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EXHIBIT 10.7(K)
REORGANIZATION AGREEMENT
AGREEMENT OF PURCHASE AND SALE OF STOCK
I. INTRODUCTION
A. Introductory Clause
This agreement is made as of 12-31-97 at San Jose, California,among
Compressent ("Buyer"), a Florida corporation, having its principal office at
0000 Xxxxxxxx Xxx., Xxxxx 000, Xxx Xxxx, XX 00000; List of SOFTLINK SHAREHOLDERS
(collectively referred to as "Shareholders"), Softlink, Inc. (Corporation), a
California Corporation, having its principal office at 0000 X. Xx Xxxxxx Xxxx,
Xxxxx #00, Xxxxxxxx Xxxx, XX 00000-0000. Shareholders, and Corporation, are
collectively referred to in this agreement as Selling Parties.
B. Recitals
Shareholders have represented that collectively, they own all the
outstanding stock of Corporation. Buyer desires to purchase from Shareholders
and shareholders desire to sell to Buyer all the outstanding stock of
Corporation (the "Shares"); Corporation desires that this transaction be
consummated. Buyer, Shareholders and Corporation enter into this transaction
with the purpose of having Corporation become a wholly owned subsidiary of
Buyer. In consideration of the mutual covenants, agreements, representations,
and warranties contained in this agreement, the parties agree as follows:
C. Tax-Free Reorganization
Compressant and Softlink adopt this agreement as a plan for reorganization
under Section 368(a)(1)(B) of the Internal Revenue Code.
D. Plan of Reorganization
The Shareholders are the owners of all the issued and outstanding stock of
Softlink, which consists of 4,059,449 shares of common stock. It is the
intention of the parties hereto that all of the issued and outstanding capital
stock of Softlink shall be acquired by Buyer in exchange solely for its voting
stock.
II. ARTICLE ONE: PURCHASE AND SALE OF SHARES
A. Sale and Transfer of Shares
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Subject to the terms and conditions set forth in this agreement, on the
Closing Date, Shareholders will transfer and convey the Shares to Buyer, and
Buyer will acquire the Shares from Shareholders.
B. Exchange of Shares
Compresent and the Shareholders agree that all of the 4,059,449 shares
of Softlink shall be exchanged with compresent for shares of the common stock
of Compressent. The following numbers of Compressent common shares will, on the
closing date, as hereinafter defined, be delivered to the individual
Shareholders in exchange for their Softlink shares as hereinafter set forth:
No. of Compressent Corporation
Shareholder N. of Softlink Shares shares to be issued
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Xxxxxxx Xxx 1,525,000
Xxxxxx Xxxxx 1,525,000
Xxxx Kit Yu 85,000
Xxxxxxx Xxx 110,000
Xxxxxx Xxxxx 26,000
Xxxxx Xx 5,000
Xxxxxxx Xxx 60,000
Xxx Xxxxxx 10,000
M & C Consulting 6,000
Xxxxxx Xxx 67,000
Xxx Xxxxx 53,333
Chi-Xxx Xxxxx 20,000
Xxxxx Xxx 13,600
Austin Hills 374,145
Neddie Postohica 20,000
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Commercial Scientific 158,594
Corporation
Such shares shall be issued in certificates of such denominations,
amounts, and names as may be requested by the respective Shareholders.
Each certificate of Compressent will bear the following legend:
"THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR
INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED (THE "ACT"). SUCH SHARES MAY NOT BE SOLD OR
TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT RELATING TO SUCH ACT, PROVIDED THAT, IF
REQUESTED BY THE COMPANY, AN OPTION OF COUNSEL REASONABLY SATISFACTORY
IN FORM AND SUBSTANCE IS FURNISHED TO THE COMPANY THAT AN EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT IS AVAILABLE."
C. DELIVERY OF SHARES
On the closing date, the Shareholders will deliver certificates
for the shares of Softlink duly endorsed with signatures guaranteed and
with documentary stamps affixed at the Shareholders' expense of the
Compressent shares, on which documentary stamp faxes will be paid by
Compressent will be made to the Shareholders as above set forth.
Delivery will be made at such place as may be determined by the Parties.
Time is of the essence.
III. ARTICLE TWO: REPRESENTATIONS AND WARRANTIES OF SELLING PARTIES
Selling Parties, jointly and severally, represent and warrant that:
A. ORGANIZATION, STANDING, AND QUALIFICATION OF CORPORATION
Corporation is a corporation duly organized, validly existing,
and in good standing under the laws of the State of California and has
all necessary corporate powers to own its properties and to operate its
business as now owned and operated by it. Neither the ownership of its
properties nor the nature of its business requires Corporation to be
qualified in any jurisdiction other than where the Corporation was
incorporated.
B. STOCK OF CORPORATION
1. CAPITAL STRUCTURE
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The authorized capital stock of Corporation consists of 100,000,000 shares
of common stock, with no par value of which 4,059,449 shares (the "Shares") are
issued and outstanding. All the Shares are validly issued, fully paid, and
nonassessable, and such shares have been so issued in full compliance with all
federal and state securities laws. There are no outstanding subscriptions,
options, rights, warrants, convertible securities, or other agreements or
commitments obligating Corporation to issue or to transfer from treasury any
additional shares of its capital stock of any class.
2. TITLE TO SHARES
Shareholders are the owner, beneficially and of record, of all the Shares
free and clear of all liens, encumbrances, security agreements, equities,
options, claims, charges, and restrictions. Shareholder has full power to
transfer the Shares to Buyer without obtaining the consent or approval of any
other person or governmental authority.
C. FINANCIAL STATEMENTS
Exhibit Two (2) to this agreement sets forth unaudited consolidated and
consolidating balance sheets of Corporation as of November 30, 1997, and
November 30, 1997, together with related unaudited consolidated and
consolidating statements of income and retained earnings, certified by the
Certified Public Accountant for the Corporation as accurately reflecting the
financial condition of Corporation for those periods and accurately reflecting
all information normally reported to Corporation's independent public
accountants for the preparation of Corporation's financial statements. The
financial statements in Exhibit Two (2) are referred to as the financial
statements. The financial statements have been prepared in accordance with
generally accepted accounting principles consistently followed by Corporation
throughout the periods indicated, and fairly present the financial position of
Corporation as of the respective dates of the balance sheets included in
the financial statements, and the results of its operations for the respective
periods indicated.
D. ABSENCE OF SPECIFIED CHANGES
Since November 30, 1997 there has not been any:
(1) Transaction by Corporation except in the ordinary course of
business as conducted on that date;
(2) Capital expenditure by Corporation exceeding $20,000;
(3) Material adverse change in the financial condition,
liabilities, assets, business, or prospects of Corporation;
(4) Destruction, damage to, or loss of any asset of Corporation
(whether nor not covered by insurance) that materially and adversely
affects the financial condition, business, or prospects of Corporation;
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(5) Change in accounting methods or practices (including, without
limitation, any change in depreciation or amortization policies or rates)
by Corporation;
(6) Revaluation by Corporation of any of its assets;
(7) Declaration, setting aside, or payment of a dividend or other
distribution in respect to the capital stock of Corporation, or any
direct or indirect redemption, purchase, or other acquisition by
Corporation of any of its shares of capital stock;
(8) Increase in the salary or other compensation payable or to
become payable by Corporation to any of its officers, directors, or
employees, or the declaration, payment, or commitment of obligation of any
kind for the payment, by Corporation or Subsidiary of a bonus or other
additional salary or compensation to any such person;
(9) Sale or transfer of any asset of Corporation, except in the
ordinary course of business;
(10) Amendment or termination of any contract, agreement, or
license to which corporation is a party, except in the ordinary course of
business;
(11) Loan by Corporation to any person or entity, or guaranty by
Corporation or Subsidiary of any loan;
(12) Mortgage, pledge, or other encumbrance of any asset of
Corporation;
(13) Waiver or release of any right or claim of Corporation, except
in the ordinary course of business;
(14) Commencement or notice or threat of commencement of any civil
litigation or any governmental proceeding against or investigation of
Corporation or the affairs of either of them;
(15) Labor trouble or claim of wrongful discharge or other unlawful
labor practice or action;
(16) Issuance or sale by Corporation of any shares of its capital
stock of any class, or of any other of its securities;
(17) Agreement by Corporation to do any of the things described in
the preceding clauses (1) through (16); or
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(18) Other event or condition of any character that has or might
reasonably have a material and adverse effect on the financial condition,
business, assets, liabilities, or prospects of Corporation.
E. ABSENCE OF UNDISCLOSED LIABILITIES
Corporation has no debt, liability, or obligation of any nature, whether
accrued, absolute, contingent, or otherwise, and whether due or to become due,
that is not reflected or reserved against in Corporation's consolidated balance
sheet as of November 30, 1997, included in the financial statements, except
for (1) those that may have been incurred after the date of that consolidated
balance sheet and (2) those that are not required by generally accepted
accounting principles to be included in a balance sheet. All debts,
liabilities, and obligations incurred after that date were incurred in the
ordinary course of business and are usual and normal in amount both
individually and in the aggregate.
F. TAX RETURNS AND AUDITS
Within the times and in the manner prescribed by law, Corporation has
filed all tax returns required by law and have paid all taxes, assessments, and
penalties due and payable. The provisions for taxes reflected in Corporation's
consolidated balance sheet as of November 30, 1997, are adequate for any and
all required taxes for the period ending on the date of that balance sheet and
for all prior periods, whether or not disputed. There are no present disputes
as to taxes of any nature payable by Corporation.
G. TITLE TO ASSETS
Corporation has good and marketable title to all their respective assets
and interests in assets, whether real, personal, mixed, tangible, or intangible
which constitute all the assets and interests in assets that are used in the
businesses of Corporation and Subsidiary. All these assets are free and clear
of restrictions on or conditions to transfer or assignment, and free and clear
of mortgages, liens, pledges, charges, encumbrances, equities, claims,
easements, rights of way, covenants, conditions, or restrictions, except for
(1) those disclosed in Corporation's consolidated balance sheet as of November
30, 1997 included in the financial statements, (2) the lien of current taxes not
yet due and payable; and (3) possible minor matters that, in the aggregate,
are not substantial in amount and do not materially detract from or interfere
with the present or intended use of any of these assets or materially impair
business operations. Corporation is not in default or in arrears in any material
respect under any lease. All real property and tangible personal property of
Corporation is in good operating condition and repair, ordinary wear and tear
excepted. Corporation is in possession of all premises leased to them from
others. Neither Shareholders; nor any officer, director, or employee of
Corporation; nor any spouse, child, or other relative of any of these persons,
owns, or has any interest, directly or indirectly, in any of the real or
personal property owned by or leased to Corporation or any copyrights, patents,
trademarks, trade names, or trade secrets licensed by Corporation. Corporation
does not occupy any real property in violation of any law, regulation, or
decree.
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H. COMPLIANCE WITH LAWS
Corporation has complied in all material respects with all applicable
environmental protection laws and regulations and have not been cited for any
violation of any such law or regulation. No material capital expenditures will
be required for compliance with any applicable laws or regulations now in force
relating to the protection of the environment. There is no pending audit known
to Selling Parties or any of their officers by any governmental authority with
respect to groundwater, soil, or any monitoring; the storage, burial, release,
transportation, or disposal of hazardous substances; or the use of underground
storage tanks by Corporation or relating to the facilities of Corporation.
Corporation does not have any agreement with any third party or local
governmental authority relating to any such environmental matter or any
environmental cleanup.
I. LITIGATION
There is not pending, or, to the best actual knowledge of Shareholders, and
Corporation, threatened, any suit, action, arbitration, or legal
administrative, or other proceeding, or governmental investigation against or
affecting Corporation, or any of their businesses, assets, or financial
condition. Corporation is not in default with respect to any order, writ,
injunction, or decree of any federal, state, local or foreign court,
department, agency, or instrumentality.
J. AGREEMENT WILL NOT CAUSE BREACH OR VIOLATION
The consummation of the transactions contemplated by this agreement will
not result in nor constitute any of the following: (1) a breach of any term or
provision of this agreement; (2) a default or any event that, with notice or
lapse of time or both, would be a default, breach, or violation of the articles
of incorporation or bylaws of Corporation or any lease, license, promissory
note, conditional sales contract, commitment, indenture, mortgage, deed of
trust, or other agreement, instrument, or arrangement to which Shareholders, or
Corporation, is a party or by which any of them or the property of any of them
is bound; (3) an event that would permit any party to terminate any agreement
or to accelerate the maturity of any indebtedness or other obligation of
Corporation; or (4) the creation or imposition of any lien, charge, or
encumbrance on any of the properties of Corporation.
K. AUTHORITY AND CONSENTS
Selling Parties have the right, power, legal capacity and authority to
enter into, and perform their respective obligations under, this agreement, and
no approvals or consents of any persons other than Selling Parties are
necessary in connection with it. The execution and delivery of this agreement
by Corporation have been duly authorized by all necessary corporate action.
L. CORPORATE DOCUMENTS
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Selling Parties have made reasonably available to Buyer for its examination
(1) copies of the articles of incorporation and bylaws of Corporation; (2) the
minute books of Corporation.
M. FULL DISCLOSURE
None of the representations and warranties made by Shareholders, or
Corporation, or made in any certificate or memorandum furnished or to be
furnished by any of them or on their behalf, contains or will contain any untrue
statement of a material fact, or omits to state any material fact necessary to
make the statements made, in the light of the circumstances under which they
were made, not misleading.
N. EXPERIENCE
Each Shareholder has, from time to time, evaluated investment in new, high
technology companies and either individually, has experience in evaluating and
investing in new, high technology companies, or will make use of a purchaser
representative who has such experience. Each Shareholder has substantial
experience in evaluating and investing in private placement transactions of
securities in companies similar to Compressent so that they are capable of
evaluating the merits and risks of its investment in Compressent, or through
other similar experience has the necessary financial knowledge and experience to
protect its own interests.
O. ACCESS TO INFORMATION
The Shareholders and its counsel, accountants, and other representatives
have had full access to all properties, books, accounts, records, contracts,
and documents of or relating to Compressent that the Shareholders would need to
inspect in order to make an informed investment decision in Compressent.
P. INVESTMENT INTENT
The Shareholders are acquiring the shares of Compressent for investment
purposes and not with an intent to resell or distribute them.
IV. ARTICLE THREE: BUYER'S REPRESENTATIONS AND WARRANTIES
Buying party represents and warrants that:
A. GOOD STANDING
Buyer is a corporation duly organized, existing, and in good standing under
the laws of the State of Florida. The Execution and delivery of this agreement
and the consummation
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of this transaction by Buyer have been duly authorized, and no further
corporate authorization is necessary on the part of a Buyer.
B. PROPER APPROVAL AND AUTHORIZATION
No consent, approval, or authorization of, or declaration, filing, or
registration with, any United States federal or state governmental or
regulatory authority is required to be made or obtained by Buyer in connection
with the execution, delivery, and performance of this agreement and the
consummation of the transactions contemplated by this agreement.
C. PROPER AUTHORITY
Buyer has the full right, power and authority to sell, transfer and
deliver to the individual Shareholders, in accordance with this Agreement, the
shares of Compressent as stated in Section II(A) of this Agreement.
D. EXPERIENCE
Buyer or its officials, from time to time, evaluated investment in new,
high technology companies and has experience in evaluating new, high technology
companies. The Buyer or its officials has substantial experience in evaluating
and investing in private placement transactions of securities in companies
similar to Softlink no that they are capable of evaluating the merits and risks
of its investment in Softlink, or through other similar experience has the
necessary financial knowledge and experience to protect its own interests.
E. ACCESS TO INFORMATION
Buyer and its counsel, accountants and other representatives have had
full access to all properties, books, accounts, records, contracts and
documents of or relating to Softlink that they the Buyer would need to inspect
in order to make an informed investment decision in Softlink.
F. ACCREDITED INVESTOR
Buyer is an "accredited investor" as defined under Regulation D of the
1933 Securities Act.
G. INVESTMENT INTENT
Buyer is acquiring the shares of Softlink for investment purposes and
not with an intent to resell or distribute them.
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V. ARTICLE FOUR: SELLING PARTIES' OBLIGATIONS BEFORE CLOSING
Selling Parties covenant that from the date of this agreement until the
closing:
A. BUYER'S ACCESS TO PREMISES AND INFORMATION
Buyer and its counsel, accountants, and other representatives shall have
full access during normal business hours to all properties, books, accounts,
records, contracts, and documents of or relating to Corporation. Selling Parties
shall furnish or cause to be furnished to Buyer and its representatives all data
and information concerning the business, finances, and properties of Corporation
that may reasonably be requested.
B. CONDUCT OF BUSINESS IN NORMAL COURSE
Corporation will carry on their respective businesses and activities
diligently and in substantially the same manner as they previously have been
carried out and shall not make or institute any unusual or novel methods of
manufacture, purchase, sale, lease, management, accounting, or operation that
vary materially from those methods used by Corporation as of the date of this
agreement.
C. PRESERVATION OF BUSINESS AND RELATIONSHIPS
Corporation will use their best efforts to preserve their respective
business organizations intact, to keep available to Corporation and Subsidiary
their present officers and employees, and to preserve their present
relationships with suppliers, customers, and others having business
relationships with them.
D. CORPORATE MATTERS
The Corporation agrees that they will not (1) amend its articles of
incorporation or bylaws; (2) issue any shares of its capital stock; (3) issue or
create any warrants, obligations, subscriptions, options, convertible
securities, or other commitments under which any additional shares of its
capital stock of any loss might be directly or indirectly authorized, issued, or
transferred from treasury; or (4) agree to do any of the acts listed above.
E. MAINTENANCE OF INSURANCE
Corporation and Subsidiary will continue to carry their existing insurance,
subject to variations in amounts required by the ordinary operations of their
businesses. At the request of Buyer and at Buyer's sole expense, the amount of
insurance against fire and other casualties that, at the date of this agreement,
Corporation and Subsidiary carry on any of their properties or in respect of
their operations shall be increased by the amount or amounts Buyer shall
specify.
F. EMPLOYEES AND COMPENSATION
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Corporation agrees they will not do, or agree to do, any of the
following acts: (1) make any change in compensation payable or to become
payable by either of them, to any officer, employee, sales agent, or
representative; (2) make any change in benefits payable to any officer,
employee, sales agent, or representative under any bonus or pension plan or
other contract or commitment; or (3) modify any collective bargaining agreement
to which either of them is a party or by which either may be bound.
G. NEW TRANSACTIONS
Corporation agrees they will not, without Buyer's consent, enter into
any contract, commitment, or transaction not in the usual and ordinary course
of its business.
H. DIVIDENDS, DISTRIBUTIONS, AND ACQUISITIONS OF STOCK
Corporation agrees that it will not:
(1) Declare, set aside, or pay any dividend or make any
distribution in respect of its capital stock;
(2) Directly or indirectly purchase, redeem or otherwise
acquire any shares of its capital stock; or
(3) Enter into any agreement obligating it to do any of the
foregoing prohibited acts.
I. PAYMENT OF LIABILITIES AND WAIVER OF CLAIMS
Corporation agrees not to do, or agree to do, any of the following
acts: (1) pay any obligation or liability, fixed or contingent, other than
current liabilities; (2) waive or compromise any right or claim; or (3) cancel,
without full payment, any note, loan, or other obligation owing to Corporation.
J. EXISTING AGREEMENTS
Corporation will not modify, amend, cancel, or terminate any of its
existing contracts or agreements, or agree to do any of those acts.
K. DOCUMENTATION OF PROCEDURES AND TRADE SECRETS
At the written request of Buyer, Corporation will document and describe
any of their trade secrets, processes, or business procedures specified by
Buyer, in form and content satisfactory to Buyer, within a reasonable time
period.
L. REPRESENTATIONS AND WARRANTIES TRUE AT CLOSING
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All representations and warranties of Selling Parties set forth in this
agreement and in any written statements delivered to Buyer by Selling Parties
under this agreement will also be true and correct as of the Closing Date as if
made on that date.
M. PATENTS, TRADEMARKS, LICENSEES, ETC.
Exhibit Three (3) lists all patents, trademarks, trademark
registrations, trade names, copyrights, know-how and trade secrets which the
Company owns or is licensed to use that are necessary for the conduct of its
business as now conducted. Except as shown on Exhibit Three (3), the Company is
not, to its knowledge, in conflict with or infringing upon any valid patents,
trademarks, trade names or copyrights of others. The Company holds or has
obtained all governmental permits, licenses, consents, approvals and waivers
necessary for the lawful conduct of its business as now conducted. Except as
set forth in Exhibit Three (3), the Company is not obligated to pay any royalty
in connection with and has not granted any licensees with respect to use of any
of said patents, trademarks, trade registrations, trade names, or copyrights.
There are no restrictions in any agreements, licenses or franchises, either
granted to or obtained by the Company, which would prevent the Company from
caring on its present business or any new business except as shown in said
Exhibit Three (3). All other intellectual property rights of the Company shall
stay with the Company after the Closing.
The Company has not granted to, or recognized in, any employee or other
person, any special right of ownership or use of any of the technology or other
rights (including within such term, without limitation, patents, trademarks,
copyrights, trade secrets, and other confidential information) used by the
Company or represented as owned by the Company.
VI. ARTICLE FIVE: BUYER'S OBLIGATIONS BEFORE CLOSING
A. INFORMATION TO BE HELD IN CONFIDENCE
Buyer agrees that, unless and until the Closing has been consummated,
Buyer and its officers, directors, and other representatives will hold in
strict confidence, and will not use to the detriment of Shareholder or
Corporation, all data and information with respect to the business of
Corporation obtained in connection with this transaction or agrement. If the
transactions contemplated by this agreement are not consummated, Buyer will
return to Selling parties all that data and information that Selling parties
may reasonably request, including, but not limited to, worksheets, test
reports, manuals, lists, memoranda, and other documents prepared by or made
available to Buyer in connection with this transaction.
VII. ARTICLE SIX: CONDITIONS PRECEDENT TO BUYER'S PERFORMANCE
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The obligations of Buyer to purchase the Shares under this agreement are
subject to the satisfaction, at or before the closing, of all the conditions set
out below in this paragraph. Buyer may waive any or all of these conditions in
whole or in part without prior notice; provided, however, that no such waiver of
a condition shall constitute a waiver by Buyer of any of its other rights or
remedies, at law or in equity, if Shareholder or Corporation shall be in default
of any of their representations, warranties, or covenants under this agreement.
A. ACCURACY OF SELLING PARTIES' REPRESENTATIONS AND WARRANTIES
Except as otherwise permitted by this agreement, all representations and
warranties by each of the Selling Parties in this agreement, or in any written
statement that shall be delivered to Buyer by any of them under this agreement
shall be true in all material respects on and as of the Closing Date as though
made at that time.
B. PERFORMANCE BY SELLING PARTIES
Selling Parties shall have performed, satisfied, and complied in all
material respects with all covenants, agreements, and conditions required by
this agreement to be performed or complied with by them, or any of them, on or
before the Closing Date.
C. NO MATERIAL ADVERSE CHANGE
During the period from November 30, 1997 to the Closing Date, there
shall not have been any material adverse change in the financial condition or
the results of operations of Corporation or Subsidiary, and neither Corporation
nor Subsidiary shall have sustained any material loss or damage to its assets,
whether or not insured, that materially affects its ability to conduct a
material part of its business.
D. CONSENTS
All necessary agreements and consents of any parties to be consummation
of the transactions contemplated by this agreement, or otherwise pertaining to
the matters covered by it, shall have been obtained by Selling Parties and
delivered to Buyer prior to closing.
E. APPROVAL OF DOCUMENTATION
The form and substance of all certificates, instruments, opinions, and
other documents, opinions, and other documents delivered to Buyer under this
agreement shall be satisfactory in all reasonable respects to Buyer and its
counsel.
VIII. ARTICLE SEVEN: CONDITIONS PRECEDENT TO SELLER'S PERFORMANCE
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The obligations of Shareholders to sell and transfer the Shares under
this agreement are subject to the satisfaction, at or before the Closing, of
all the following conditions, Shareholders may waive any or all of these
conditions in whole or in part without prior notice; provided, however, that no
such waiver of a condition shall constitute a waiver by Shareholder of any of
its other rights or remedies, at law or in equity, if Buyer should be in
default of any of its representations, warranties, or covenants under this
agreement.
A. ACCURACY OF BUYER'S REPRESENTATIONS AND WARRANTIES
All representations and warranties by Buyer contained in this agreement
or in any written statement delivered by Buyer under this agreement shall be
true on and as of the Closing Date as though such representations and warranties
were made on and as of that date.
B. BUYER'S PERFORMANCE
Buyer shall have performed and complied with all covenants and
agreements and satisfied all conditions that it is required by this agreement
to perform, comply with, or satisfy before or at the Closing.
C. ABSENCE OF LITIGATION
No action, suit, or proceeding before any court or any government body
or authority, pertaining to the transaction contemplated by this agreement or
to its consummation, shall have been instituted or threatened on or before the
Closing Date.
IX. ARTICLE EIGHT: THE CLOSING
A. TIME AND PLACE
The delivery and exchange of the Shares as referenced in Sections II
(B)and II (C) (the Closing) shall take place at the offices of Compressent
Corporation, located at 0000 Xxxxxxxx Xxx., Xxxxx 000, Xxx Xxxx, XX 00000, at
3:00 p.m. local time, on December 30, 1997, or at such other time and place as
the parties may agree to in writing (THE CLOSING DATE).
B. SELLING PARTIES' OBLIGATIONS AT CLOSING
At the Closing, Selling Parties shall deliver to Buyer the following
instruments, in form and substance satisfactory to Buyer and its counsel,
against delivery of the items specified in paragraph C(1) of Article Eight:
1. A certificate or certificates representing the Shares,
registered in the name of each Shareholder, duly endorsed by Shareholder for
transfer or accompanied by an assignment of the Shares duly executed by
Shareholder, with signatures guaranteed by a bank
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or trust company, and with all required documentary stock transfer stamps
affixed or accompanied by Shareholder's personal check for the amount of these
stamps. On submission of that certificate or certificates to Corporation for
transfer, Corporation shall issue to Buyer a certificate representing the
Shares, registered in the Buyer's name.
2. The stock books, stock ledgers, minute books, and
corporate seals of Corporation and Subsidiary.
C. BUYER'S OBLIGATIONS AT CLOSING
At the Closing, Buyer shall deliver to Shareholders the following
instruments and documents against delivery of the items specified in paragraphs
B(1) and B(2) or Article Eight.
1. A certificate or certificates representing the number
of shares of Compressent Corporation Common Stock to be issued to each
Shareholder in exchange for that Shareholder's shares of Softlink, Inc. common
stock, as specified in Article II, Paragraph B of the agreement.
X. ARTICLE NINE: SELLING PARTIES' OBLIGATIONS AFTER CLOSING
A. SELLER'S INDEMNITY
Shareholders shall indemnify, defend, and hold harmless Buyer against
and in respect of any and all claims, demands, losses, costs, expenses,
obligations, liabilities, damages, recoveries, and deficiencies, including
interest, penalties, and reasonable attorneys' fees, that it shall incur or
suffer, which arise, result from, or relate to any breach of, or failure by
Selling Parties to perform, any of their representations, warranties,
covenants, or agreements in this agreement or in any schedule, certificate,
exhibit, or other instrument furnished or to be furnished by Selling Parties
under this agreement. Shareholder's liability under this paragraph shall not,
however, exceed the aggregate amount of ____. Notwithstanding any other
provision of this agreement, Shareholders shall not be liable to Buyer on any
warranty, representation, or covenant made by Selling Parties in this
agreement, or under any of their indemnities in this agreement, regarding any
single claim, loss, expense, obligation, or other liability that does not
exceed _______ provided, however, that when the aggregate amount of all such
claims, losses, expenses, obligations, and liabilities not exceeding ________
each reaches ____________, Shareholders shall, subject to the above limitation
on their maximum aggregate liability, thereafter be liable in full for all
their breaches and indemnities and regarding all those claims, losses,
expenses, obligations, and liabilities.
XI. ARTICLE TEN: BUYER'S OBLIGATIONS AFTER CLOSING
A. BUYER'S INDEMNITY
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Buyer agrees to indemnify and hold harmless Selling Parties against, and
in respect of, any and all claims, losses, expenses, costs, obligations, and
liabilities may incur by reason of Buyer's breach of or failure to perform any
of its warranties, guaranties, commitments, or covenants in this agreement, or
by reason of any act or omission of Buyer, or any of its successors or assigns,
after the Closing Date, that constitutes a breach or default under, or a
failure to perform, any obligation, duty, or liability of any of the Selling
Parties under any loan agreement, lease, contract, order, or other agreement to
which it is a party or by which it is bound at the Closing Date, but only to
the extent to which Buyer expressly assumes these obligations, duties, and
liabilities under this agreement.
B. REGISTRATION
Buyer agrees to register one third of the shares of the Compressent stock
acquired by the Shareholders when the Buyer next registers shares of the Buyer
("Piggyback Registration"). Buyer will be responsible for the expenses of such
Piggyback Registration.
The Company covenants and agrees as follows:
(1) Definitions. For purposes of this Section B:
a. The term "register," "registered," and "registration" refer to a
registration effected by preparing and filing a registration statement or
similar document in compliance with the Act, and the declaration or
ordering of effectiveness of such registration statement or document;
b. The term "Registrable Securities" means one third of the Common
Stock of Compressent Corporation issue to each individual shareholder
pursuant to this Reorganization agreement; provided, however, that any
Registrable Securities sold by an individual shareholder in a transaction
in which his or her rights under this Section B are not assigned shall no
longer be deemed to be Registrable Securities from and after such sale;
c. The term "Holder" means any individual shareholder receiving
Registrable Securities pursuant to this Reorganization agreement; and
d. The term "Form S-3" means such form under the Act as in effect on
the date hereof or any registration form under the Act subsequently adopted
by the Securities and Exchange Commission (the "Commission") which permits
inclusion or incorporation of substantial information by reference to other
documents filed by the Company with the Commission.
e. The term "Securities with Piggyback Rights" means securities of
the Company which are entitled upon request to be included in a
registration effected by
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the Company (including a registration statement effected by the Company for
shareholders).
(2) Company Registration. If (but without any obligation to do so) the
Company proposes to register (including for this purpose a registration
effected by the Company for shareholders other than the Holders) any of its
stock or other securities under the Act in connection with the public
offering of such securities solely for cash (other than a registration
relating solely to the sale of securities to employees of the Company
pursuant to a stock option, stock purchase or similar plan, relating to a
Rule 145 transaction or a registration on any form which does not include
substantially the same information as would be required to be included in a
registration statement covering the sale of the Registrable Securities),
the Company shall, at such time, promptly give each Holder written notice
of such registration. Upon the written request of each such Holder given
within twenty (20) days after mailing of such notice by the Company in
accordance with Section 8.6 hereof, the Company shall, subject to the
provisions of Section 6.8 hereof, cause to be registered under the Act all
of the Registrable Securities that each such Holder has requested to be
registered.
(3) Expenses of Company Registration. The Company shall bear and pay
all costs of the incidental to any registration, filing or qualification of
Registrable Securities with respect to the registrations pursuant to
Section (2) for each Investor (which right may be assigned as provided in
Section 6.13), including (without limitation) all registration, filing, and
qualification fees, printers' and accounting fees relating or apportionable
thereto and the reasonable fees and disbursements of one (1) counsel for
the selling Holders and the Holders will bear and pay their prorata portion
of any underwriting discounts and commissions.
(4) Indemnification. In the event any Registrable Securities are
included in a registration statement under this Section B:
a. To the extent permitted by law, the Company will indemnify and
hold harmless each Holder, the officers, directors and partners of each Holder,
any underwriter (as defined in the Act) for such Holder and each person, if
any, who controls such Holder or underwriter within the meaning of the Act or
the Securities Exchange Act of 1934, as amended (the 1934 Act), against any
losses, claims, damages, or liabilities (joint or several) to which they may
become subject under the Act, the 1934 Act or liabilities (or actions in
respect thereof) arise out of or are based upon any of the following
statements, omissions or violations (collectively a "Violation"): (a) any
untrue statement or alleged untrue statement of a material fact contained in
such registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, (b) the
omission or alleged omission to state therein a material fact required to be
stated therein, or necessary to make the statements therein not misleading, or
(c) any violation or alleged violation by the Company of the Act, the 1934 Act,
any state securities law or any rule or regulation promulgated under the Act,
the 1934 Act or
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any state securities law; and the Company will reimburse each such Holder,
officer, director and partners of each Holder, underwriter or controlling person
for any legal or other expenses reasonably incurred by it in connection with
investigating or defending any such loss, claim, damage, liability, or action;
provided, however, that the indemnity agreement contained in this Section
6.10(1) shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the consent
of the Company (which consent shall not be unreasonably withheld); provided
further, however, that, thereforegoing indemnity agreement is subject to the
condition that, insofar as it relates to any such untrue statement, alleged
untrue statement, omission or alleged omission made in a preliminary prospectus
but eliminated or remedied in the amended prospectus on file with the Commission
at the time the registration Statement becomes effective or the amended
prospectus filed with the Commission pursuant to Rule 424(b) (the "Final
Prospectus"), such indemnity agreement shall not inure to the benefit of any
underwriter if a copy of the Final Prospectus was not furnished to the person
asserting the loss, liability, claim or damage at or prior to the time such
action is required by the Act. The Company shall not be liable under any of the
foregoing circumstances for any such loss, claim, damage, liability, or action
to the extent that it arises out of or is based upon a Violation which occurs in
reliance upon and in conformity with written information furnished expressly for
use in connection with such registration by any such Holder, underwriter or
controlling person.
(b) To the extent permitted by law, each selling Holder will indemnify and
hold harmless the Company, each of its directors, each of its officers who have
signed the registration statement, each person, if any, who controls the Company
within the meaning of the Act, any underwriter (within the meaning of the Act)
for the Company or such other Holders, any person who controls such underwriter,
and any other Holder selling securities in such registration statement or any of
its directors, officers or partners or any person who controls such Holder,
against any losses, claims, damages, or liabilities (joint or several) to which
the Company or any such director, officer, partners, controlling person, or
underwriter or controlling person, or other such Holder or director, officer or
controlling person may become subject, under the Act the 1934 Act or other
federal or state law, insofar as such losses, claims, damages, or liabilities
(or actions in respect thereto) arise out of or are based upon any Violation, in
each case to the extent (and only to the extent) that such Violation occurs in
reliance upon and in conformity with written information furnished by such
Holder expressly for use in connection with such registration; and each such
Holder will reimburse any legal or other expenses reasonably incurred by the
Company or any such director, officer, partner, controlling person, underwriter
or controlling person, other Holder, officer, director, partner, or controlling
person in connection with investigating or defending any such loss, claim,
damage, Liability, or action; provided, however, that the indemnity agreement
contained in this Section 6.10(2) shall not apply to amounts paid in settlement
is effected without the consent of Holder, which consent shall not be
unreasonably withheld.
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(c) Promptly after receipt by an indemnified party, under this Section
6.10 of notice of the commencement of any action (including any governmental
action), such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party under this Section 6.10 notify the
indemnifying party in writing of the commencement thereof and the indemnifying
party shall have the right to participate in, and, to the extent the
indemnifying party so desires, jointly with any other indemnifying party
similarly noticed, to assume the defense thereof with counsel mutually
satisfactory to the parties; provided, however, that an indemnified party shall
have the right to retain its own counsel, with the fees and expenses to be paid
by the indemnifying party, if representation of such indemnified party by the
counsel retained by the indemnifying party would be inappropriate due to actual
or potential differing interests between such indemnified party and any other
party represented by such counsel in such proceeding. The failure to notify an
indemnifying party within a reasonable time of the commencement of any such
action, if prejudicial to its ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this Section
6.10, but the omission so to notify the indemnifying party will not relieve it
of any liability that it may have to any indemnified party otherwise than under
this Section 6.10.
C. EMPLOYMENT CONTRACTS
Messrs Xxxxxxx Xxx and Xxxxxx Xxxxx will enter into employment contracts
whereby Mr. Xxxxxxx Xxx will assume the position of Vice President of Technology
- BravoMAIL product division and Xx. Xxxxxx Xxxxx will assume the position of
Vice President of Engineering - BrovoMAIL product division pursuant to the
terms outlined in the employment contracts, which are attached to this
agreement as Exhibit Four (4).
XII. ARTICLE ELEVEN: PUBLICITY
All notices to third parties and all other publicity concerning the
transactions contemplated by this agreement shall be jointly planned and
coordinated by and between Buyer and Selling Parties. No party shall act
unilaterally in this regard without the prior written approval of the others;
however, this approval shall not be unreasonably withheld.
XIII. ARTICLE TWELVE: COSTS
A. FINDER'S OR BROKER'S FEES
Each party represents and warrants that it has dealt with no broker or
finder in connection with any transaction contemplated by this agreement, and,
as far as it knows, no broker or other person is entitled to any commission or
finder's fee in connection with any of these transactions.
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B. EXPENSES
Each party shall pay all costs and expenses incurred or to be incurred
by it in negotiating and preparing this agreement and in closing and carrying
out the transactions contemplated by this agreement.
XIV. ARTICLE THIRTEEN: FORM OF AGREEMENT
A. EFFECT OF HEADINGS
The subject headings of the paragraphs and subparagraphs of this
agreement are included for convenience only and shall not affect the
construction or interpretation of any of its provisions.
B. ENTIRE AGREEMENT; MODIFICATION; WAIVER
This agreement constitutes the entire agreement between the parties
pertaining to the subject matter contained in it and supersedes all prior and
contemporaneous agreements, representations, and understandings of the parties.
No supplement, modification, or amendment of this agreement shall be binding
unless executed in writing by all the parties. No waiver of any of the
provisions of this agreement shall be deemed, or shall constitute, a waiver of
any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by the
party making the waiver.
C. COUNTERPARTS
This agreement may be executed simultaneously in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
XV. ARTICLE FOURTEEN: PARTIES
A. PARTIES IN INTEREST
Nothing in this agreement, whether express or implied, is intended to
confer any rights or remedies under or by reason of this agreement on any
persons other than the parties to it and their respective successors and
assigns, nor is anything in this agreement intended to relieve or discharge the
obligation or liability of any third persons to any party to this agreement,
nor shall any provision give any third persons any right of subrogation or
action over against any party to this agreement.
B. ASSIGNMENT
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This agreement shall be binding on, and shall inure to the benefit of, the
parties to it and their respective heirs, legal representatives, successors,
and assigns; provided, however, that Buyer may not assign any of its rights
under this agreement, except to a wholly owned subsidiary corporation of Buyer.
No such assignment by Buyer to its wholly owned subsidiary shall relieve Buyer
of any of its obligations or duties under this agreement.
XVI. ARTICLE FIFTEEN: REMEDIES
A. ARBITRATION.
Any controversy or claim arising out of, or relating to, this agreement,
or the making, performance, or interpretation of it, shall be settled by
arbitration in San Francisco, California, under the commercial arbitration
rules of the American Arbitration Association then existing, and judgment on
the arbitration award may be entered in any court have jurisdiction over the
subject matter of the controversy.
B. SPECIFIC PERFORMANCE AND WAIVER OF RESCISSION RIGHTS
Each party's obligation under this agreement is unique. If any party
should default in its obligations under this agreement, the parties each
acknowledge that it would be extremely impracticable to measure the resulting
damages; accordingly, the nondefaulting party or parties, in addition to any
other available rights or remedies, may xxx in equity for specific performance,
and the parties each expressly waive the defense that a remedy in damages will
be adequate. Notwithstanding any breach or default by any of the parties of any
of their respective representations, warranties, covenants, or agreements under
this agreement, if the purchase and sale contemplated by it shall be
consummated at the Closing, each of the parties waives any rights that it or
they may have to rescind this agreement or the transaction consummated by it;
provided, however, that this waiver shall not affect any other rights or
remedies available to the parties under this agreement or under the law.
C. RECOVERY OF LITIGATION COSTS
If any legal action or any arbitration or other proceeding is brought for
the enforcement of this agreement, or because of an alleged dispute, breach,
default, or misrepresentation in connection with any of the provisions of this
agreement, the successful or prevailing party or parties shall be entitle to
recover reasonable attorneys' fees and other cost incurred in that action or
proceeding, in addition to any other relief to which it or they may be entitled.
D. TERMINATION
1. CONDITIONS PERMITTING TERMINATION
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Subject to the provisions of Article Eight relating to the postponement of
the Closing Date, any party may on the Closing Date terminate this agreement,
without liability to any other:
(a) If any bona fide action or proceeding shall be pending against any
party on the Closing Date that could result in an unfavorable judgment, decree,
or order that would prevent or make unlawful the performance of this agreement
or if any agency of the federal or of any state government shall have objected
at or before the Closing Date to this acquisition or to any other action
required by or in connection with this agreement;
(b) If the legality and sufficiency of all steps taken and to be taken by
the parties and their shareholders in carrying out this agreement shall not
have been approved by counsel as required by this agreement.
2. DEFAULTS PERMITTING TERMINATION
If either Buyer or Selling Parties materially default in the due and
timely performance of any of its or their warranties, covenants, or agreements
under this agreement, the nondefaulting party or parties may on the Closing
Date give notice of termination of this agreement, in the manner provided in
Article Seventeen. The notice shall specify with particularity the defaults on
which the notice is based. The termination shall be effective five days after
the Closing Date, unless the specified default or defaults have been cured on
or before this effective date for termination.
XVIL. ARTICLE SIXTEEN: NATURE AND SURVIVAL OF REPRESENTATIONS AND
OBLIGATIONS
No representations or warranties whatever are made by any party, except as
specifically set forth in this agreement, or in an instrument, certificate,
opinion, or other writing provided for in this agreement. All statements
contained in any of these instruments, certificates, opinions, or other
writings shall be deemed to be representations and warranties under this
agreement. The representations, warranties, and indemnities made by the
parties in this agreement or in instruments, certificates, opinions, or other
writings provided for in the covenants and agreements to be performed or
complied with by the respective parties under it before the Closing Date, shall
be deemed to be continuing and shall survive the Closing, but shall expire on
the first anniversary date following the Closing Date, unless a specific claim
in writing with respect to these matters shall have been made, or an action at
law or in equity shall have been commenced or filed, before this anniversary
date. Nothing in this paragraph shall affect the obligations and indemnities
of the parties with respect to covenants and agreements contained in this
agreement that are permitted to be performed, in whole or in part, after the
Closing Date.
XVIII. ARTICLE SEVENTEEN: NOTICES
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All notices, requests, demands, and other communications under this
agreement shall be in writing and shall be deemed to have been duly given on the
date of service if served personally on the party to whom notice is to be given,
or on the fourth day after mailing if mailed to the party to whom notice is to
be given, by first class mail, registered or certified, postage prepaid, and
properly addressed as follows:
To Selling Parties at: 0000 X. Xx Xxxxxx Xxxx, Xxxxx #00
Xxxxxxxx Xxxx, XX 00000-0000
To Buyer at: 0000 Xxxxxxxx Xxx., Xxxxx 000
Xxx Xxxx, XX 00000
XIX. ARTICLE EIGHTEEN: GOVERNING LAW
This agreement shall be construed in accordance with, and governed by, the
laws of the State of California as applied to contracts that are executed and
performed entirely in California.
XX. ARTICLE NINETEEN: SEVERABILITY
If any provision of this agreement is held invalid or unenforceable by any
court of final jurisdiction, it is the intent of the parties that all other
provisions of this agreement be construed to remain fully valid, enforceable,
and binding on the parties.
XXI. SIGNATURES
IN WITNESS WHEREOF, the parties to this agreement have duly executed it on
the day and year first above written.
Softlink, Inc. Compressent Corporation
/s/ XXXXXXX XXX /s/ WON GOL XXXX
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Xxxxxxx Xxx, Pres. Won Gol Xxxx, CEO
12/31/97
* Registration of 450,000 shares in next S-3.
Xxxxxx & Xxxxxxx will have a market standoff until June 1, 1998 on 2/3 of
their individual shares.
/s/ E.T. XXXXXXXXX
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Xxxxxx Xxxxx, Sec. E.T. Xxxxxxxxx
C.O.B.
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