EXHIBIT 2.1
PLAN AND AGREEMENT OF REORGANIZATION
THIS PLAN AND AGREEMENT OF REORGANIZATION ("AGREEMENT"), dated
August 31, 1999, by and among Eastern Systems Technology, Inc., a California
corporation ("EASTERN"), Ram V. Mani ("MANI"), the only shareholder of
Eastern (the "SHAREHOLDER"), and NHancement Technologies Inc., a Delaware
corporation ("NHANCEMENT").
PLAN OF REORGANIZATION
The reorganization (the "REORGANIZATION") will comprise, in general,
the conveyance by Eastern to NHancement of substantially all the assets of
Eastern, the issuance by NHancement to Eastern of shares of NHancement's
authorized but unissued voting common stock (the "COMMON STOCK"), the
distribution by Eastern to the Shareholder of the shares of the Common Stock
received by Eastern and the dissolution of Eastern, all upon and subject to
the terms and conditions of the agreement hereinafter set forth. The parties
intend that the reorganization qualify as a tax-free reorganization within
the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as
amended, and Section 24562(a)(3) of the California Revenue and Taxation Code,
as amended.
AGREEMENT
In order to consummate the Reorganization, and in consideration of
the representations and undertakings herein set forth, the parties agree as
follows:
1. TRANSFER OF PROPERTIES. Upon and subject to the terms and
conditions herein stated, NHancement shall acquire at the Closing provided in
Section 8 below (the "CLOSING") from Eastern, and Eastern shall transfer,
assign, and convey at the Closing to NHancement, in exchange for shares of
the Common Stock, all of the properties and assets of Eastern, including all
rights to Intuitive Search Engine Technology commonly known as "InfoFast" and
its business as a going concern, its goodwill and the right to use its
corporate name, as more generally described on Schedule 1 attached hereto,
excepting only those assets and properties of Eastern described as excluded
on such Schedule 1 (all of the foregoing assets and properties to be
transferred being referred to collectively as the "ASSETS"). Coincident with
such transfer, assignment and conveyance, Eastern shall deliver to NHancement
possession of the Assets. All such Assets shall be transferred, assigned and
conveyed by appropriate instruments satisfactory to legal counsel for
NHancement.
Plan of Agreement and Reorganization
Page 2
2. ISSUANCE AND DELIVERY OF STOCK. In consideration of and in
exchange for the foregoing transfer, assignment and conveyance of the Assets
by Eastern, NHancement shall issue and deliver to Eastern at the Closing one
stock certificate registered in the name of Eastern for six hundred
seventy-five thousand (675,000) shares of the Common Stock (the "STOCK").
NHancement shall also issue and deliver to Eastern (or to the Shareholder if
Eastern shall have then been dissolved), one additional stock certificate for
an additional number of shares of Common Stock (the "ADDITIONAL STOCK") at
such time as an S-3 Registration Statement relating to such Additional Stock
is declared effective by the Securities and Exchange Commission (the "SEC").
The number of shares of Additional Stock to be issued by NHancement to
Eastern shall be that number equal to $400,000 divided by the closing bid
price of shares of Common Stock as quoted on NASDAQ one (1) business day
prior to the effective date of the S-3 Registration Statement. (The shares of
Stock and Additional Stock are hereinafter sometimes referred to collectively
as the "SECURITIES"). NHancement shall thereafter divide such stock
certificates into certificates of such denominations and registered in such
names as Eastern shall request, but under no circumstances shall NHancement
be obligated to issue certificates for fractions of a share. The right to
Additional Shares of the Common Stock shall not be assignable or transferable
in any manner whatsoever, other than by operation of law upon liquidation of
Eastern; provided, however, that the foregoing shall not prohibit Eastern
from selling shares of Additional Stock pursuant to the S-3 and distributing
the proceeds to third parties in satisfaction of Eastern's obligations.
3. ASSUMPTION OF LIABILITIES. NHancement shall not, by instrument
or otherwise, assume or agree to be responsible for or to perform, discharge
or indemnify Eastern or the Shareholder against any contracts, obligations or
liabilities of Eastern or the Shareholder of any type whatsoever, whether
accrued or contingent, due or not due or incurred or entered into by Eastern
or the Shareholder before or after the Closing, except for the contractual
obligations which NHancement shall expressly assume at and as of the Closing
as set forth in Schedule 3 attached hereto (the "ASSUMED CONTRACTS").
4. FORFEITURE OF STOCK. In the event of a breach by Mani or Xxxxx
Xxxxxxxxxxxx "XXXXXXXXXXXX") of the Non-Compete Agreements dated an even date
herewith between each of Mani and Ramakrishnan and NHancement (the
"NON-COMPETE AGREEMENTS"), five hundred thousand (500,000) and one hundred
seventy-five thousand (175,000) shares, respectively, if the breach occurs
within the first year of the Non-Compete Agreements, and two hundred fifty
thousand (250,000) and eighty-seven thousand five hundred shares (87,500)
shares, respectively, if the breach occurs in the second year of the
Non-Compete Agreements, of the Stock shall be immediately forfeited to
NHancement as liquidated damages for the breach, it being understood that the
Non-Compete Agreements were a material inducement to NHancement's entering
into the Reorganization. The forfeiture shall be cumulative if both
individuals referenced above breach the Non-Compete Agreements, and the
number of shares forfeited shall be based upon the year in which the breach
occurs.
5. ASSIGNMENT OF CONTRACTS. Eastern shall use its best efforts as
reasonably directed by NHancement to obtain with respect to the Assumed
Contracts the consent of the other party or parties to the assignment of such
contracts and rights to NHancement.
Plan of Agreement and Reorganization
Page 3
6. DISTRIBUTION OF SECURITIES. Eastern shall, as promptly as is
practicable after receipt thereof, wind up its business affairs and pay its
outstanding obligations to third parties and thereafter distribute the
remaining shares of the Stock and the rights to Additional Stock received by
it to the Shareholder in exchange for and in complete cancellation of their
shares of Eastern's Capital Stock.
7. DISSOLUTION OF EASTERN. Eastern shall wind up its affairs, pay
its outstanding obligations to third parties and dissolve as promptly as is
practicable after the Closing and Eastern shall not engage in any business
after the Closing without the written consent of NHancement.
8. PLACE OF CLOSING. The Closing of the transaction contemplated
by this Agreement and all deliveries hereunder shall take place at the office
of Xxxxxxxxx Xxxxx Morosoli & Maser LLP, 200 Page Mill Road, Second Floor,
Palo Alto, California 94306 (or at such other place as may be mutually agreed
upon) at the time of Closing set forth in Section 9 below.
9. TIME OF CLOSING. The time of Closing shall be 1:00 p.m.,
Pacific Time (or such other time as may be mutually agreed upon) on August
31, 1999 (or such other time and date as may be mutually agreed upon).
10. REPRESENTATIONS AND WARRANTIES OF EASTERN AND SHAREHOLDER.
Eastern and the Shareholder, jointly and severally, hereby represent and
warrant to NHancement that all of the statements made below in this Section
10 are true and correct in all respects. These representations and warranties
are subject to the exceptions set forth on Schedule 10 (the "SCHEDULE OF
EXCEPTIONS") furnished to NHancement, specifically identifying the relevant
Section hereof, which exceptions shall be deemed to be representations and
warranties as if made hereunder. The phrase "to the best knowledge of
Eastern" shall, when included in a representation or warranty made by a
Shareholder, mean to the best knowledge of such Shareholder.
10.1 ORGANIZATION AND STANDING. Eastern is a corporation duly
organized, validly existing and in good standing under the laws of the State
of California and has full power and authority to carry on its business as
now conducted and as proposed to be conducted. Eastern is not required to be
qualified as a foreign corporation in any jurisdiction; provided, however,
that Eastern need not be qualified in any jurisdiction in which a failure to
qualify would not have a material and adverse effect on its operations or
financial condition.
10.2 CAPITALIZATION. The authorized capital stock of Eastern
consists of Fourteen Million (14,000,000) shares of Common Stock, all of
Eastern's issued and outstanding shares are owned beneficially and of record
by the Shareholder.
10.3 SUBSIDIARIES. Eastern has no subsidiaries or affiliated
companies and does not otherwise own or control, directly or indirectly, any
equity interest in any corporation, association, joint venture, partnership
or other business entity.
Plan of Agreement and Reorganization
Page 4
10.4 CORPORATE AUTHORITY AND AUTHORIZATION. Eastern has the
corporate right and authority to assign, convey and transfer the Assets to
NHancement. All corporate action on the part of Eastern, its officers,
directors and Shareholder necessary for the authorization, execution,
delivery and performance of this Agreement by Eastern and the performance of
all of Eastern's obligations hereunder has been taken. This Agreement
constitutes a valid and binding obligation of Eastern and the Shareholder,
enforceable against Eastern and the Shareholder in accordance with its terms,
except as the indemnification provisions of Section 14.7 hereof may be
limited by principles of public policy and subject to laws of general
application relating to bankruptcy, insolvency and the relief of debtors and
rules of law governing specific performance, injunctive relief or other
equitable remedies.
10.5 GOVERNMENTAL CONSENT. No consent, approval or
authorization of or designation, declaration or filing with any governmental
authority on the part of Eastern is required in connection with the valid
execution and delivery of this Agreement, or the consummation of any other
transaction contemplated hereby.
10.6 INTELLECTUAL PROPERTY.
10.6.1 Eastern possesses and has good, valid and
marketable title, free and clear of all security interests, liens, claims,
charges, encumbrances or any other defects in title of any nature whatsoever
to, or has the valid, enforceable right to use (pursuant to written
agreements, true and correct copies of which are listed on Schedule 10.6 and
have been submitted to NHancement), all trademarks, trademark rights, trade
names, trade name rights, licenses, franchises, service marks, patents,
patent applications, copyrights, inventions, discoveries, improvements,
processes, trade secrets, confidential or proprietary information, formulae,
proprietary rights or data, shop rights, algorithms, technical data, ideas or
know-how (collectively the "INTELLECTUAL PROPERTY") necessary to conduct its
business as now being conducted or as proposed to be conducted, without
conflict with or infringement upon any valid rights of others and the lack of
which could adversely affect the operations or condition, financial or
otherwise, of Eastern. Eastern (i) owns or has the right to use (and to make,
use, sell, license and lease products incorporating or manufactured using),
free and clear of all liens, claims and restrictions, all Intellectual
Property used in the conduct of its business as now conducted or as proposed
to be conducted without infringing upon or otherwise acting adversely to the
right or claimed right of any person under or with respect to any of the
foregoing, and (ii) is not obligated or under any liability whatsoever to
make any payments by way of royalties, fees or otherwise to any owner of,
licensor of or other claimant to any patent, trademark, service xxxx, trade
name, copyright, license or other right with respect to the use thereof in
connection with the conduct of its business or otherwise. Eastern owns and
has the unrestricted right to use all Intellectual Property required for or
incident to the development, manufacture, operation and sale of all products
and services sold or proposed to be sold by Eastern, free and clear of any
rights, liens or claims of others, including, without limitation, former
employers of all employees of Eastern. All of the foregoing rights to
Intellectual Property are freely transferable to NHancement hereunder without
the consent or approval of any third party and following such assignment and
transfer NHancement will possess and enjoy all of such rights to Intellectual
Property as Eastern did immediately prior to such transfer and assignment.
Plan of Agreement and Reorganization
Page 5
10.6.2 Set forth in Schedule 10.6 is a complete listing
of all software related in any fashion or manner whatsoever to the software
program commonly referred to as "InfoFast" (the "SOFTWARE") and its ownership
to which Eastern or either Shareholder had proprietary rights, whether sole
or shared, as of the Closing, describing therein any such sharing. All copies
of the Software were, as of the Closing, in Eastern's possession and control,
except for certain object code copies which then were in the possession of
customers of Eastern. All such customers have entered into license agreements
with Eastern that, to the best knowledge of Eastern, effectively protect
Eastern's rights in and to all such Software. For purposes of this Section,
the term "SOFTWARE" includes any set of instructions (including, without
limitation, arithmetic, logical, data transfer, data manipulation and
input/output) meant to run on, or to control the operation of, any computer,
whether those instructions are a complete program, a collection of programs
making up a subsystem or system or are merely subroutines or macroroutines
meant to operate in conjunction with other software, and whether such
instructions must be run through another computer program (commonly
referenced as a "compiler") before being usable on a computer, whether such
instructions must be used at execution time in conjunction with another
computer program (commonly referenced as an "interpreter") or whether such
instructions are in a form that can be run on a computer "as is" without
additional programs.
10.6.3 The Software will not, due to a date change: (i)
have any operational impediments, (ii) malfunction, (iii) cease to perform,
(iv) generate incorrect or ambiguous data or results with respect to
same-century and multi-century, Leap Year and other calendar formulas,
functions and data or (v) produce incorrect or ambiguous results with respect
to same-century and multi-century, Leap Year and other calendar formulas,
functions, date values and date data interfaces. The Software is free from
any computer "viruses", and other elicit code. The Software performs in all
material respects in accordance with its specifications.
10.7 MANUFACTURING RIGHTS. Eastern has not granted rights to
manufacture or assemble its products to any other person or entity.
10.8 OFFICERS, DIRECTORS AND EMPLOYEES.
10.8.1 To the best knowledge of Eastern, no present or
former officer, director or employee of Eastern is a party to or is otherwise
bound by any agreement or arrangement (including any agreement of
noncompetition) that in any way adversely affects his or her performance of
his or her duties as an officer, director or employee of Eastern or Eastern's
ability to conduct its business. Eastern has established appropriate policies
and procedures to ensure no officer, director or other employee of Eastern
misuses confidential information or trade secrets of others in the course of
their employment or other relationship with Eastern. Eastern is not a party
to any labor agreements, employment contracts, consulting agreements or any
other instruments which limit the rights of Eastern to terminate the
employment or other relationship with a particular individual at will.
Eastern is not aware that any officer, director or key employee, or that any
group of officers, directors or key employees, would not continue their
employment with NHancement on the same terms as previously employed by
Eastern.
Plan of Agreement and Reorganization
Page 6
10.8.2 Eastern: (i) is not bound by or subject to any
collective bargaining agreement with respect to any of its employees nor has
any labor union requested or, to the best knowledge of Eastern, sought to
represent any of the employees, representatives or agents of Eastern, (ii)
does not have any current labor problems or disputes, pending or threatened,
(iii) does not have in effect any "employee pension benefit plans" (as
defined in Section 3(2) of the Employee Retirement Income Security Act of
1974) or employee benefit or similar plans qualified under Section 401 of the
Internal Revenue Code of 1986, as amended, and (iv) does not maintain, has
not in the past maintained and is not and has not been a contributor to any
multi-employer plan or single employer plan, as defined in Section 4001 of
the Employee Retirement Income Security Act of 1974, as amended, for the
employees of Eastern or any trade or business (whether or not incorporated)
which, together with Eastern, would be deemed to be a "single employer"
within the meaning of such Section 4001. Eastern has complied in all material
respects with all laws relating to the employment of labor, including
provisions relating to wages, hours, equal opportunity, collective bargaining
and payment of Social Security and other taxes.
10.9 CERTAIN TRANSACTIONS. Eastern is not indebted, directly
or indirectly, to any of its officers, directors or Shareholder, or to their
respective affiliates, spouses or children, in any amount whatsoever, except
for salaries and fees accrued in the ordinary course of business; none of
said officers, directors or, to the best knowledge of Eastern, Shareholder,
or any of their affiliates or members of their immediate families, are
indebted to Eastern or have any direct or indirect ownership interest in any
firm or corporation with which Eastern is affiliated or with which Eastern
has a business relationship, or any firm or corporation which competes with
Eastern (except with respect to any interest in less than five percent (5%)
of the stock of any corporation whose stock is publicly traded). No officer,
director or shareholder, or any affiliate or member of their immediate
families, is, directly or indirectly, interested in any material contract
with Eastern.
10.10 COMPLIANCE WITH OTHER INSTRUMENTS, NONE BURDENSOME, ETC.
Eastern is not in violation of any term of its Articles of Incorporation or
Bylaws, as amended and in effect on and as of the Closing. Eastern is not in
violation in any respect of any term or provision of any mortgage,
indebtedness, indenture, contract, agreement, instrument, judgment or decree,
order, statute, rule or regulation applicable to it where such violation
would adversely affect Eastern, its operations or financial condition. The
execution, delivery and performance of and compliance with this Agreement
have not resulted and will not result in any violation of or conflict with,
or constitute a material default under, any mortgage, indebtedness,
indenture, contract, agreement, instrument, judgment or decree, order,
statute, rule or regulation applicable to it, or result in the creation of
any mortgage, pledge, lien, encumbrance or charge upon any of the properties
or assets of Eastern; and there is no such term or provision which adversely
affects Eastern, its operations or financial condition as presently conducted
or as contemplated to be conducted. Eastern and, to the best knowledge of
Eastern, its officers, directors and key employees, are not parties to any
mortgage, indebtedness, indenture, contract, agreement, instrument, judgment,
decree or order restricting its ability to enter or compete in any line of
business or market.
Plan of Agreement and Reorganization
Page 7
10.11 MATERIAL CONTRACTS AND OBLIGATIONS.
10.11.1 Included in the Schedule 10.11 is a list of
all agreements, contracts and other obligations to which Eastern is a party or
by which it is bound that are material to the operation of its business and
properties, which: (i) provide for aggregate payments to or by Eastern in excess
of Ten Thousand Dollars ($10,000), (ii) obligate Eastern to share, license or
develop any product or technology, (iii) appoint distributors, dealers or
sublicensees of Eastern's products, which agreements cannot be terminated on
thirty (30) days' notice or less or (iv) involve transactions or proposed
transactions between Eastern and its officers, directors, affiliates or any
affiliate thereof. Copies of such agreements and contracts and documentation
evidencing such other obligations have been delivered to NHancement. All of such
agreements and contracts are valid, binding and in full force and effect in all
material respects, assuming due execution by the other parties to such
agreements and contracts. There is no pending or threatened dispute or
disagreement, and there have been no events which may give rise to any dispute
or disagreement, between Eastern and any of the clients or customers of Eastern,
or any other person having a business relationship with Eastern, which dispute
or disagreement, if resolved unfavorably to Eastern, would have a materially
adverse effect on Eastern's operations or financial condition. No client or
customer of Eastern, or any other person having a business relationship with
Eastern, has indicated that it presently contemplates terminating its business
relationship with Eastern.
10.11.2 All open orders, licenses and contracts for
Eastern's products and services can be fulfilled by Eastern within its
current capacity, in accordance with the terms thereof, and the fulfillment
thereof will not result in material losses or material warranty or other
liabilities to NHancement.
10.12 HAZARDOUS WASTE DISPOSAL. To the best knowledge of
Eastern, after reasonable investigation, Eastern has materially complied with
all laws regulating the discharge and disposal of hazardous waste, the
violation of which would have a material, adverse effect on the operations or
financial condition of Eastern, including, but not limited to:
10.12.1 Comprehensive Environmental Response,
Compensation and Liability Act, 42 USC Sections 9601, et seq.;
10.12.2 Resource Conservation and Recovery Act, 42 USC
Sections 6901, et seq.;
10.12.3 Toxic Substances Control Act, 15 USC Sections
2601, et seq.;
10.12.4 California Hazardous Substances Information and
Training Act, California Labor Code Sections 6360, et seq.;
10.12.5 California Hazardous Waste Act, California
Health & Safety Code Sections 25100, et seq.;
Plan of Agreement and Reorganization
Page 8
10.12.6 California Hazardous Substances Act, California
Health & Safety Code Sections 28740, et seq.; and
10.12.7 California Safe Drinking Water and Toxic
Enforcement Act of 1986, California Health & Safety Code Sections 25249.5, et
seq.
10.13 LICENSES AND PERMITS. Included in the Schedule 10.13 is
a complete and accurate list of all of the licenses, permits, authorizations
and franchises issued to, possessed by, used by or otherwise in effect with
respect to the business of Eastern. Eastern has delivered to NHancement
complete and accurate copies of all of the licenses, permits, authorizations
and franchises identified in said Schedule. All of the licenses, permits,
authorizations and franchises identified are valid and in full force and
effect. Said licenses, permits, authorizations and franchises constitute all
of the licenses, permits, authorizations and franchises required to permit
Eastern to conduct its business in the manner in which it is now being
conducted, and Eastern is not in violation or breach of any of the terms,
requirements or conditions of any of said licenses, permits, authorizations
or franchises.
10.14 LITIGATION, ETC. There are no actions, suits,
proceedings or investigations pending against Eastern or, to the best
knowledge of Eastern, any of its officers, directors or employees or its
properties, before any court or governmental agency (nor, to the best
knowledge of Eastern, is there any reasonable basis therefor or threat
thereof), which, either in any case or in the aggregate, might result in any
material adverse change in the business or financial condition of Eastern, or
in any material impairment of the right or ability of Eastern to carry on its
business as now conducted or as proposed to be conducted or in any material
liability on the part of Eastern, or any change in the current equity
ownership of Eastern, and none which questions the validity of this Agreement
or any action taken or to be taken in connection herewith. The foregoing
includes, without limiting its generality, actions pending or threatened (or
any basis therefor known to Eastern) involving the prior employment of any of
Eastern's employees, their use in connection with Eastern's business of any
information or techniques allegedly proprietary to any of their former
employers or their obligations under any agreements with prior employers.
10.15 CRIMINAL INVESTIGATIONS AND ACTIVITIES. Eastern, its
past and present officers and directors and the Shareholder: (i) have never
been convicted of a felony, (ii) have not been named as a defendant in a
pending criminal proceeding involving a felony, and (iii) are not now or ever
have been the subject of any governmental decree or order prohibiting it or
any of them from engaging in certain business activities. There is no pending
criminal investigation of any nature whatsoever into the activities of
Eastern, its officers, directors and Shareholder. Eastern has fully complied
with the provisions of the United States Export Administration Act and all
rules and regulations promulgated thereunder.
10.16 MATERIAL LIABILITIES. Eastern has no liabilities which
are, individually or in the aggregate, material to the financial condition or
operating results of Eastern which have not been disclosed on Schedule 10.16.
Plan of Agreement and Reorganization
Page 9
10.17 TAXES. Eastern has prepared and filed all federal,
state and local income, withholding, sales, real property, personal property
and other tax returns that are required to be filed by it and has paid or
made provision for the payment of all taxes that have become due pursuant to
such returns. None of such returns has been audited by any state or federal
agency. No deficiency assessment or proposed adjustment of Eastern's federal,
state and or local taxes is pending, and Eastern has no knowledge of any
proposed liability for any tax to be imposed upon Eastern for which there is
not an adequate reserve reflected in Eastern's Financial Statements.
10.18 TITLE. Eastern has good and marketable title to the
Assets. Such Assets are not subject to any material liens, mortgages,
pledges, encumbrances or charges of any kind.
10.19 DISCLOSURE. Eastern has fully provided NHancement with
all of the information which NHancement has requested for deciding whether to
enter into the Reorganization hereunder and all information reasonably
necessary to enable NHancement to make such decision. This Agreement, the
Financial Statements, and any written statement or certificate furnished to
NHancement pursuant to this Agreement in connection with the transactions
contemplated by this Agreement, when taken together, do not contain any
untrue statement of a material fact nor omit to state a material fact
necessary to make the statements made not misleading.
11. REPRESENTATIONS AND WARRANTIES OF NHANCEMENT. NHancement
represents and warrants to Eastern that:
11.1 CORPORATE STATUS. NHancement is a corporation duly
organized and existing under the laws of Delaware, with an authorized, issued
and outstanding capital stock as set forth in the 1934 Act documents in
defined Section 11.4 below.
11.2 CORPORATE AUTHORITY AND AUTHORIZATION. NHancement has
the corporate right and authority to issue and deliver the securities
required to be issued hereunder to Eastern; and such shares when delivered at
or after the Closing will be fully paid and nonassessable. All corporate
action on the part of NHancement, its officers, directors and Shareholder
necessary for the authorization, execution, delivery and performance of this
Agreement by NHancement and the performance of all of NHancement's
obligations hereunder has been taken. This Agreement constitutes a valid and
binding obligation of NHancement, and enforceable against NHancement in
accordance with its terms, except of the indemnification provisions of
Section 14.7 hereof may be limited by principals of public policy and subject
to laws of general application relating to bankruptcy, insolvency and the
relief of debtors and rules of law governing specific performance, injunctive
relief or other equitable remedies.
11.3 GOVERNMENTAL CONSENT. No consent, approval or
authorization or designation, declaration or filing with any governmental
authority on the part of NHancement is required in connection with the valid
execution and delivery of this Agreement, or of the consummation of any other
transaction contemplated hereby except as specifically referenced in the
Agreement.
Plan of Agreement and Reorganization
Page 10
11.4 1934 ACT DOCUMENTS. NHancement has delivered to Eastern
and the Shareholder a copy of its Form 10K for the fiscal year ending
September 30, 1998 and its Form 10Q for the quarter ending June 30, 1999 (the
"1934 ACT DOCUMENTS") filed with the SEC by NHancement pursuant to the
Securities Exchange Act of 1934 (the "1934 ACT"). None of the 1934 Documents,
when taken together, contain any untrue statement of the material fact or
omit to state a material fact necessary to make the statements made not
misleading.
12. SURVIVAL OF REPRESENTATIONS, WARRANTIES; INDEMNITY. The
respective representations and warranties given by NHancement, Eastern and
the Shareholder contained herein shall remain effective against their
respective successors, heirs and assigns and shall survive the Closing.
NHancement shall indemnify and hold Eastern and the Shareholder harmless from
any damage, claim, liability or expense, including reasonable attorneys'
fees, arising out of the breach of any representation or warranty or the
nonfulfillment of any agreement contained herein, or in any certificate to be
delivered at the Closing, by NHancement. Eastern and the Shareholder shall,
jointly and severally, indemnify and hold NHancement harmless from any
damage, claim, liability or expense, including reasonable attorneys' fees,
arising out of the breach of any representation or warranty or the
nonfulfillment of any agreement contained herein, or in any certificate to be
delivered at the Closing, by Eastern or the Shareholder.
13. SECURITIES LAWS MATTERS. Because of the exemptions from the
registration requirements of the Securities Act of 1933 (the "ACT") and from the
qualification requirements of the California Corporate Securities Law of 1968
(the "LAW") relied upon by NHancement in issuing the Securities under Section 2,
Eastern and the Shareholder represent and warrant that they:
13.1 Are aware that such Securities are highly speculative and
that there can be no assurance as to what return, if any, there may be.
13.2 Are aware of NHancement's business affairs and financial
condition and have acquired sufficient information about NHancement to reach
an informed and knowledgeable decision to acquire such Securities.
13.3 Are each acquiring such Securities for investment FOR
ITS, HIS OR HER OWN ACCOUNT ONLY and not with a view to, or for sale in
connection with, any "distribution" thereof within the meaning of the Act or
the Law (except that shares of Additional Stock may be resold pursuant to and
on the effectiveness of the S-3 Registration Statement referred to in Section
14 below (the "S-3").
13.4 Except for shares of Additional Stock registered under
the S-3, understand that such Securities have not been registered under the
Act or qualified under the Law by reason of specific exemptions therefrom,
which exemptions depend upon, among other things, the bona fide nature of
Eastern's and the Shareholder' investment intent as expressed herein. In this
connection, Eastern and the Shareholder understand that, in the view of the
SEC, the statutory basis for one exemption from the Act may not be present if
their representations mean that their present intentions are to hold such
shares for a minimum capital gains period under the tax statutes, for a
deferred sale,
Plan of Agreement and Reorganization
Page 11
for a market rise, for a sale if the market does not rise, or for a year or
any other fixed period in the future.
13.5 Except for shares of Additional Stock registered under
the S-3, further understand that such Securities must be held indefinitely
unless subsequently registered under the Act and qualified under the Law or
an exemption from such registration and such qualification is available, and
that, except as set forth in Section 14 below, NHancement is under no
obligation to effect such registration or qualification or to assure the
availability of any such exemption.
13.6 Are aware of Rule 144 promulgated under the Act which
permits limited public resale of the Securities if it is acquired in a
non-public offering subject to the satisfaction of certain conditions,
including, among other things: the availability of certain public information
about the NHancement, the resale occurring not less than one (1) year after
he or she purchased and completed payment for the Securities to be sold, the
sale being made on the public market through a broker in an unsolicited
"broker's transaction" or to a "market maker" and the amount of the
Securities sold during any three-month period not exceeding specified
limitations (generally, one percent (1%) of all Common Stock outstanding);
except that such conditions need not be met by a person who is not an
affiliate of the NHancement at the time of sale and has not been an affiliate
for the preceding three (3) months, if the Securities to be sold have been
beneficially owned by such person for at least three (3) years prior to their
sale. The Common Stock may not be publicly traded or NHancement may not be
satisfying the current public information requirements of Rule 144 at the
time Eastern or a Shareholder wishes to sell the Securities; and thus, they
may be precluded from selling the Securities under Rule 144 even though the
minimum holding period may have been satisfied.
13.7 Further understand that in the event the requirements of
Rule 144 are not met, registration under the Act, compliance with Regulation
A or some other registration exemption will be required for any disposition
of the Securities; and that, although Rule 144 is not exclusive, the
Commission has expressed its opinion that persons proposing to sell private
placement Securities other than in a registered offering and other than
pursuant to Rule 144 will have a substantial burden of proof in establishing
that an exemption from registration is available for such offers or sales and
that such persons and the brokers who participate in such transactions do so
at their own risk.
13.8 Except for shares of Additional Stock registered under
the S-3, understand that the certificates evidencing the Securities will be
imprinted with legends in substantially the following form:
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE HAVE BEEN
ACQUIRED FOR INVESTMENT FOR THE NHANCEMENT'S OWN ACCOUNT AND NOT WITH A
VIEW TO, OR FOR RESALE IN CONNECTION WITH, ANY DISTRIBUTION THEREOF. NO
SALE OR OTHER DISPOSITION OF SUCH SHARES MAY BE EFFECTED WITHOUT THE
(1) REGISTRATION OF SUCH SALE OR DISPOSITION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), AND
Plan of Agreement and Reorganization
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(2) QUALIFICATION OF SUCH SALE OR DISPOSITION UNDER THE CALIFORNIA
CORPORATE SECURITIES LAW OF 1968, AS AMENDED, OR WITHOUT AN OPINION
OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER THAT
SUCH REGISTRATION AND QUALIFICATION ARE NOT REQUIRED."
"THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE ARE FURTHER
SUBJECT TO A RISK OF FORFEITURE IN ACCORDANCE WITH SECTION 4 OF THE
PLAN AND AGREEMENT OF REORGANIZATION DATED AUGUST 31, 1999 BY AND AMONG
EASTERN SYSTEMS TECHNOLOGY, INC. AND THE ISSUER (A COPY OF WHICH IS
AVAILABLE FROM THE ISSUER)."
14. RESTRICTIONS ON TRANSFERABILITY OF SECURITIES; REGISTRATION
RIGHTS; COMPLIANCE WITH SECURITIES ACT.
14.1 RESTRICTIONS ON TRANSFERABILITY. The Securities shall
not be sold, assigned, transferred or pledged except upon the conditions
specified in this Section 14.
14.2 CERTAIN DEFINITIONS. As used in this Section 14, the
following terms shall have the following respective meanings:
14.2.1 "REGISTRABLE SECURITIES" shall mean the shares of
Additional Stock and any Common Stock of NHancement issued as a dividend or
other distribution with respect to or in exchange for replacement of any
shares of Additional Stock.
14.2.2 The terms "REGISTER," "REGISTERED" and
"REGISTRATION" shall refer to a registration effected by preparing and filing
an S-3 Registration Statement in compliance with the Act, and the declaration
or ordering of the effectiveness of such registration statement. Such terms
shall also include an undertaking to file all required pre and post-effective
amendments to such registration statement and the preparation, filing and
declaration or ordering of the effectiveness of appropriate applications for
the qualification or registration of securities pursuant to applicable blue
sky or other state securities laws and appropriate compliance with applicable
regulations issued under the Act and any other governmental requirements or
regulations necessary to permit the lawful offer and sale of Registrable
Securities in the United States of America.
14.2.3 "REGISTRATION EXPENSES" shall mean all expenses
incurred by Eastern in complying with Section 14.3, including, without
limitation, all registration, qualification and filing fees, printing
expenses, fees and disbursements of counsel for NHancement.
14.2.4 "SELLING EXPENSES" shall mean all underwriting
discounts and selling commissions applicable to the sale of Registrable
Securities.
Plan of Agreement and Reorganization
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14.2.5 "HOLDER" shall mean any Shareholder so long as
such Shareholder holds outstanding Registrable Securities.
14.3 REGISTRATION ON FORM S-3.
14.3.1 NHancement shall use its best efforts to qualify
for registration on Form S-3 (or successor forms); and, to that end,
NHancement shall comply with the reporting requirements of the 1934 Act.
NHancement will use its best efforts to effect promptly the registration of
all shares of Registrable Securities on Form S-3 (or successor form) as soon
as practicable but in no event later than six (6) months following the
Closing.
14.4 EXPENSES OF REGISTRATION. All Registration Expenses
incurred in connection with any registration, qualification or compliance
pursuant to Section 14.3 shall be borne by NHancement. All Selling Expenses
related to securities registered by the Holders shall be borne by the Holders.
14.5 REGISTRATION PROCEDURES. In the case of the registration
effected by NHancement pursuant to this Section14, NHancement will keep each
Holder advised in writing as to the initiation of such registration,
qualification and compliance and as to the completion thereof. At its expense
NHancement shall:
14.5.1 Keep such registration effective for a period of
ninety (90) days, or until the Holder or Holders have completed the
distribution described in the registration statement relating thereto,
whichever shall occur first; and
14.5.2 Furnish such number of prospectuses and other
documents incident thereto as a Holder from time to time may reasonably
request.
14.6 DELAY OF REGISTRATION. No Holder shall have any right to
take any action to restrain, enjoin or otherwise delay any registration as
the result of any controversy that might arise with respect to the
interpretation or implementation of this Section 14.
14.7 INDEMNIFICATION. In the event any Registrable Securities
shall be included in a registration statement pursuant to this Section 14:
14.7.1 To the extent permitted by law, NHancement will
indemnify and hold harmless each Holder requesting or joining in a
registration and each person, if any, who controls such Holder within the
meaning of the Act against any losses, claims, damages or liabilities, joint
or several, to which they may become subject under the Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based on any untrue or alleged untrue statement
of any material fact contained in such registration statement, including any
preliminary prospectus or final prospectus contained therein or any
amendments or supplements thereto, or arise out of or are based upon 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
arise
Plan of Agreement and Reorganization
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out of any violation by NHancement of any rule or regulation promulgated
under the Act or any other applicable law, rule or regulation applicable to
NHancement and relating to action or inaction required of NHancement in
connection with any such registration; and will reimburse each such Holder or
controlling person for any legal or other expenses reasonably incurred by
them in connection with investigating or defending any such loss, claim,
damage, liability or action; provided, however, that the indemnity agreement
contained in this Section 14.7.2 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 NHancement (which consent shall
not be unreasonably withheld) nor shall NHancement be liable in any such case
for any such loss, claim, damage, liability or action to the extent that it
arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission made in connection with such
registration statement, preliminary prospectus, final prospectus or
amendments or supplements thereto, in reliance upon and in conformity with
information furnished expressly for use in connection with such registration
by any such Holder or controlling person seeking the indemnification.
14.7.2 To the extent permitted by law, each Holder
requesting or joining in the registration will indemnify and hold harmless
NHancement, each of its directors, each of its officers who have signed the
registration statement and each person, if any, who controls NHancement
within the meaning of the Act and each other such Holder against any losses,
claims, damages or liabilities to which NHancement or any such director,
officer, controlling person or other Holder may become subject, under the Act
or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereto) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final
prospectus contained therein or any amendments or supplements thereto, or
arise out of or are based upon 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, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in such registration statement,
preliminary or final prospectus or amendments or supplements thereto, in
reliance upon and in conformity with 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 NHancement
or any such director, officer, controlling person or other Holder in
connection with investigating or defending such loss, claim, damage,
liability or action; provided, however, that the indemnity agreement
contained in this Section 14.7.3 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 such Holder (which consent
shall not be unreasonably withheld), and provided, further, that the
liability of each Holder to reimburse legal or other expenses pursuant to
this Section shall, in each case, be limited to the total dollar amount
received by such Holder for the securities sold pursuant to such registration
by that Holder.
14.7.3 Promptly after receipt by an indemnified party
under this Section 14.7 of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made against
any indemnifying party under this Section, notify the indemnifying party in
writing of the commencement thereof and the indemnifying party shall have the
right to
Plan of Agreement and Reorganization
Page 15
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. The failure to
notify an indemnifying party promptly of the commencement of any such action,
if materially prejudicial to such indemnifying party's ability to defend such
action, shall relieve such indemnifying party of any liability to the
indemnified party under this Section, but the omission to so notify the
indemnifying party will not relieve such indemnifying party of any liability
that such indemnifying party may have to any indemnified party otherwise than
under this Section.
14.8 REPORTS UNDER THE 1934 ACT. With a view to making
available to the Holders the benefits of certain rules and regulations
promulgated by the SEC that may permit the Holders to sell shares of
NHancement's stock to the public without registration, NHancement agrees to:
14.8.1 Make and keep adequate current public information
available, as those terms are understood and defined in Rule 144, at all
times subsequent to the Closing; and
14.8.2 Furnish to any Holder forthwith upon request, so
long as such Holder shall own any Registrable Securities, a written statement
by NHancement that it has complied with the reporting requirements of Rule
144, and of the Act and the 1934 Act, a copy of the most recent annual or
quarterly report of NHancement, and such other reports and documents so filed
by NHancement as may be reasonably requested in availing the Holder of any
rule or regulation promulgated by the Commission that allows the selling of
any such securities without registration.
14.9 LOCKUP AGREEMENT. In consideration for NHancement's
agreeing to its obligations under this Agreement, Eastern and the Shareholder
agree not to sell, make any short sale of, loan, grant any option for the
purchase of or otherwise dispose of (i) any shares of the Stock for a one (1)
year period following the Closing and (ii) one-half (1/2) of such shares of
the Stock for an additional one (1) year period following the first
anniversary date of the Closing. All subsequent transferees or assignees of
the shares of Stock must agree in writing to the provisions set forth in this
Section 14.9 a precondition to any such transfer or assignment.
14.10 ASSIGNMENT OF REGISTRATION RIGHTS. The rights hereby
granted to the Holders to cause NHancement to register securities under
Section 14.3 above may not be assigned, in whole or in part, to any
transferee or assignee of Registrable Securities.
15. EXPENSES. Except as provided to the contrary herein, each
party shall pay all of its own costs and expenses incurred with respect to
the negotiation, execution and delivery of this Agreement.
16. SEVERABILITY. If any provision of this Agreement, or the
application thereof, shall for any reason and to any extent be invalid or
unenforceable, the remainder of this Agreement and application of such
provision to other persons or circumstances shall be interpreted so as best
to reasonably effect the intent of the parties hereto. The parties further
agree to replace such void or
Plan of Agreement and Reorganization
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unenforceable provision of this Agreement with a valid and enforceable
provision which will achieve, to the extent possible, the economic, business
and other purposes of the void or unenforceable provision.
17. ENTIRE AGREEMENT. This Agreement, the exhibits hereto, the
documents referenced herein, and the exhibits thereto, constitute the entire
understanding and agreement of the parties hereto with respect to the subject
matter hereof and thereof and supersede all prior and contemporaneous
agreements or understandings, inducements or conditions, express or implied,
written or oral, between the parties with respect hereto and thereto. The
express terms hereof control and supersede any course of performance or usage
of the trade inconsistent with any of the terms hereof.
18. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original as against any party whose
signature appears thereon and all of which together shall constitute one and
the same instrument. This Agreement shall become binding when one or more
counterparts hereof, individually or taken together, shall bear the
signatures of all of the parties reflected hereon as signatories.
19. FINDER'S FEES. The parties hereto each represent to every
other party that such party neither is, nor will be, obligated for any
finder's or broker's fee or commission in connection with the transactions
contemplated herein. Each party agrees to indemnify and to hold harmless all
other parties from any liability for any commission or compensation in the
nature of a finder's or broker's fee (and the costs and expenses of defending
against such liability or asserted liability) for which such indemnifying
party, its employees, agents or representatives is responsible.
20. OTHER REMEDIES. Any and all remedies herein expressly
conferred upon a party shall be deemed cumulative with and not exclusive of
any other remedy conferred hereby or by law on such party, and the exercise
of any one remedy shall not preclude the exercise of any other.
21. AMENDMENT AND WAIVERS. Any term or provision of this Agreement
may be amended, and the observance of any term of this Agreement may be
waived (either generally or in a particular instance and either retroactively
or prospectively) only by a writing signed by the party to be bound thereby.
The waiver by a party of any breach hereof for default in payment of any
amount due hereunder or default in the performance hereof shall not be deemed
to constitute a waiver of any other default or succeeding breach or default.
22. SURVIVAL OF AGREEMENTS. All covenants, agreements,
representations and warranties made herein shall survive the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby.
23. NO WAIVER. The failure of any party to enforce any of the
provisions hereof shall not be construed to be a waiver of the right of such
party thereafter to enforce such provisions.
Plan of Agreement and Reorganization
Page 17
24. ATTORNEYS' FEES. Should suit be brought to enforce or
interpret any part of this Agreement, the prevailing party shall be entitled
to recover, as an element of the costs of suit and not as damages, reasonable
attorneys' fees to be fixed by the court (including without limitation,
costs, expenses and fees on any appeal).
25. NOTICES. Whenever any party hereto desires or is required to
give any notice, demand, or request with respect to this Agreement, each such
communication shall be in writing and shall be effective only if it is
delivered by personal service or mailed, United States certified mail,
postage prepaid, addressed as follows:
If to Eastern: Eastern Systems Technology, Inc.
00000 Xxxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
If to Shareholder: Ram V. Mani
00000 Xxxxxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
If to Eastern or Mani Xxxxxxx Xxxxx, Esq.
with a copy to: 0000 Xx Xxxxxx Xxxx, Xxxxx 000
Xxxx Xxxx, Xxxxxxxxxx 00000
If to NHancement: NHancement Technologies Inc.
00000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxx 00000
If to NHancement Xxxxxxx X. Xxxxx, Esq.
with a copy to: Xxxxxxxxx Xxxxx Morosoli & Maser LLP
000 Xxxx Xxxx Xxxx, Xxxxxx Xxxxx
Xxxx Xxxx, Xxxxxxxxxx 00000
Such communications shall be effective when they are received by the
addressee thereof; but if sent by certified mail in the manner set forth
above, they shall be effective five (5) days after being deposited in the
United States mail. Any party may change its address for such communications
by giving notice thereof to the other party in conformity with this Section.
26. TIME. Time is of the essence of this Agreement.
27. CONSTRUCTION OF AGREEMENT. This Agreement has been negotiated
by the respective parties hereto and their attorneys and the language hereof
shall not be construed for or against any party. A reference in this
Agreement to any Section shall include a reference to every Section the
number of which begins with the number of the Sections to which reference is
specifically made (e.g., a reference to Section 5.8 shall include a reference
to Sections 5.8.1 and 5.8.2.1). The titles
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and headings herein are for reference purposes only and shall not in any
manner limit the construction of this Agreement which shall be considered as
a whole.
28. NO JOINT VENTURE. Nothing contained in this Agreement shall be
deemed or construed as creating a joint venture or partnership between any of
the parties hereto. No party is by virtue of this Agreement authorized as an
agent, employee or legal representative of any other party. No party shall
have the power to control the activities and operations of any other and
their status is, and at all times, will continue to be, that of independent
contractors with respect to each other. No party shall have any power or
authority to bind or commit any other. No party shall hold itself out as
having any authority or relationship in contravention of this Section.
29. FURTHER ASSURANCES. Each party agrees to cooperate fully with
the other parties and to execute such further instruments, documents and
agreements and to give such further written assurances, as may be reasonably
requested by any other party, to better evidence and reflect the transactions
described herein and contemplated hereby, and to carry into effect the
intents and purposes of this Agreement.
30. ABSENCE OF THIRD PARTY BENEFICIARY RIGHTS. No provisions of
this Agreement are intended nor shall be interpreted to provide or create any
third party beneficiary rights or any other rights of any kind in any client,
customer, affiliate, shareholder, or partner of any party hereto or any other
person; unless specifically provided otherwise herein, and, except as so
provided, all provisions hereof shall be personal solely between the parties
to this Agreement.
31. EXECUTION OF DOCUMENTS. At any time and from time to time
after the Closing, Eastern will execute and deliver to NHancement such
further conveyances, assignments and other written assurances as NHancement
shall reasonably request in order to vest and confirm in NHancement title to
the Assets.
32. PARTIES IN INTEREST. Nothing herein expressed or implied is
intended or shall be construed to confer upon or to give any person, firm or
corporation other than the parties hereto any rights or remedies under or by
reason hereof.
33. BINDING UPON SUCCESSORS AND ASSIGNS. Subject to, and unless
otherwise provided in, this Agreement, each and all of the covenants, terms,
provisions, and agreements contained herein shall be binding upon, and inure
to the benefit of, the permitted successors, executors, heirs,
representatives, administrators and assigns of the parties hereto.
34. GOVERNING LAW. It is the intention of the parties hereto that
the internal laws of the State of California, U.S.A. (irrespective of its
choice of law principles) shall govern the validity of this Agreement, the
construction of its terms, and the interpretation and enforcement of the
rights and duties of the parties hereto.
35. COMPLETENESS OF AGREEMENT. This Agreement and the other
agreements entered into among the parties on even date herewith contain the
entire understanding between the parties
Plan of Agreement and Reorganization
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hereto with respect to the transactions contemplated hereby and there are no
prior or contemporaneous agreements other than are in writing signed by the
parties which alter or modify this written instrument. It is intended by the
parties that this Agreement supercede all oral or contemporaneous agreements
other than those signed by the parties mentioned above. This Agreement
constitutes the final, complete and exclusive embodiment of the parties'
agreement.
36. NEGOTIATED AGREEMENT. This Agreement has been negotiated by
the parties hereto and their respective legal counsel, and the language
hereof shall not be construed for or against any such party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
NHANCEMENT: EASTERN:
NHANCEMENT TECHNOLOGIES INC.
EASTERN SYSTEMS TECHNOLOGY, INC.
By: /s/ Xxxxxxx X. Xxxx
-------------------------------
Xxxxxxx X. Xxxx,
President and Chief Executive By: /s/ Ram V. Mani
Officer -------------------------------
Ram V. Mani,
President and Chief Executive
Officer
SHAREHOLDER:
/s/ Ram V. Mani
------------------------------------
Ram V. Mani
Plan of Agreement and Reorganization
Page 20
SCHEDULE 1
ASSETS
All rights to Intuitive Search Engine Technology commonly known as
"InfoFast" and Eastern's business as a going concern, its goodwill and the
right to use its corporate name.
Such Assets include, without limitation, all trademarks, trademark
rights, trade names, trade name rights, licenses, franchises, service marks,
patents, patent applications, copyrights, inventions, discoveries,
improvements, processes, trade secrets, confidential or proprietary
information, formulae, proprietary rights or data, shop rights, algorithms,
technical data, ideas or know-how (collectively the "INTELLECTUAL PROPERTY")
necessary to conduct its business as now being conducted or as proposed to be
conducted, without conflict with or infringement upon any valid rights of
others and the lack of which could adversely affect the operations or
condition, financial or otherwise, of Eastern. For purposes of this Schedule
1, the term "INFOFAST" includes any set of instructions (including, without
limitation, arithmetic, logical, data transfer, data manipulation and
input/output) meant to run on, or to control the operation of, any computer,
whether those instructions are a complete program, a collection of programs
making up a subsystem or system or are merely subroutines or macroroutines
meant to operate in conjunction with other software, and whether such
instructions must be run through another computer program (commonly
referenced as a "compiler") before being usable on a computer, whether such
instructions must be used at execution time in conjunction with another
computer program (commonly referenced as an "interpreter") or whether such
instructions are in a form that can be run on a computer "as is" without
additional programs.
Plan of Agreement and Reorganization
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SCHEDULE 3
ASSUMED CONTRACTS
1. ACQUISITION AGREEMENT dated effective as of August 31, 1999, by and among
Eastern Systems, Technology, Inc., a California corporation, Ram V. Mani
having his principal address at 00000 Xxxxxxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, Front-End Technologies, (Madras) Pvt. Ltd., a private
limited company incorporated under the laws of the Republic of India, and
Xxxxx Xxxxxxxxxxxx having his principal address at 0000 Xxxxxxxxx
Xxxxxxxxx, Xxx. 000, Xxxxxxx, Xxxxxxxxxx 00000.
2. NON-COMPETE AND TECHNOLOGY TRANSFER AGREEMENT dated August 31, 1999, by
and among Eastern Systems, Technology, Inc., a California corporation,
Front-End Technologies, (Madras) Pvt. Ltd., a private limited company
incorporated under the laws of the Republic of India, and Xxxxx
Xxxxxxxxxxxx having his principal address at 0000 Xxxxxxxxx Xxxxxxxxx,
Xxx. 000, Xxxxxxx, Xxxxxxxxxx 00000
Plan of Agreement and Reorganization
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SCHEDULE 10.6.1
WRITTEN AGREEMENTS
1. ACQUISITION AGREEMENT dated effective as of August 31, 1999, by and among
Eastern Systems, Technology, Inc., a California corporation, Ram V. Mani
having his principal address at 00000 Xxxxxxxxx Xxxxxx, Xxx Xxxxx,
Xxxxxxxxxx 00000, Front-End Technologies, (Madras) Pvt. Ltd., a private
limited company incorporated under the laws of the Republic of India, and
Xxxxx Xxxxxxxxxxxx having his principal address at 0000 Xxxxxxxxx
Xxxxxxxxx, Xxx. 000, Xxxxxxx, Xxxxxxxxxx 00000.
Plan of Agreement and Reorganization
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SCHEDULE 10.6.2
ADDITIONAL SOFTWARE RELATED TO INFOFAST
None
Plan of Agreement and Reorganization
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SCHEDULE 10.13
LICENSES AND PERMITS
AUTHORIZATIONS AND FRANCHISES
None
Plan of Agreement and Reorganization
Page 25
SCHEDULE 10.16
MATERIAL LIABILITIES
None
