered by insurance) to its property;
(xv) XTEND has not made any loan to, or entered into any other
transaction with, any of its directors, officers, and employees outside the
ordinary course of business;
(xvi) XTEND has not entered into any employment contract or
collective bargaining agreement, written or oral, or modified the terms of any
existing such contract or agreement;
(xvii) XTEND has not granted any increase in the base compensation of
any of its directors, officers, and employees outside the ordinary course of
business, or paid any bonus to any such individual;
(xviii) XTEND has not adopted, amended, modified, or terminated any
bonus, profit-sharing, incentive, severance, or other plan, contract, or
commitment for the benefit of any of its directors, officers, and employees (or
taken any such action with respect to any other Employee Benefit Plan);
(xix) XTEND has not made any other change in employment terms for
any of its directors, officers, and employees;
(xx) XTEND has not made or pledged to make any charitable or other
capital contribution;
(xxi) there has not been any other material occurrence, event,
incident, action, failure to act, or transaction outside the ordinary course of
business involving XTEND; and
(xxii) XTEND has not committed to any of the foregoing.
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(i) Undisclosed Liabilities. XTEND has no liability (and there is no
-----------------------
threat of, nor to the Company's knowledge any basis for any present or future
action, suit, proceeding, hearing, investigation, charge, complaint, claim, or
demand against it giving rise to any liability), except for (i) liabilities set
forth in the Most Recent Balance Sheet (or in any notes thereto) and (ii)
liabilities which have arisen after the Most Recent Fiscal Month End in the
ordinary course of business (none of which results from, arises out of, relates
to, is in the nature of, or was caused by any breach of contract, breach of
warranty, tort, infringement, or violation of law).
(j) Legal Compliance. XTEND and its predecessors and affiliates have
----------------
complied with all applicable laws (including rules, regulations, codes, plans,
injunctions, judgments, orders, decrees, rulings, and charges thereunder) of
federal, state, local, and foreign governments (and all agencies thereof), and
no action, suit, proceeding, hearing, investigation, charge, complaint, claim,
demand, or notice has been filed or commenced against any of them alleging any
failure so to comply.
(k) Tax Matters.
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(i) XTEND has filed all tax returns that it was required to
file, if any. Any such tax returns are correct and complete in all respects. All
taxes due and owing by XTEND, if any (whether or not shown on any tax return)
have been paid. XTEND is not currently the beneficiary of any extension of time
within which to file any tax return. No claim has ever been made by an authority
in a jurisdiction where XTEND does not file tax returns that it is or may be
subject to taxation by that jurisdiction. There are no Security Interests on any
of the assets of XTEND that arose in connection with any failure (or alleged
failure) to pay any tax .
(ii) XTEND has withheld and paid all taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party.
(iii) No Shareholder or director or officer of XTEND is aware
that any authority may assess any additional taxes for any period for which tax
returns have been filed. There is no dispute or claim concerning any tax
liability of XTEND (A) claimed or raised by any authority in writing, or (B) as
to which any of the Shareholders and the directors and officers of XTEND has
knowledge based upon personal contact with any agent of such authority. Section
3(k)(iii) of the Disclosure Schedule lists all federal, state, local, and
foreign income tax returns filed with respect to XTEND since inception,
indicates those tax returns that have been audited, and indicates those tax
returns that currently are the subject of audit. The Shareholders have delivered
to Inventa correct and complete copies of all federal income tax returns,
examination reports, and statements of deficiencies assessed against or agreed
to by XTEND since inception, if any.
(iv) XTEND has not waived any statute of limitations in respect
of taxes or agreed to any extension of time with respect to a tax assessment or
deficiency.
(l) Intellectual Property.
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(i) XTEND owns or has the right to use pursuant to license,
sublicense, agreement, or permission all patent applications, patents,
copyrights, trademarks, tradenames, service marks, and other intellectual
property rights, if any ("Intellectual Property") necessary for the operation of
the business of XTEND as currently conducted. Each item of Intellectual Property
owned or used by XTEND immediately prior to the Closing hereunder will be owned
or available for use by XTEND on identical terms and conditions immediately
subsequent to the Closing hereunder. XTEND has taken all necessary and desirable
action to maintain and protect each item of Intellectual Property that it owns
or uses, if any.
(ii) XTEND has not interfered with, infringed upon,
misappropriated, or otherwise come into conflict with any Intellectual Property
rights of third parties, and none of the Shareholders or the directors and
officers of XTEND has ever received any charge, complaint, claim, demand, or
notice alleging any such interference, infringement, misappropriation, or
violation (including any claim XTEND must license or refrain from using any
Intellectual Property rights of any third party). To the knowledge of each of
the Shareholders and the directors and officers of XTEND, no third party has
interfered with, infringed upon, misappropriated, or otherwise come into
conflict with any Intellectual Property rights of XTEND.
(iii) Section 3(l)(iii) of the Disclosure Schedule identifies
each patent or registration that has been issued to XTEND with respect to any of
its Intellectual Property, identifies each pending patent application or
application for registration that XTEND has made with respect to any of its
Intellectual Property, and identifies each license, agreement, or other
permission that XTEND has granted to any third party with respect to any of its
Intellectual Property (together with any exceptions), if any. The Shareholders
have delivered to Inventa correct and complete copies of all such patents,
registrations, applications, licenses, agreements, and permissions (as amended
to date), if any and have made available to Inventa correct and complete copies
of all other written documentation evidencing ownership and prosecution (if
applicable) of each such item, if any. Section 3(l)(iii) of the Disclosure
Schedule also identifies each trade name or unregistered trademark used by XTEND
in connection with any of its business, if any. With respect to each item of
Intellectual Property required to be identified in Section 3(l)(iii) of the
Disclosure Schedule:
(A) XTEND possesses all right, title, and interest in and
to the item, free and clear of any Security Interest, license, or other
restriction;
(B) the item is not subject to any outstanding injunction,
judgment, order, decree, ruling, or charge;
(C) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or is threatened which challenges
the legality, validity, enforceability, use, or ownership of the item; and
(D) XTEND has never agreed to indemnify any Person for or
against any interference, infringement, misappropriation, or other conflict with
respect to the item.
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(iv) Section 3(l)(iv) of the Disclosure Schedule identifies each
item of Intellectual Property that any third party owns and that XTEND uses
pursuant to license, sublicense, agreement, or permission (other than readily
available end user software) in the ordinary course of business. The
Shareholders have delivered to Inventa correct and complete copies of all such
licenses, sublicenses, agreements, and permissions (as amended to date). With
respect to each item of Intellectual Property required to be identified in
Section 3(l)(iv) of the Disclosure Schedule:
(A) the license, sublicense, agreement, or permission
covering the item is legal, valid, binding, enforceable, and in full force and
effect;
(B) the license, sublicense, agreement, or permission will
continue to be legal, valid, binding, enforceable, and in full force and effect
on identical terms following the consummation of the transactions contemplated
hereby;
(C) no party to the license, sublicense, agreement, or
permission is in breach or default, and no event has occurred which with notice
or lapse of time would constitute a breach or default or permit termination,
modification, or acceleration thereunder;
(D) no party to the license, sublicense, agreement, or
permission has repudiated any provision thereof;
(E) with respect to each sublicense, the representations
and warranties set forth in subsections (A) through (D) above are true and
correct with respect to the underlying license;
(F) the underlying item of Intellectual Property is not
subject to any outstanding injunction, judgment, order, decree, ruling, or
charge;
(G) no action, suit, proceeding, hearing, investigation,
charge, complaint, claim, or demand is pending or is threatened which challenges
the legality, validity, or enforceability of the underlying item of Intellectual
Property; and
(H) XTEND has not granted any sublicense or similar right
with respect to the license, sublicense, agreement, or permission.
(v) To the knowledge of each of the Shareholders and the
directors and officers of XTEND, XTEND will not interfere with, infringe upon,
misappropriate, or otherwise come into conflict with, any Intellectual Property
rights of third parties as a result of the continued operation of its business
as presently conducted and as presently proposed to be conducted.
(m) Tangible Assets. XTEND owns or leases and has good and
---------------
marketable title to and full power of disposition over all owned tangible assets
necessary for the conduct of its business as presently conducted. Each such
owned tangible asset is free and clear of all liens, mortgages, etc. and is
suitable for the purposes for which it presently is used.
-10-
(n) Contracts. Section 3(n) of the Disclosure Schedule lists the
---------
following contracts and other agreements to which XTEND is a party:
(i) any agreement (or group of related agreements) for the
lease of personal property to or from any Person providing for lease payments in
excess of $10,000 per annum;
(ii) any agreement (or group of related agreements) for the
purchase or sale of raw materials, commodities, supplies, products, or other
personal property, or for the furnishing or receipt of services, the performance
of which will extend over a period of more than one year, result in a material
loss to XTEND, or involve consideration in excess of $10,000;
(iii) any agreement concerning a partnership or joint venture;
(iv) any agreement (or group of related agreements) under which
it has created, incurred, assumed, or guaranteed any indebtedness for borrowed
money, or any capitalized lease obligation, in excess of $10,000 or under which
it has imposed a Security Interest on any of its assets, tangible or intangible;
(v) any agreement concerning confidentiality or
noncompetition;
(vi) any agreement with any of the Shareholders and their
affiliates;
(vii) any profit sharing, stock option, stock purchase or
exchange, stock appreciation, deferred compensation, severance, or other plan or
arrangement for the benefit of its current or former directors, officers, and
employees;
(viii) any collective bargaining agreement;
(ix) any agreement for the employment of any individual on a
full-time, part-time, consulting, or other basis providing annual compensation
in excess of $10,000 or providing severance benefits;
(x) any agreement under which it has advanced or loaned any
amount to any of its directors, officers, and employees outside the ordinary
course of business;
(xi) any agreement under which the consequences of a default or
termination could have a material adverse effect on the business, financial
condition, operations, or results of operations of XTEND; or
(xii) any other agreement (or group of related agreements) the
performance of which involves consideration in excess of $10,000.
The Shareholders have delivered to Inventa a correct and complete copy of
each written agreement listed in Section 3(n) of the Disclosure Schedule (as
amended to date) and a written summary setting forth the terms and conditions of
each oral agreement referred to in Section 3(n) of
-11-
the Disclosure Schedule, if any. With respect to each such agreement: (A) the
agreement is legal, valid, binding, enforceable, and in full force and effect;
(B) the agreement will continue to be legal, valid, binding, enforceable, and in
full force and effect on identical terms following the consummation of the
transactions contemplated hereby; (C) no party is in breach or default, and no
event has occurred which with notice or lapse of time would constitute a breach
or default, or permit termination, modification, or acceleration, under the
agreement; and (D) no party has repudiated any provision of the agreement.
(o) Notes and Accounts Receivable. All notes and accounts receivable
-----------------------------
of XTEND are reflected properly on its books and records, and are valid
receivables subject to no setoffs or counterclaims, are current and collectible,
and will be collected in accordance with the terms at their recorded amounts,
subject only to reserve for bad debts set forth on the face of the Most Recent
Balance Sheet (rather than in any notes thereto) as adjusted for the passage of
time through the Closing Date in accordance with the past custom and practice of
the Company.
(p) Powers of Attorney. There are no outstanding powers of attorney
------------------
executed on behalf of XTEND.
(q) Insurance. Section 3(q) of the Disclosure Schedule sets forth a
---------
true copy of each insurance policy (including policies providing property,
casualty, liability, and workers' compensation coverage and bond and surety
arrangements) to which XTEND has been a party, at any time since the date of its
incorporation.
(i) the name, address, and telephone number of the insurance
agent;
(ii) the name of the insurer, the name of the policyholder, and
the name of each covered insured;
(iii) the policy number and the period of coverage;
(iv) the scope (including an indication of whether the coverage
was on a claims made, occurrence, or other basis) and amount (including a
description of how deductibles and ceilings are calculated and operate) of
coverage; and
(v) a description of any retroactive premium adjustments or
other loss-sharing arrangements.
With respect to each such insurance policy: (A) the policy will continue to
be in full force and effect on identical terms following the consummation of the
transactions contemplated hereby; and (B) neither the Company nor any other
party to the policy is in breach or default (including with respect to the
payment of premiums or the giving of notices), and no event has occurred which,
with notice or the lapse of time, would constitute such a breach or default, or
permit termination, modification, or acceleration, under the policy; and (C) no
party to the policy has repudiated any provision thereof. XTEND has been covered
since the date of its incorporation by insurance similar
-12-
in scope and amount. Section 3(q) of the Disclosure Schedule describes any self-
insurance arrangements affecting XTEND.
(r) Litigation. Section 3(r) of the Disclosure Schedule sets forth
----------
each instance in which XTEND (i) is subject to any outstanding injunction,
judgment, order, decree, ruling, or charge or (ii) is a party or is threatened
to be made a party to any action, suit, proceeding, hearing, or investigation
of, in, or before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator. None of
the actions, suits, proceedings, hearings, and investigations set forth in
Section 3(r) of the Disclosure Schedule is likely to result in any material
adverse change in the business, financial condition, operations, results of
operations, of XTEND. To the knowledge of the Shareholders and the directors and
officers of XTEND no such action, suit, proceeding, hearing, or investigation
will be brought against XTEND.
(s) Employees. To the knowledge of each of the Shareholders and the
---------
directors and officers of XTEND, no executive, key employee, or group of
employees has any plans to terminate employment with XTEND. No employee of XTEND
is in violation of any term of any employment contract, patent disclosure
agreement or any other contract or agreement relating to the relationship of
such employee with XTEND or any other party because of the nature of the
business conducted by XTEND. All employees of XTEND whose employment
responsibility requires access to confidential or proprietary information of
XTEND have executed and delivered certain "Employment Agreements" substantially
in the form Section 3(s) of the Disclosure Schedule) and all such Employment
Agreements are in full force and effect, and enforceable in accordance with
their terms, and shall be and remain applicable for any and all acts by
employees of XTEND occurring prior to Closing, but shall not be applicable to
acts occurring after the Closing. Upon Closing, all employees of XTEND shall
execute and deliver to Inventa the Inventa Confidential Information and
Invention Agreement, which Agreements shall supersede any and all prior XTEND
employees employment and confidentiality agreements, including the "Employment
Agreements" referenced herein, and shall apply to any and all actions by
employees occurring subsequent to Closing. XTEND is not a party to any labor
agreement with respect to its employees with any labor organization, union,
group or association. XTEND has not experienced any attempt by organized labor
or its representatives to make XTEND conform to demands of organized labor
relating to its employees or to enter into a binding agreement with organized
labor that would cover the employees of XTEND. There is no labor strike or labor
disturbance pending or threatened against XTEND nor is any grievance currently
being asserted, and XTEND has not experienced a work stoppage or other labor
difficulty.
(t) Employee Benefits.
-----------------
(i) Except as set forth in Section 3(t) of the Disclosure
Schedule, the XTEND does not maintain, contribute to or have any liability with
respect to any Employee Benefit Plan as defined in the Employee Retirement
Income Security Act of 1974, as amended ("ERISA").
(u) Guaranties. XTEND is not a guarantor or otherwise liable for any
----------
liability or obligation (including indebtedness) of any other person.
-13-
(v) Certain Business Relationships with XTEND. Except as set forth
-----------------------------------------
in Section 3(v) of the Disclosure Schedule, none of the Shareholders, officers
or directors of XTEND or their respective affiliates has been involved in any
business arrangement or relationship with XTEND within the past 12 months, and
none of the Shareholders or their respective affiliates owns any asset, tangible
or intangible, that is used in the business of XTEND.
(w) Disclosure. The representations and warranties contained in this
----------
Section 3 do not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements and
information contained in this Section 3 not misleading.
4. Pre-Closing Covenants. The Parties agree as follows with respect to
---------------------
the period between the execution of this Agreement and the Closing:
(a) General. Each of the Parties will use his or its best efforts to
-------
take all action and to do all things necessary, proper, or advisable in order to
consummate and make effective the transactions contemplated by this Agreement
(including satisfaction, but not waiver, of the closing conditions set forth in
Section 6 below).
(b) Notices and Consents. The Shareholders will cause XTEND to give
--------------------
any notices to third parties, and will cause XTEND to use its best efforts to
obtain any third party consents that Inventa may request in connection with the
matters referred to in Section 3(c) above. Each of the Parties will (and the
Shareholders will cause XTEND to) give any notices to, make any filings with,
and use its best efforts to obtain any authorizations, consents, and approvals
of governments and governmental agencies in connection with the matters referred
to in Section 2(a)(ii), Section 2(b)(ii), and Section 3(c) above.
(c) Operation of Business. The Shareholders will not cause or permit
---------------------
XTEND to engage in any practice, take any action, or enter into any transaction
outside the ordinary course of business. Without limiting the generality of the
foregoing, the Shareholders will not cause or permit XTEND to (i) declare, set
aside, or pay any dividend or make any distribution with respect to its capital
stock or redeem, exchange, or otherwise acquire any of its capital stock, or
(ii) otherwise engage in any practice, take any action, or enter into any
transaction of the sort described in Section 3(h) above.
(d) Compensation. XTEND will not increase compensation or pay
------------
bonuses or similar payments to any officer, director, employee or consultant
prior to the Closing.
(e) Preservation of Business. The Shareholders will cause XTEND to
------------------------
keep its business and properties substantially intact, including its present
operations, physical facilities, working conditions, and relationships with
lessors, licensors, suppliers, customers, and employees.
(f) Full Access. Each of the Shareholders will permit, and the
-----------
Shareholders will cause XTEND to permit, representatives of Inventa to have full
access to all premises, properties, personnel, books, records (including tax
records), contracts, and documents of or pertaining to XTEND.
-14-
(g) Notice of Developments. The Shareholders will give prompt
written notice to Inventa of any material adverse development causing a breach
of any of the representations and warranties in Section 3 above. Each Party will
give prompt written notice to the others of any material adverse development
causing a breach of any of his or its own representations and warranties in
Section 2 above. No disclosure by any Party pursuant to this Section 4(g),
however, shall be deemed to amend or supplement the Disclosure Schedule or to
prevent or cure any misrepresentation, breach of warranty, or breach of
covenant.
(h) Exclusivity. Neither XTEND nor any of the Shareholders will (and
-----------
the Shareholders will not cause or permit XTEND to) (i) solicit, initiate, or
encourage the submission of any proposal or offer from any third party relating
to the acquisition of any capital stock or other voting securities, or any
substantial portion of the assets, of XTEND (including any acquisition
structured as a merger, consolidation, or share exchange) or (ii) participate in
any discussions or negotiations regarding, furnish any information with respect
to, assist or participate in, or facilitate in any other manner any effort or
attempt to do or seek any of the foregoing. None of the Shareholders will vote
their XTEND Shares in favor of any such acquisition structured as a merger,
consolidation, or share exchange. The Shareholders will notify Inventa promptly
if any third party makes any proposal, offer, inquiry, or contact with respect
to any of the foregoing.
(i) Options. Inventa agrees to reserve 170,000 shares of Common
-------
Stock in its current 1993 Stock Option Plan for grant as employee stock options
(the "Options") to Company non-Shareholder Employees (the "Employees') of record
on the Closing Date. Immediately upon Closing, the Options shall be granted to
the Employees at an exercise price to be determined at then current fair market
value by INVENTA's Board of Directors at its next meeting.
5. Post-Closing Covenants. The Parties agree as follows with respect to
----------------------
the period following the Closing:
(a) General. In case at any time after the Closing any further
-------
action is necessary or desirable to carry out the purposes of this Agreement,
each of the Parties will take such further action (including the execution and
delivery of such further instruments and documents) as any other Party
reasonably may request, all at the sole cost and expense of the requesting Party
(unless the requesting Party is entitled to indemnification therefor under
Section 8 below). The Shareholders acknowledge and agree that from and after the
Closing Inventa will be entitled to possession of all documents, books, records
(including Tax records), agreements, and financial data of any sort relating to
XTEND.
(b) Transition. None of the Shareholders will take any action that
----------
is designed or intended to have the effect of discouraging any lessor, licensor,
customer, supplier, or other business associate of XTEND from maintaining the
same business relationships with XTEND after the Closing as it maintained with
XTEND prior to the Closing. Each of the Shareholders will refer all customer
inquiries relating to the business of XTEND to Inventa from and after the
Closing.
(c) Confidentiality. Each of the Shareholders will treat and hold as
---------------
such all of the Confidential Information, refrain from using any of the
Confidential Information except in
-15-
connection with this Agreement, and deliver promptly to Inventa or destroy, at
the request and option of Inventa, all tangible embodiments (and all copies) of
the Confidential Information which are in his or its possession. In the event
that any of the Shareholders is requested or required (by oral question or
request for information or documents in any legal proceeding, interrogatory,
subpoena, civil investigative demand, or similar process) to disclose any
Confidential Information, that Shareholder will notify Inventa promptly of the
request or requirement so that Inventa may seek an appropriate protective order
or waive compliance with the provisions of this Section 5(c). If, in the absence
of a protective order or the receipt of a waiver hereunder, any of the
Shareholders is, on the advice of counsel, compelled to disclose any
Confidential Information to any tribunal or else stand liable for contempt, that
Shareholder may disclose the Confidential Information to the tribunal; provided,
---------
however, that the disclosing Shareholder shall use his or its best efforts to
-------
obtain, at the request of Inventa, an order or other assurance that confidential
treatment will be accorded to such portion of the Confidential Information
required to be disclosed as Inventa shall designate. The foregoing provisions
shall not apply to any Confidential Information which is generally available to
the public immediately prior to the time of disclosure.
6. Conditions to Obligation to Close.
---------------------------------
(a) Conditions to Obligation of Inventa. The obligation of Inventa
-----------------------------------
to consummate the transactions to be performed by it in connection with the
Closing is subject to satisfaction of the following conditions:
(i) the representations and warranties set forth in Section
2(a) and Section 3 above shall be true and correct in all material respects at
and as of the Closing Date;
(ii) the Shareholders shall have performed and complied with all
of their covenants hereunder in all material respects through the Closing;
(iii) each individual Employee Shareholder listed in Section
6(a)(iii) of the Disclosure Schedule shall have executed a Stock Restriction
Agreement and a "Noncompetition Agreement" in the form and substance as set
forth in Exhibit C and D;
(iv) XTEND shall have procured all requisite third party
consents specified in Section 3(c) above;
(v) no action, suit, or proceeding shall be pending or
threatened before any court or quasi-judicial or administrative agency of any
federal, state, local, or foreign jurisdiction or before any arbitrator wherein
an unfavorable injunction, judgment, order, decree, ruling, or charge would (A)
prevent consummation of any of the transactions contemplated by this Agreement,
(B) cause any of the transactions contemplated by this Agreement to be rescinded
following consummation, (C) affect adversely the right of Inventa to own XTEND
Shares free and clear of any Security Interests and to control XTEND, or (D)
affect adversely the right of XTEND to own its assets and to operate its
business (and no such injunction, judgment, order, decree, ruling, or charge
shall be in effect);
-16-
(vi) the Shareholder execution of this Agreement shall be a
representation to the effect that each of the conditions specified above in
Section 6(a)(i)-(v) is satisfied in all respects; and
(vii) Inventa shall have received from counsel to the
Shareholders an opinion in form and substance as set forth in Exhibit D attached
hereto, addressed to Inventa, and dated as of the Closing Date.
(viii) all actions to be taken by the Shareholders in connection
with consummation of the transactions contemplated hereby and all certificates,
opinions, instruments, and other documents required to effect the transactions
contemplated hereby will be satisfactory in form and substance to Inventa;
(ix) The approval of this Agreement by the respective Board of
Directors of Inventa and XTEND;
(x) The completion of Inventa's due diligence investigation to
its satisfaction in its sole discretion;
Inventa may waive any condition specified in this Section 6(a) if it
executes a writing so stating at or prior to the Closing.
(b) Conditions to Obligation of the Shareholders. The obligation of
--------------------------------------------
the Shareholders to consummate the transactions to be performed by them in
connection with the Closing is subject to satisfaction of the following
conditions:
(i) the representations and warranties set forth in Section
2(b) above shall be true and correct in all material respects at and as of the
Closing Date;
(ii) Inventa shall have performed and complied with all of its
covenants hereunder in all material respects through the Closing;
(iii) no action, suit, or proceeding shall be pending before any
court or quasi-judicial or administrative agency of any federal, state, local,
or foreign jurisdiction wherein an unfavorable injunction, judgment, order,
decree, ruling, or charge would (A) prevent consummation of any of the
transactions contemplated by this Agreement or (B) cause any of the transactions
contemplated by this Agreement to be rescinded following consummation (and no
such injunction, judgment, order, decree, ruling, or charge shall be in effect);
(iv) Inventa's execution of this Agreement shall be a
representation to the effect that each of the conditions specified above in
Section 6(b)(i)-(iii) is satisfied in all respects; and
-17-
(v) the Shareholders shall have received from counsel to Inventa
an opinion in form and substance as set forth in Exhibit E attached hereto,
addressed to the Shareholders and dated as of the Closing Date.
The Shareholders may waive any condition specified in this Section 6(b) if
they execute a writing so stating at or prior to the Closing.
7. Survival of Representations and Warranties. All of the
representations and warranties of the Parties contained hereinabove shall
survive the Closing hereunder (even if Inventa knew or had reason to know of any
misrepresentation or breach of warranty at the time of Closing) and continue in
full force and effect for a period of twenty-four (24) months thereafter, except
that those set forth in Section 3(k) ("Tax Matters") shall survive until the
expiration of the applicable Statute of Limitations.
8. General Indemnification.
-----------------------
(a) Subject to Section 8(c) hereunder, the Shareholders hereby
jointly and severally indemnify and agree to hold harmless Inventa (at and after
the Closing Date) in respect of any claims, costs, demands, liabilities, losses
and expenses (including, without limitation, reasonable legal and other out-of-
pocket fees and expenses for investigating, defending or settling any actions or
threatened actions) (all of which are referred to herein individually as a
"Deficiency" and collectively as "Deficiencies") incurred or suffered by Inventa
in connection with any misrepresentation or breach of any representation,
warranty, covenant or agreement made by XTEND or any Shareholder in this
Agreement (including but not limited to representations made by the other
Shareholders pursuant to Section 2(a), or in any certificate, instrument,
schedule or document given by XTEND or any Shareholder pursuant to this
Agreement or the Escrow Agreement.
(b) Notwithstanding the foregoing, neither the Shareholders nor
Inventa shall have any obligation to indemnify and/or hold the other harmless in
respect of any claims, costs, demands, liabilities, losses, and expenses of any
kind (including, without limitation, reasonable legal and other out-of-pocket
fees and expenses for investigating, defending, or settling any actions or
threatened actions) made by Sybase, Inc. relating to violations by any
Shareholder or any employee of XTEND or Inventa of any non-competition, and/or
non-solicitation and/or any other hiring agreements entered into by such
Shareholder or employee with Sybase, Inc.
(c) Shareholders shall not be liable to Inventa under this Article 8
or otherwise under this Agreement for any claims, costs, demands, liabilities,
losses and expenses of any kind (including without limitation, reasonable legal
and other out-of-pocket fees and expenses for investigating, defending, or
settling any actions or threatened actions arising out of claims made by third
party(s) relating to Shareholders violation of any term(s) of this Agreement,
until the amount otherwise due Inventa for indemnification as provided herein
exceeds Seventy-Five Thousand Dollars ($75,000) in the aggregate, in which case,
Shareholders shall be liable to Inventa for all such amounts, including without
limitation, the first Seventy-Five Thousand Dollars ($75,000) thereof;
-18-
provided, however, that Shareholders indemnification obligations under Section
8(a), and otherwise, shall in no event exceed an aggregate of $2,500,000.
(d) Losses Net of Insurance and Tax Benefits. In calculating any
----------------------------------------
Deficiency suffered by the Company, Inventa or any affiliate of any of them,
arising out of this Agreement, there shall be deducted any insurance recovery in
respect of such Deficiency. Further, any indemnity payment hereunder with
respect to any Deficiency shall be calculated on an "after-tax basis", meaning
that amount which is sufficient to compensate the indemnified party for the
event giving rise to such Deficiency determined after taking into account all
reduction in federal, state, local and foreign taxes (including estimated taxes)
payable by the indemnified party as a result of the event giving rise to such
Deficiency.
9. Establishment of Escrow. In order to provide protection for Inventa
-----------------------
from and after the Closing, an escrow account ("Escrow") shall be established on
behalf of Inventa, which Escrow shall, (i) be subject to the provisions of the
Escrow Agreement, attached hereto as Exhibit C, and (ii) provide the first funds
from which claims under the indemnification provisions set forth herein shall be
paid. The Escrow shall be funded, as of Closing, with 551,948 shares of Inventa
Common Stock otherwise issuable hereunder (the "Escrow Shares") to those
Shareholders who enter into the Shareholders Restricted Stock Agreements
referenced in Section 6(a)(iii) hereunder (the "Stock Agreements") to be
available for repurchase pursuant to the Inventa Repurchase Option provision
delineated in the Shareholders Restricted Stock Agreements, of which Escrow
Shares 337,500 shall also be held to provide a fund (to the extent that the
value of said 337,500 Escrow Shares satisfies the $2,500,000 Shareholders
Indemnification obligation set forth in Section 8(c)) for the Shareholders
indemnification of Inventa, hereunder. For purposes of this Section 9, the per
share value of said 337,500 Escrow Shares shall be, (i) if Inventa is then a
public company, the average of the Closing prices of Inventa common stock for
the thirty (30) trading days immediately preceding the Shareholders deemed
receipt of notice of a claim, delivered pursuant to Section 11 (g) or (ii) if
Inventa is then not a public Company, $7.41. If Inventa is a public company but
its shares are not then being traded, such per share value shall be determined
by an appraiser mutually acceptable to the Parties.
10. Termination; Remedies.
---------------------
(a) Termination of Agreement. Certain of the Parties may terminate
this Agreement as provided below:
(i) Inventa and the Shareholders may terminate this Agreement by
mutual written consent at any time prior to the Closing;
(ii) Inventa may terminate this Agreement by giving written notice
to the Shareholders at any time prior to the Closing (A) in the event any of the
Shareholders has breached any representation, warranty, or covenant contained in
this Agreement in any material respect, and if such breach is capable of being
cured, Inventa shall notify the Shareholders of the breach, and the breach has
continued without cure for a period of ten days after the notice of breach or
(B) if the Closing shall not have occurred on or before January 31, 2000, by
reason of the failure of any
-19-
condition precedent under Section 6(a) hereof (unless the failure results
primarily from Inventa itself breaching any representation, warranty, or
covenant contained in this Agreement); and
(iii) the Shareholders may terminate this Agreement by giving
written notice to Inventa at any time prior to the Closing (A) in the event
Inventa has breached any representation, warranty, or covenant contained in this
Agreement in any material respect, if such breach is capable of being cured, the
Shareholders shall notify Inventa of the breach, and the breach has continued
without cure for a period of ten days after the notice of breach or (B) if the
Closing shall not have occurred on or before January 31, 2000, by reason of the
failure of any condition precedent under Section 6(b) hereof (unless the failure
results primarily from any of the Shareholders themselves breaching any
representation, warranty, or covenant contained in this Agreement).
(b) Effect of Termination. If any Party terminates this Agreement
---------------------
pursuant to Section 10(a) above, all rights and obligations of the Parties
hereunder shall terminate without any liability of any Party to any other Party
(except for any liability of any Party then in breach).
11. Miscellaneous.
-------------
(a) Press Releases and Public Announcements. No Party shall issue any
---------------------------------------
press release or make any public announcement relating to the subject matter of
this Agreement without the prior written approval of Inventa and the
Shareholders; provided, however, that any Party may make any public disclosure
-------- -------
it believes in good faith is required by applicable law or any listing or
trading agreement concerning its publicly-traded securities (in which case the
disclosing Party will use its reasonable best efforts to advise the other
Parties prior to making the disclosure).
(b) No Third-Party Beneficiaries. This Agreement shall not confer any
----------------------------
rights or remedies upon any Person other than the Parties and their respective
successors and permitted assigns.
(c) Entire Agreement. This Agreement (including the documents
----------------
referred to herein) constitutes the entire agreement among the Parties and
supersedes any prior understandings, agreements, or representations by or among
the Parties, written or oral, to the extent they related in any way to the
subject matter hereof.
(d) Succession and Assignment. This Agreement shall be binding upon
-------------------------
and inure to the benefit of the Parties named herein and their respective
successors and permitted assigns. No Party may assign either this Agreement or
any of his or its rights, interests, or obligations hereunder without the prior
written approval of Inventa and the affected Shareholders; provided, however,
-------- -------
that Inventa may (i) assign any or all of its rights and interests hereunder to
one or more of its affiliates and (ii) designate one or more of its affiliates
to perform its obligations hereunder (in any or all of which cases Inventa
nonetheless shall remain responsible for the performance of all of its
obligations hereunder).
-20-
(e) Counterparts. This Agreement may be executed in one or more
------------
counterparts, each of which shall be deemed an original but all of which
together will constitute one and the same instrument.
(f) Headings. The Section headings contained in this Agreement are
--------
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) Notices. All notices, requests, demands, claims, and other
-------
communications hereunder will be in writing. Any notice, request, demand, claim,
or other communication hereunder shall be deemed duly given if (and then two
business days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:
If to the Shareholders: Simultaneous Copy to:
---------------------- --------------------
Xxxxx Xxxxxx Xxxxx Tischman
Xxxxxxx & Gross, P.A.
At the respective addresses
shown on Schedule 1 hereto Xxx Xxxxxxxxxx Xxxxx
Xxxxxx, XX 00000-0000
Attn: Xxxxxx X. Xxxxxxxx, Esq.
If to Inventa: Simultaneous Copy to:
------------- --------------------
Inventa Corporation Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxxxxxxx Xxxxx, Xxxxx 000 000 Xxxx Xxxx Xxxx
Xxxxxxx Xxxxxx, XX 00000 Xxxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. X'Xxxxxxx, Esq.
Any Party may send any notice, request, demand, claim, or other
communication hereunder to the intended recipient at the address set forth above
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, telex, ordinary mail, or electronic mail), but no such
notice, request, demand, claim, or other communication shall be deemed to have
been duly given unless and until it actually is received by the intended
recipient. Any Party may change the address to which notices, requests,
demands, claims, and other communications hereunder are to be delivered by
giving the other Parties notice in the manner herein set forth.
(h) Governing Law. This Agreement shall be governed by and construed
-------------
in accordance with the domestic laws of the State of California without giving
effect to any choice or conflict of law provision or rule (whether of the State
of California or any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California.
(i) Amendments and Waivers. No amendment of any provision of this
----------------------
Agreement shall be valid unless the same shall be in writing and signed by
Inventa and the
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Shareholders. No waiver by any Party of any default, misrepresentation, or
breach of warranty or covenant hereunder, whether intentional or not, shall be
deemed to extend to any prior or subsequent default, misrepresentation, or
breach of warranty or covenant hereunder or affect in any way any rights arising
by virtue of any prior or subsequent such occurrence.
(j) Severability. Any term or provision of this Agreement that is
------------
invalid or unenforceable in any situation in any jurisdiction shall not affect
the validity or enforceability of the remaining terms and provisions hereof or
the validity or enforceability of the offending term or provision in any other
situation or in any other jurisdiction.
(k) Attorneys' Fees. If any litigation or any other proceeding is
---------------
commenced in connection with or related to this Agreement, the losing party
shall pay the expenses, including but not limited to, the reasonable attorneys'
fees and expenses, including costs, and costs of attorney travel, of the
prevailing party. The court shall be entitled to prorate said fees and expenses
between the parties in the event that a suit or proceeding is successful only in
part.
(l) Construction. The Parties have participated jointly in the
------------
negotiation and drafting of this Agreement. In the event an ambiguity or
question of intent or interpretation arises, this Agreement shall be construed
as if drafted jointly by the Parties and no presumption or burden of proof shall
arise favoring or disfavoring any Party by virtue of the authorship of any of
the provisions of this Agreement. Any reference to any federal, state, local, or
foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise. The
word "including" shall mean including without limitation. The Parties intend
that each representation, warranty, and covenant contained herein shall have
independent significance. If any Party has breached any representation,
warranty, or covenant contained herein in any respect, the fact that there
exists another representation, warranty, or covenant relating to the same
subject matter (regardless of the relative levels of specificity) that the Party
has not breached shall not detract from or mitigate the fact that the Party is
in breach of the first representation, warranty, or covenant.
(m) Incorporation of Exhibits and Schedules. The Exhibits and
---------------------------------------
Schedules identified in this Agreement are incorporated herein by reference and
made a part hereof.
(n) Specific Performance. Each of the Parties acknowledges and
--------------------
agrees that the other Parties could be damaged irreparably in the event any of
the provisions of this Agreement are not performed in accordance with their
specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Parties may be entitled to an injunction or injunctions to
prevent breaches of the provisions of this Agreement and to enforce specifically
this Agreement and the terms and provisions hereof in any action instituted in
any court of the United States or any state thereof having jurisdiction over the
Parties and the matter in addition to any other remedy to which they may be
entitled, at law or in equity.
(o) Submission to Jurisdiction. Each of the Parties submits to the
--------------------------
jurisdiction of any state or federal court sitting in Santa Xxxxx County,
California, in any action or proceeding arising out of or relating to this
Agreement and agrees that all claims in respect of the action or
-22-
proceeding may be heard and determined in any such court. Each Party also agrees
not to bring any action or proceeding arising out of or relating to this
Agreement in any other court. Each of the Parties waives any defense of
inconvenient forum to the maintenance of any action or proceeding so brought and
waives any bond, surety, or other security that might be required of any other
Party with respect thereto. Each Party agrees that a final judgment in any
action or proceeding so brought shall be conclusive and may be enforced by suit
on the judgment or in any other manner provided by law or at equity.
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of
the date first above written.
INVENTA: SHAREHOLDERS:
INVENTA CORPORATION
/s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Xxxxxxx X. Xxxxxxxx
By: /s/ XXXXX X. XXXXXXX
------------------------------
Title: President & CEO /s/ Xxxx Xxxxxxx
--------------------------- --------------------------------
Xxxx Xxxxxxx
COMPANY:
/s/ Xxxx Xxxx
--------------------------------
Xxxx Xxxx
XTEND-Tech, INC.
By: /s/ XXXXXXX X. XXXXXXXX /s/ Xxxxx Xxxx
------------------------------ --------------------------------
Xxxxx Xxxx
Title: PRESIDENT & CEO
/s/ Xxxx X. XxXxxxx
--------------------------------
Xxxx XxXxxxxx
/s/ Xxxxxxx Xxxxxxxx
--------------------------------
Xxxxxxx Xxxxxxxx
/s/ Xxxxx Xxxx
--------------------------------
Xxxxx Xxxx
(Shareholder Signatures Continued
Next Page)
Signature Page to Agreement and Plan of Reorganization Agreement
/s/ Xxxxx X. Xxxxxx
--------------------------------
Xxxxx X. Xxxxxx
/s/ Xxxxx Xxxxxx
--------------------------------
Xxxxx Xxxxxx
/s/ Xxxxxx X. DeCapuq
--------------------------------
Xxxxxx X.DeCapuq
/s/ Xxxxxx Xxxxx
--------------------------------
Xxxxxx Xxxxx
International Database Communication
Systems, Inc./IDCS
By: /s/ Xxxxx X. Xxxxxx
-----------------------------
Xxxxx X. Xxxxxx
Chairman/CEO
Signature Page to Agreement and Plan of Reorganization Agreement
