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Exhibit 2.4
PURCHASE AGREEMENT
THIS IS A PURCHASE AGREEMENT ("Agreement") dated November 13, 1998 (the
"Closing Date") by and between ZAI*NET Software, L.P., a Delaware Limited
Partnership ("Buyer"), and Xxxxxx Xxx, an individual, doing business as Positron
Energy Consulting ("Seller").
RECITALS
A. Seller carries on the business of designing and selling software
for the analysis, measurement and management of investment and
trading-related financial risk(s) for energy firms and providing
related consulting services (the "Business").
B. Seller desires to sell to Buyer and Buyer desires to purchase from
Seller, as of the Closing Date, the Business and the Contract
Assets (as defined in Section 1.1). To accomplish such
transaction, Seller is delivering to Buyer a xxxx of sale and
instrument of assignment with respect to the Contract Assets and
Buyer is delivering to Seller an instrument of assumption with
respect to the Assumed Liabilities.
C. As additional consideration for the Contract Assets, Caminus
Energy Ventures LLC, a Delaware limited liability company and
general partner in the Buyer ("Caminus") is issuing to Seller a
membership interest in Caminus pursuant to and subject to the
Contingent Purchase Price Agreement attached as Appendix C hereto
("Contingent Purchase Price Agreement").
D. In addition, Seller and Buyer are entering into an employment
agreement (the "Employment Agreement") and covenant not to compete
as of the Closing Date.
NOW, THEREFORE, in consideration of the mutual promises hereinafter set
forth and other good and valuable consideration had and received, and upon the
terms and subject to the conditions contained herein, the parties agrees as
follows (capitalized terms used herein that are not otherwise defined shall have
the meaning set forth in Appendix A hereto):
ARTICLE I
PURCHASE AND SALE OF ASSETS
1.1 Assets to Be Acquired. Upon the terms and subject to the
conditions contained herein, Seller shall sell, assign and transfer to Buyer,
and Buyer shall purchase and acquire from Seller, on the Closing Date, the
following properties and assets of Seller used or held for use in the Business
as of the Closing Date (collectively, the "Contract Assets"), free and clear of
any Liens (except for the Assumed Liabilities):
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1.1.1 all furniture and fixtures, all computers, all equipment,
all machinery and all office or administrative supplies which are used in the
Business including the items listed or described on Exhibit 1;
1.1.2 all rights and incidents of interest of Seller in and to
all Contracts relating to the Business or the ownership of the Contract Assets;
1.1.3 all right, title and interest in the software described on
Appendix B hereto (the "Software");
1.1.4 all Intellectual Property used in the conduct of the
Business or otherwise constituting a part of the technology usable in or related
to the Business;
1.1.5 all customer lists, manuals, books, files, records,
engineering data, procedures, systems, computer programs, models, ratios,
instructions, patterns, drawings, plans, designs specifications, parts lists,
descriptions, data, art work, advertising material and dealer and distributor
lists which are used in or relate to the Business;
1.1.6 the business and goodwill as a going concern of the
Business; and
1.1.7 all other properties, assets, rights and interests of every
kind and description, wherever located, of Seller, which are used or held for
use in connection with the Business.
1.2 Excluded Assets. Notwithstanding anything contained in Section 1.1
to the contrary, Seller shall not sell, assign or transfer to Buyer, and Buyer
shall neither purchase nor acquire from Seller, any of the following
(collectively, the "Excluded Assets"):
1.2.1 any cash, certificates of deposit or other cash equivalent
items attributable to the operations of the Business prior to the Closing Date;
1.2.2 all accounts receivable arising in connection with the
Business prior to the Closing Date; and
1.2.3 the Office Lease.
ARTICLE II
CONSIDERATION
2.1 Cash Payment. As partial consideration for the transfer of the
Contract Assets by Seller to Buyer, Buyer shall pay to Seller on the Closing
Date the sum of One Hundred Fifty-One Thousand Six Hundred Sixty-Seven Dollars
($151,667.00).
2.2 Additional Contingent Payments to Seller. As additional
consideration for the transfer of the Contract Assets, Buyer will make payments
to Seller (subject to the terms and conditions herein) as follows:
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2.2.1 Payments Related to 1998 Western Resources and PacifiCorp
Licenses. Buyer shall assign to Seller the right to receive all fees paid by
Western Resources or PacifiCorp for licenses of the Software (or its functional
successor) purchased on or before January 31, 1999 that are billed by Seller on
or before July 31, 1999. Buyer and Seller agree that amounts owing to Seller
under this Section 2.2.1 shall be paid directly by Western Resources or
PacifiCorp to Seller.
2.2.2 Payments Related to PacifiCorp and Vitol Gas and Electric.
Buyer shall pay to Seller twenty percent of all fees invoiced by Buyer to
PacifiCorp and Vitol Gas and Electric ("Vitol") prior to October 3, 1999 for
licenses of Buyer's software; provided, however, the maximum amount that Seller
shall be entitled to receive pursuant to the preceding clause shall be equal to
$100,000 with respect to fees invoiced to Vitol and $100,000 with respect to
fees invoiced to PacifiCorp; provided, further, following the Closing Date, if
Seller is not employed by Buyer on the date that any such amount is invoiced to
PacifiCorp or Vitol, Seller shall not be entitled to the payment provided in
this Section unless the reason Seller is not employed by Buyer on such date is
because Seller was terminated by Buyer without Cause or Seller terminated his
employment with Buyer for Good Reason.
2.3 Contingent Purchase Price Agreement. As additional consideration
for the purchase of the Contract Assets, Caminus is issuing to the Seller a
membership interest in Caminus, as set forth in, and subject to, the Contingent
Purchase Price Agreement.
2.4 Assumption of Contracts. As further consideration for the Contract
Assets, Buyer shall assume all liabilities and obligations of Seller under the
Contracts listed on Exhibit 2 (the "Assigned Contracts"), except for Liabilities
arising from Seller's breach before the Closing of any such Assigned Contract;
provided, however, Buyer shall not assume any obligations pursuant to such
Contracts to the extent that the unreimbursed Buyer's Adjusted Costs of
compliance with such Contracts attributable to Liabilities related to the two
year period following the Closing Date exceed $100,000 (all of the liabilities
assumed pursuant to this Section 2.4 shall be referred to as the "Assumed
Liabilities"). In addition, Buyer's Adjusted Costs of compliance shall not
include costs associated with any extensions of the maintenance or warranty
period beyond the applicable period set forth in the Assigned Contracts as of
the Closing Date which are agreed to by Buyer.
2.5 Excluded Liabilities. Notwithstanding anything to the contrary in
this Agreement, Buyer shall not assume or be liable with respect to any
Liability of Seller, its employees or agents other than the Assumed Liabilities
(collectively, all of the Liabilities not assumed by Buyer shall be referred to
as the "Excluded Liabilities"). All of the Excluded Liabilities shall remain the
sole responsibility of Seller.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Buyer as follows:
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3.1 Authority for Agreements. This Agreement has been duly executed
and delivered by Seller, and constitutes the binding and enforceable obligation
of Seller in accordance with its terms.
3.2 No Violation to Result. The execution and delivery of this
Agreement and the performance of the transactions contemplated hereunder are not
in violation or breach of, do not conflict with or constitute a default under,
and will not accelerate or permit the acceleration of the performance required
by, any Contract to which Seller is a party or by which the Seller or any of the
Contract Assets is bound, or under any Law, applicable to Seller or to any of
the Contract Assets, and will not result in the creation or imposition of any
Lien upon any of the Contract Assets, and will not be an event which, after
notice or lapse of time or both, will result in any of the foregoing.
3.3 Title to Assets. Seller has good and marketable title to the
Contract Assets, free and clear of all Liens. The Contract Assets are in the
sole possession and under the sole control of Seller.
3.4 Intellectual Property. Exhibit 3 contains an accurate and complete
list of all Intellectual Property (including the Software) used by Seller in the
conduct of the Business. Except as noted on Exhibit 3, Seller owns all such
Intellectual Property, and has the right to use, sell, license or dispose of all
such Intellectual Property, free and clear of any Liens (other than the Assumed
Liabilities). Except as noted on Exhibit 3, Seller has not entered into any
license agreement with respect to such Intellectual Property. Except as noted on
Exhibit 3, Seller is not required to pay any royalty, license fee or similar
compensation in connection with the Software or the conduct of the Business. The
Software and the operations of the Business as now conducted do not infringe,
and no other party has asserted that the Software or such operations do
infringe, the patents, patent applications, copyrights, trademarks, trade
secrets or other intellectual property rights of anyone. The use of any such
Intellectual Property in the conduct of the Business does not violate any
license agreement between Seller and any third party.
3.5 Brokers. Seller has not expressly or impliedly engaged any broker,
finder or agent with respect to any transaction contemplated by this Agreement.
3.6 Dedicated Assets. Except for the Excluded Assets, the Contract
Assets constitute all the property, tangible and intangible, used or held for
use in the Business, so as to permit the conduct of the Business by Buyer
immediately after the Closing Date in substantially the same manner and
substantially to the same extent that the Business was being conducted as of the
Closing Date.
3.7 Contracts. Exhibit 4 correctly lists or describes each Contract to
which Seller is a party or is bound in any respect relating to the Contract
Assets or the Business. Each of the Contracts listed or described on Exhibit 4
is in full force and effect, is a legal and binding obligation enforceable by or
against Seller, and, to the best knowledge of Seller, the other parties thereto.
As of the Closing Date, the Seller has performed all obligations required
pursuant to each of such Contracts to have been performed by it. No event has
occurred which constitutes or, with the giving of notice or passage of time or
both, would constitute a default by any party thereunder. Seller has made
available to Buyer correct and
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complete copies of each Contracts listed on Exhibit 4 including all
modifications or amendments thereto.
3.8 No Litigation. There is no Lawsuit or Claim pending or, to
Seller's knowledge, threatened against Seller relating to or affecting the
Business or involving any property or asset included in the Contract Assets.
3.9 Compliance with Laws. To the Knowledge of Seller, Seller has
complied in all respects with all Laws imposed by any Governmental Authority
applicable to the Business or the Contract Assets.
3.10 Accuracy of Statements. Exhibit 5 contains a true and correct
schedule of the receipts and expenditures of the Business for 1997 and the
period January 1, 1998, through October 31, 1998, as well as a schedule of
accounts receivable and accounts payable as of October 31, 1998, which
accurately reflects the results and operations of the Business prior to the
Closing Date. Neither this Agreement nor any information to be furnished by or
on behalf of Seller to Buyer in connection with this Agreement will contain any
untrue statement of a material fact regarding any of the Seller, the Contract
Assets or the Business or omits or will omit to state a material fact necessary
to make the statements regarding any of the Seller, the Contract Assets or the
Business contained herein or therein, in light of the circumstances in which
they are made, not misleading.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer hereby represents and warrants to Seller as follows:
4.1 Organization. The Buyer is a limited partnership duly organized,
validly existing and in good standing under the laws of the State of Delaware,
having full power and authority to own its properties and to carry on its
business as conducted.
4.2 Authority. The Buyer has the requisite power and authority to
deliver this Agreement, and perform its obligations herein, and consummate the
transactions contemplated hereby. The Buyer has duly executed and delivered this
Agreement and has obtained the necessary authorization to execute and deliver
this Agreement and to perform its obligations herein and consummate the
transactions contemplated hereby. This Agreement is a valid, legal and binding
obligation of the Buyer enforceable against the Buyer in accordance with its
terms, except to the extent that enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject to general principles of equity (regardless of
whether such enforcement is considered in a proceeding at law or at equity).
ARTICLE V
INDEMNIFICATION
5.1 Indemnification. From and after the Closing Date, but subject to
the conditions and limitations set forth in this Agreement, Seller shall defend,
indemnify and
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save the Buyer and the other Buyer Indemnified Parties harmless from and against
any and all Losses whatsoever resulting from or arising out of (i) any breach of
any representation or warranty of Seller contained herein, (ii) any breach of
any covenant or other obligation of Seller contained herein, (iii) any Excluded
Liability, or (iv) any claim by any Governmental Authority that Caminus or Buyer
should have withheld taxes with respect to any amounts payable to Seller
pursuant to this Agreement or pursuant to the Contingent Purchase Price
Agreement; provided, however, Seller shall not be required to indemnify the
Buyer Indemnified Parties with respect to matters set forth in clause (i) of
this Section 5.1 until the aggregate of such amounts exceeds $20,000, and then
shall be required to indemnify the Buyer Indemnified Parties with respect to all
such amounts (including the first $20,000). Any amounts owed by Seller under
this Section may, at the election of the Buyer Indemnified Parties, be satisfied
by reducing or offsetting any amounts or obligations owed to Seller by any Buyer
Indemnified Party (including, without limitation, Buyer, or Caminus) under this
Agreement, the Contingent Purchase Price Agreement or otherwise.
5.2 Claims. If a Buyer Indemnified Party ("Claimant") desires to make
a claim against the Seller (the "Indemnitor") under this Agreement, the Claimant
shall give prompt written notice to the Indemnitor of the institution of any
Lawsuit or Claim at any time instituted against or made upon Claimant in
connection with which the Claimant could claim indemnification and shall advise
the Indemnitor in writing, to the extent known, of the amount and circumstances
surrounding the same and shall permit the Indemnitor, at its option, to
participate in the defense of such Lawsuit or Claim by counsel of its own choice
and at its expense. No such Lawsuit or Claim, except the settlement thereof
which involves (i) the payment of money only either by a party or parties other
than the Claimant and (ii) the unconditional release from all related liability
of the Claimant, may be settled by the Indemnitor without the written consent of
the Claimant. The foregoing notwithstanding, the failure of any Claimant to give
any notice required to be given hereunder shall not affect such Claimant's right
to indemnification hereunder except to the extent the Indemnitor from whom such
indemnity is sought shall have been actually and materially prejudiced in its
ability to defend the claim or action for which such action is sought by reason
of such failure. Payment by a Claimant to a third Person with respect to a Loss
shall not affect such Claimant's rights to indemnification pursuant to this
Agreement.
5.3 Treatment of Obligations to Provide Support, Maintenance or Other
Services to Customers. If, after the Closing Date, support, maintenance or other
service obligations are owed by either Buyer or Seller to customers of Buyer or
Seller, and Buyer is entitled to indemnification with respect to such
obligations (whether such obligations constitute Excluded Liabilities as defined
in Section 2.5 or result from breaches of representations and warranties), Buyer
shall, at its election, be entitled to satisfy such obligations in the manner it
deems appropriate, and Seller shall be required to indemnify Buyer financially
with respect to the satisfaction of such obligations.
5.4 Representations and Warranties Survive. The representations and
warranties of the parties to this Agreement shall survive the Closing Date.
ARTICLE VI
GENERAL PROVISION
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6.1 Notices. All notices, requests, consents and other communications
hereunder shall be in writing (including facsimile or telex) and shall be
effective upon receipt, in each case addressed:
If to Seller to:
Xxxxxx Xxxx Xxx
000 Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000-0000
Fax No.: (000) 000-0000
Attention: Xxxxxx Xxx
If to Buyer to:
ZAI*NET Software, L.P.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: President
With a copy to:
Caminus Energy Ventures LLC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: CEO
provided, however, that if any party shall have designated a different address
by notice to the other, then to the last address so designated.
6.2 Assignment. This Agreement and the rights and duties hereunder
shall be binding upon and inure to the benefit of the successors and assigns of
each of the parties hereto, but shall not be assignable or delegable by any
party without the prior written consent of the other, except that Buyer may
assign all of its rights and obligations hereunder to any Affiliate of Buyer
(including Caminus).
6.3 Arbitration. Buyer and Seller agree that any and all legal
disputes, controversies or claims arising out of or relating to this Agreement
shall be resolved by binding arbitration at the local Los Angeles County,
California offices of the Judicial Arbitration & Mediation Services, Inc.
("J.A.M.S."). The parties may agree on a jurist from the J.A.M.S. panel. If they
are unable to agree, J.A.M.S. will provide a list of three available panel
members and each party may strike one. The remaining panel member will serve as
the arbitrator. The aggrieved party may initiate arbitration by: (i) sending
thirty (30) days written notice of an intention to arbitrate by registered or
certified mail to all parties and to J.A.M.S.; and (ii) depositing with J.A.M.S.
the advanced fees required by J.A.M.S. to initiate the arbitration process for
the parties. The notice must contain a description of the
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dispute, the amount involved and the remedies sought. Upon notice of demand for
arbitration, the parties agree to execute a submission agreement, provided by
J.A.M.S., which agreement shall provide for discovery in accordance with the
Federal Rules of Civil Procedure and for the Commercial Arbitration rules and
procedures established by the American Arbitration Association. The prevailing
party in any such arbitration proceeding shall be entitled to recover from the
other party reasonable attorneys' fees, costs and expenses in connection with
such arbitration proceeding.
6.4 Waivers. Any waiver by Seller or Buyer of any breach of or failure
to comply with any provision of this Agreement by the other party shall be in
writing and shall not be construed as, or constitute, a continuing waiver of
such provision, or a waiver of any other breach of, or failure to comply with,
any other provision of this Agreement.
6.5 Complete Agreement. Except for the confidentiality agreement dated
August 11, 1998, between the parties, the Contingent Purchase Price Agreement,
the Employment Agreement and the Covenant Not To Compete, and except as set
forth in any instrument signed by the party to be bound thereby which makes
reference to this Agreement, this Agreement and the documents in the form of the
Exhibits hereto set forth the entire understanding of the parties hereto and
supersede all prior agreements, covenants, arrangements, communications,
representations or warranties, whether oral or written, by any party (or any
officer, employee or representative of any party).
6.6 Governing Law. This Agreement shall be construed and enforced in
accordance with and governed by the internal substantive laws of the Xxxxx xx
Xxxxxxxxxx xxx xx xxx Xxxxxx Xxxxxx of America.
6.7 Third Parties. Nothing herein is intended or shall be construed to
confer upon or give to any person other than the parties hereto, any rights or
remedies under or by reason of this Agreement.
6.8 Amendment. This Agreement may not be amended orally but only by an
instrument in writing duly executed by the parties.
6.9 Headings. The headings of the Articles and Sections of this
Agreement and in the Exhibits to this Agreement are inserted for convenience of
reference only and shall not be deemed to constitute a part hereof or thereof.
6.10 Exhibits. The Exhibits attached hereto and referred to in this
Agreement are a part of this Agreement for all purposes.
6.11 Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together constitute one and the same
instrument, and any of the parties hereto may execute this Agreement by signing
any such counterpart.
6.12 Severability. If any provision of this Agreement is declared
invalid or unenforceable by a court of competent jurisdiction, the validity or
enforceability of any other provision of this Agreement shall not be affected.
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6.13 Expenses, Taxes, Etc. Each party will pay all fees and expenses
incurred by it in connection with this Agreement and the transactions
contemplated hereby; provided, however, that all documentary, stamp and excise
taxes and all transfer, filing, recordation and similar taxes and fees and all
sales and use taxes and related taxes, if any, incurred in connection with this
Agreement and the transactions contemplated hereby will be borne by Seller.
6.14 Further Assurance. After the Closing, Seller shall from time to
time, at Buyer's request and without further cost and expense to Buyer, execute
and deliver to Buyer such other instruments of conveyance and transfer
(including, without limitation, additional assignments suitable for filing or
recording with respect to Intellectual Property) and take such other action as
Buyer may reasonably request so as more effectively to sell, assign and transfer
to Buyer title to and possession of the Contract Assets as provided in this
Agreement or otherwise to consummate the transactions contemplated by this
Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
by their duly authorized officers as of the day and year first above written.
XXXXXX XXX ZAI*NET SOFTWARE, L.P.
By: Caminus Energy Ventures LLC, its
General Partner
By: /s/ Xxxxxx Xxx By: /s/ Xxxxxxx Xxxxxxx
---------------------------------- ----------------------------------
Name: Name: Xxxxxxx Xxxxxxx
Title: Title: Member, Management Committee
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APPENDIX A
CERTAIN DEFINITIONS
"AFFILIATE" means, with respect to any party, another party that
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such party.
"BUYER INDEMNIFIED PARTIES" means Buyer and Caminus and their respective
subsidiaries and Affiliates, any assignee or successor thereof, and each
officer, director and employee of each of the foregoing.
"BUYER'S ADJUSTED COSTS" associated with any activity shall mean 160% of
the wages payable to Buyer's employees performing the activity with respect to
the time spent performing the activity, plus any direct expenses incurred.
"CAUSE" shall have the meaning set forth in the Employment Agreement.
"CONTRACT" means any note, debt instrument, license, commitment,
contract, agreement, lease, commitment, license, sales and purchase orders,
agreements or any other instrument, whether written or oral.
"GOOD REASON" shall have the meaning set forth in the Employment
Agreement.
"GOVERNMENTAL AUTHORITY" means any federal, national, state, municipal,
local or other government, governmental authority, regulatory or administrative
agency, governmental commission, department, board, bureau, agency or
instrumentality, political subdivision, court, tribunal, official arbitrator or
arbitral body, in each case whether domestic or foreign.
"INTELLECTUAL PROPERTY" means any patents, inventions (whether or not
patentable), trademarks and associated goodwill, trade names, service marks,
trade secrets (including algorithms and formulas), know-how, service marks,
logos, copyrights, rights of publicity, and registrations and applications for
each of the foregoing, and computer software programs (including the Software),
computer databases and related documentation and materials.
"KNOWLEDGE" means actual knowledge after reasonable investigation and due
inquiry.
"LAW" means any law, judgment, decree, rule or regulation of any
Governmental Authority or court, whether federal, state, local or otherwise.
"LAWSUIT OR CLAIM" means any claim, lawsuit, demand, suit, hearing,
governmental investigation, notice of a violation, litigation, proceeding,
arbitration, or other dispute, whether civil, criminal, administrative or
otherwise.
"LIABILITY" means any liability or obligation, known or unknown, fixed,
contingent or otherwise.
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"LIEN" means any security interest, lien, charge, mortgage, deed,
assignment, pledge, encumbrance or restriction in favor of any third person
(whether or not perfected) of any kind or nature.
"LOSSES" means losses, damages, claims, diminutions in value, costs and
expenses, interest, awards, judgments and penalties (including reasonable legal
fees and costs) suffered or incurred.
"OFFICE LEASE" shall mean the office lease between Seller and Xxxx X.
Xxxxxxxxx, dated as of July 1, 1998.
"ORDER" means any order, writ, rule, judgment, injunction, decree,
stipulation, determination or award entered by or with any Governmental
Authority.
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XXXXXXXX X
DESCRIPTION OF SOFTWARE
The Positron software includes the following modules and tools:
Value at Risk Module:
Full Simulation Based Model Using HJM Methodology to Simulate Forward Curves.
Captures Forward Curve Correlation Relationships
Captures Cross Location Risks
Captures Cross Commodity Risks
Captures full option risk.
Nucleus Integration:
Captures full set of open positions from Nucleus.
Explicitly imports Power Options, Exchange Options & OTC options for fine
grained risk management.
Automatically uploads curves & volatilities as stored in Nucleus
Understands Nucleus book structure and allows risks to be broken down both by
individual book and across books.
Option Pricing Tools:
Asians
Americans
Baskets
Binaries
Compounds
Forward Start Options
Spreads
Swaptions
Rainbows
Option Pricing Support Functions:
Low discrepancy sequences
Bivariate and inverse normal
Cholesky decomposition
Numerical search algorithms
Correlated deviates
Flexible deal portfolios:
The ability to group deals by trader, region, counterparty or custom criteria on
the fly.
Inclusion/exclusion of deals and advanced what-if scenarios.
Powerful grouping and viewing of a company's traded books to get a clear
understanding of risks across the company.
Complete MTM values and detailed sensitivities such as delta, gamma, xxxx, eta,
and rho are reported.
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Rate Server Engine:
Tools to manage and build price curves including bootstrapping, interpolation
algorithms, intra-day and intra-month pricing, peak/off-peak rates, settlement
formulas and curve objects to intelligently manage and control price
information.
The Positron Rate Server can be called from Excel or a variety of other high end
tools to get settlements, formulas, or real time price information and provides
an excellent enterprise wide way to manage price quotes throughout your
business.
Financial position reporting:
Report net delta, gamma, xxxx and rho positions either summarized by portfolio
or broken out by deal.
Show exchange traded hedge strips and backwardated roll graph of positions.
Perform P&L breakdown to show gains and losses from previous day and how they
can be attributed to individual risk categories.
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APPENDIX C
CONTINGENT PURCHASE PRICE AGREEMENT
THIS CONTINGENT PURCHASE PRICE AGREEMENT (the "Agreement"), dated as of
November ____, 1998, by and among ZAI*NET Software, L.P., a Delaware Limited
Partnership ("ZAI*NET"), Caminus Energy Ventures LLC, a Delaware limited
liability company (the "Company"), and Xxxxxx Xxx ("Investor"). Capitalized
terms used herein and not otherwise defined shall have the meaning set forth in
Section 10 hereof, or if not defined therein, the respective meanings in the LLC
Agreement (as defined below).
WHEREAS, the Investor has entered into a Purchase Agreement
(the "Purchase Agreement") dated as of the date hereof with ZAI*NET, an
Affiliate of the Company, pursuant to which ZAI*NET is purchasing the Investor's
business (the "Purchase");
WHEREAS, as additional consideration for the Purchase, the
Company will issue to Investor membership interests in the Company as set forth
opposite Investor's name on Schedule I hereto (the "Membership Interest")
subject to the satisfaction of certain conditions;
WHEREAS, upon the issuance of the Membership Interest, the
Investor will become a Member of the Company and subject to the rights,
privileges and obligations under this Agreement and the Limited Liability
Agreement of the Company, originally dated as of May 12, 1998, including the
Appendices thereto (the "LLC Agreement"), attached hereto as EXHIBIT A;
NOW, THEREFORE, in order to implement the foregoing and in
consideration of the mutual representations, warranties, covenants and
agreements contained herein and for other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows.
1. Issuance of Membership Interest. The Company is hereby issuing to
the Investor the Membership Interest, subject to the terms and conditions of
this Agreement.
2. Conditions to be Met in order for Investor to Retain Membership
Interest.
(a) First Anniversary Condition. If, on the first anniversary
of the Closing Date, (i) the Software has been Successfully Integrated into
ZAI*NET's operations, (ii) ZAI*NET has sold at least two Software Licenses
following the Closing Date, and (iii) the Investor has not terminated his
employment with ZAI*NET (other than for Good Reason) and has not been terminated
by ZAI*NET for Cause, then the Investor shall be permitted to retain and keep
one-half of the Membership Interest set forth on Schedule I hereto (and
associated Proceeds (as defined below)); provided, however, if the conditions
set forth in part (i) and part (iii) of this Section have been satisfied, but
only one Software License has been sold after the Closing Date, then the
Investor shall be permitted to retain one-quarter of the Membership Interest
(and associated Proceeds) set forth on Schedule I hereto. Following the first
anniversary of the Closing Date, a portion of the Membership
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Interest shall be cancelled equal to one-half of the Membership Interest set
forth on Schedule I hereto less the portion which the Investor is permitted to
retain pursuant to this Section 2(a), and any Proceeds associated with the
cancelled interest shall be retained by the Company.
(b) Second Anniversary Condition. If, on the second
anniversary of the Closing Date, (i) the Software has been Successfully
Integrated into ZAI*NET's operations, (ii) ZAI*NET has sold at least six
Software Licenses, and (iii) Investor has not terminated his employment with
ZAI*NET (other than for Good Reason) and has not been terminated by ZAI*NET for
Cause, then the Investor shall be permitted to retain and keep one-half of the
Membership Interest set forth on Schedule I hereto (and associated Proceeds);
provided, however, if the conditions set forth in part (i) and part (iii) of
this Section have been satisfied, but fewer than six Software Licenses have been
sold after the Closing Date, then the Investor shall be permitted to retain the
Second Anniversary Percentage of the Membership Interest set forth on Schedule I
hereto. Following the second anniversary of the Closing Date, a portion of the
Membership Interest shall be cancelled equal to one-half of the Membership
Interest set forth on Schedule I hereto less the portion which the Investor is
permitted to retain pursuant to this Section 2(b), and any Proceeds associated
with the cancelled interest shall be retained by the Company.
(c) Company to Use Reasonable Efforts to Sell Licenses.
Following the Closing Date, the Company shall use reasonable good faith efforts
to sell Software Licenses.
(d) Membership Interest Not Transferable Prior to Satisfaction
of Conditions. In addition to the restrictions on transfer set forth in the LLC
Agreement, the Investor may not Dispose of the Membership Interest (or any
portion thereof) prior to the satisfaction of the conditions set forth in
Section 2(a) and Section 2(b). After the conditions in either Section 2(a) or
Section 2(b) are satisfied (in full or in part), the Investor may (subject to
the terms of the LLC Agreement and the other provisions of this Agreement)
Dispose of any portion of the Membership Interest which the Investor has the
right to retain and which is no longer subject to the conditions of Section 2(a)
and Section 2(b).
(e) Retention of Proceeds Until Conditions are Satisfied. All
distributions, dividends, proceeds and other interests that would otherwise be
payable or distributable to Investor in respect of the Membership Interest,
including cash, property or Securities issuable in respect of the Membership
Interest as a result of any merger, consolidation, combination, reorganization
or similar transaction (collectively, "Proceeds") shall not be paid or
distributed to the Investor but shall instead be retained by the Company until
the conditions set forth in Section 2(a) and Section 2(b) are satisfied. After
the conditions in either Section 2(a) or Section 2(b) are satisfied (in full or
in part), the Company shall pay or distribute to the Investor any previously
retained Proceeds held by the Company attributable to the portion of the
Membership Interest which the Investor has the right to retain and which is no
longer subject to the conditions of Section 2(a) and Section 2(b).
(f) Membership Interest Subject to Dilution. The Investor
acknowledges that the figures set forth on Schedule I reflect only membership
interests issued through the date hereof, and that the Membership Interest will
be subject to dilution (on the same basis
A-2
16
as other Series A Membership Interests) in the event of the issuance of
additional membership interests.
3. Repurchase Rights of Company
(a) Repurchase Rights. In addition to the rights of the
Company and the other investors therein pursuant to the LLC Agreement, upon the
death, Disability or termination of the employment relationship of the Investor
with ZAI*NET, the Company shall have an option to purchase any or all of the
Securities which the Investor is entitled to retain pursuant to this Agreement
and which are owned by the Investor and his or her Permitted Transferees. The
repurchase right set forth in this Section 3(a) shall expire upon the closing of
a Qualified Public Offering. The Company may assign its right to repurchase
under Section 3 to any designee selected by the Company.
(b) Manner of Exercise. The Company shall exercise the option
under Section 3(a) by written notice stating the number of the Securities owned
by the Investor and his or her Permitted Transferees that are being purchased,
which notice may be delivered to the Investor at any time following such event.
(c) Purchase Price. In the case of any purchase pursuant to
this Section 3, the purchase price shall be equal to the Fair Market Value of
the Securities as of the date of termination; provided, however, if the
Investor's employment was terminated by ZAI*NET for Cause or by the Investor
without Good Reason, then the purchase price shall be equal to the lesser of (i)
the Fair Market Value of the Securities as of the date of termination, and (ii)
the Original Value of such Securities.
(d) Closing. The closing of any purchase pursuant to Section 3
shall be held at a time specified by the Company within forty-five (45) days
following the exercise of any right or option thereunder (or such longer time as
may be necessary to determine the purchase price pursuant to the applicable
section) at the then principal offices of the Company, or such other place as is
agreed upon by the parties thereto. Any amounts owed by the Company to the
Investor hereunder may be set off against all amounts owing by the Investor to
the Company, ZAI*NET or their Affiliates (including, without limitation, any
amounts owing under the Purchase Agreement).
4. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Investor as follows:
(a) Organization. The Company is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of Delaware, having full power and authority to own its properties and to
carry on its business as conducted.
(b) Authority. The Company has the requisite power and
authority to deliver this Agreement, and perform its obligations herein, and
consummate the transactions contemplated hereby. The Company has duly executed
and delivered this Agreement and has obtained the necessary authorization to
execute and deliver this Agreement and to perform its obligations herein and
consummate the transactions contemplated hereby. This Agreement is a valid,
legal and binding obligation of the Company enforceable against the
A-3
17
Company in accordance with its terms, except to the extent that enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors' rights generally and subject to general principles
of equity (regardless of whether such enforcement is considered in a proceeding
at law or at equity).
(c) Membership Interest Duly Authorized. The Membership
Interest to be issued to the Investor pursuant to this Agreement, when issued
and delivered in accordance with the terms of this Agreement, will be duly
authorized, validly issued, fully paid and non-assessable.
5. Representations and Warranties of the Investor. The Investor hereby
represents and warrants to the Company as follows:
(a) No Registration. The Investor understands that the
Membership Interest that may be acquired by the Investor has not been registered
under the Securities Act of 1933, as amended (the "Securities Act"), in reliance
on an exemption therefrom for transactions not involving any public offering,
that such Membership Interests has not been approved or disapproved by the
Securities and Exchange Commission ("SEC") or by any other federal or state
agency, and that no such agency has passed on the accuracy or adequacy
disclosures made to the Investor by the Company. The Investor understands that
any certificate or other document representing the Membership Interest (if any)
will bear the following legend (or a comparable legend): "THESE SECURITIES HAVE
NOT BEEN REGISTERED UNDER ANY FEDERAL OR STATE SECURITIES LAWS AND THEREFORE
CANNOT BE SOLD OR TRANSFERRED UNLESS THEY ARE REGISTERED UNDER SUCH SECURITIES
LAWS OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE."
(b) Investors Experience; Other Information. The Investor has
significant experience with the industry in which the Company is engaged and as
a result is capable of evaluating an investment in the Company. The Investor has
sufficient knowledge of finance, securities and investments so as to permit the
Investor to evaluate the merits of an investment in the Membership Interest. The
Investor has skill and experience in investments based on actual participation.
The Investor has had an opportunity to review the financial statements of the
Company, ask questions of and receive answers from the Company, or a person or
persons acting on its behalf, concerning the terms and conditions of his, her or
its investment, which questions have been answered to the full satisfaction of
the Investor, and has also had an opportunity to obtain any additional
information which the Company possesses or can reasonably acquire without undue
expense that is necessary to verify the accuracy of the information furnished to
the Investor.
(c) Limitations on Disposition and Resale. The Investor
understands that the Membership Interests cannot be (i) Disposed of unless such
Disposition is in accordance with the this Agreement and the LLC Agreement
(including Appendix B thereto) and (ii) resold unless registered by the Company
pursuant to the Securities Act and any applicable state securities laws, unless
an exemption therefrom is available, and, accordingly, it may not be possible
for such Investor to liquidate his investment in the Company; and the Investor
agrees not to Dispose of his Membership Interests unless such Disposition is in
accordance with this Agreement and the LLC Agreement and the Membership
Interests have
A-4
18
been so registered or an exemption from the requirement of registration is
available under the Securities Act.
6. LLC Agreement. The Membership Interest issued hereunder shall be
subject to the terms and conditions of the LLC Agreement. The Investor
acknowledges, by his execution and delivery hereof, that he has received a copy
of the LLC Agreement and has read and understands the terms and provisions of
the LLC Agreement and has agreed to be bound thereby. The Investor shall not be
subject to mandatory capital calls pursuant to Section 4.1.2 of the LLC
Agreement.
7. Reorganizations. The Investor agrees to execute and deliver any and
all further documents, consents and writings, and to perform such other actions,
as may be or become reasonably necessary or expedient to effect and consummate
any merger, consolidation, reorganization, combination or similar transaction
proposed by the Company.
8. Arbitration. The parties to this Agreement agree that any and all
legal disputes, controversies or claims arising out of or relating to this
Agreement shall be resolved by binding arbitration at the local Los Angeles
County, California offices of the Judicial Arbitration & Mediation Services,
Inc. ("J.A.M.S."). The parties may agree on a jurist from the J.A.M.S. panel. If
they are unable to agree, J.A.M.S. will provide a list of three available panel
members and each party may strike one. The remaining panel member will serve as
the arbitrator. The aggrieved party may initiate arbitration by: (i) sending
thirty (30) days written notice of an intention to arbitrate by registered or
certified mail to all parties and to J.A.M.S.; and (ii) depositing with J.A.M.S.
the advanced fees required by J.A.M.S. to initiate the arbitration process for
the parties. The notice must contain a description of the dispute, the amount
involved and the remedies sought. Upon notice of demand for arbitration, the
parties agree to execute a submission agreement, provided by J.A.M.S., which
agreement shall provide for discovery in accordance with the Federal Rules of
Civil Procedure and for the Commercial Arbitration rules and procedures
established by the American Arbitration Association. The prevailing party in any
such arbitration proceeding shall be entitled to recover from the other party
reasonable attorneys' fees, costs and expenses in connection with such
arbitration proceeding.
9. Expenses. Each party will pay all fees and expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby.
10. Definitions.
(a) "Cause" shall have the meaning set forth in the Employment
Agreement between ZAI*NET and the Investor.
(b) "Closing Date" shall have the meaning set forth in the
Purchase Agreement.
(c) "Disability" shall have the meaning set forth in the
Employment Agreement between ZAI*NET and the Investor.
(d) "Fair Market Value" means, as of any date, with respect to
a Security, the value of such Security determined as follows:
A-5
19
(i) If the Security is listed on any established
stock exchange or a national market system, including without
limitation, the National Market System of the National Association of
Securities Dealers, Inc. Automated Quotation ("NASDAQ") System, the
Fair Market Value of a Security shall be the closing sales price for
such Security (or the closing bid, if no sales are reported) as quoted
on such system or exchange (or the exchange with the greatest volume of
trading in Securities) on the last market trading day prior to the day
of determination, as reported in the Wall Street Journal or such other
source as the Management Committee deems reliable;
(ii) If the Security is quoted on the NASDAQ System
(but not on the National Market System thereof) or is regularly quoted
by recognized securities dealers but selling prices are not reported,
the Fair Market Value of such Security shall be the average, for the
last five market trading days prior to the day of determination, of the
mean for each such day between the high bid and low asked prices for
the Security, as reported in the Wall Street journal or such other
source as the Management Committee deems reliable;
(iii) In the absence of any established market for a
Security, the Fair Market Value of the Security shall be determined by
the Management Committee in its reasonable discretion (the "Management
Committee Determination"); provided, however, if the holder of a
Security disagrees with the Management Committee Determination for
purposes of this Agreement, the holder shall notify the Company in
writing of such disagreement within ten (10) days following the
delivery of the Management Committee Determination to the holder. If
the holder fails to object in writing within such time period, the
Management Committee Determination shall be final and binding for all
purposes. If the holder does object in writing within such period, then
the Management Committee shall select an independent appraiser to
determine the Fair Market Value, whose determination shall be final and
binding for all purposes. If the Fair Market Value as determined by the
appraiser is greater than 105% of the Management Committee
Determination, then the Company shall bear all of the fees and expenses
of the independent appraiser ("Appraisal Fees"). If the Fair Market
Value as determined by the appraiser is less than 95% of the Management
Committee Determination, then the holder shall bear all of the
Appraisal Fees. Otherwise, the Appraisal Fees shall be split and borne
equally by the Company and the holder. Any amounts owed by the holder
under this paragraph (iii) may be recovered by the Company through the
offset of any amounts owed to the holder by the Company or any
Affiliate.
(e) "Original Value" means, with respect to Membership
Interests or any Securities, an amount equal to (i) the amount shown next to
Investor's name in the "Capital Account Credit"' column of Schedule I, times
(ii) a fraction equal to the fraction that such Membership Interests or
Securities represent of the total Membership Interests or Securities that
Investor would be entitled to retain under this Agreement if all conditions set
forth in Section 2 were satisfied.
(f) "Second Anniversary Percentage" shall be calculated as set
forth in Schedule II.
A-6
20
(g) "Software" shall have the meaning set forth in the
Purchase Agreement.
(h) "Software License" means a license of ZAI*NET software
following the Closing Date that includes the Software (or its functional
successor).
(i) "Successfully Integrated" means that the Software is
capable of receiving information electronically about a trade captured by
ZAI*NET's risk management system, automatically (i.e., without manual
intervention) evaluating that trade, using the full suite of Positron tools,
i.e., credit risk, value at risk, and pricing; and automatically (i.e., without
manual intervention) reporting the results of such evaluations via the ZAI*NET
reporting tools.
11. Additional Document. The Investor agrees to execute and deliver any
and all further documents and writings, and to perform such other actions, as
may be or become reasonably necessary or expedient to effect and carry out the
terms of this Agreement.
12. Governing Law. This Agreement is governed by and shall be construed
in accordance with the law of the State of Delaware, excluding any
conflict-of-laws rule or principle that might refer the governance or
construction of this Agreement to the law of another jurisdiction. If any
provision of this Agreement or the application thereof to any person or
circumstance is held invalid or unenforceable to any extent, the remainder of
this Agreement and the application of that provision to other persons or
circumstances is not affected thereby, and that provision shall be enforced to
the greater extent permitted by law.
13. Number, Gender and Connection of Persons. Throughout this
Agreement, as the context may require, the masculine gender includes the
feminine and the neuter gender includes the masculine and the feminine; the
singular tense and number includes the plural, and the plural tense and number
includes the singular; the past tense includes the present, and the present
tense includes the past; references to parties, sections, paragraphs and
exhibits mean the parties, sections, paragraphs and exhibits of and to this
Agreement; and periods of days, weeks or month mean calendar days, weeks or
months.
14. Assignment. The Investor shall not have either the right or the
power to assign or delegate any provision of this Agreement except with the
prior written consent of the Management Committee of the Company. The Company
may assign its rights and obligations hereunder to any Affiliate. Except as
provided in the first sentence of this Section 14, this Agreement shall be
binding upon and shall inure to the benefit of the parties' respective
successors, assigns, executors and administrators.
15. Counterparts. This Agreement may be executed in separate
counterparts, each of which shall be deemed an original and both of which shall
constitute one and the same document.
A-7
21
IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Agreement as of the date first set above.
THE COMPANY
CAMINUS ENERGY VENTURES LLC
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Its: Member, Management Committee
ZAI*NET
ZAI*NET SOFTWARE, L.P.
By: Caminus Energy Ventures LLC,
its General Partner
By: /s/ Xxxxxxx Xxxxxxx
-----------------------------------
Name: Xxxxxxx Xxxxxxx
Its: Member, Management Committee
THE INVESTOR
XXXXXX XXX
/s/ Xxxxxx Xxx
---------------------------------------
A-8
22
SCHEDULE I
SCHEDULE OF MEMBERSHIP INTERESTS
--------------------------------------------------------------------------------------------------------------------
Name and Address Membership Interest
of Member Capital Account Credit (subject to dilution)
--------------------------------------------------------------------------------------------------------------------
Xxxxxx Xxx $303,333 0.64748%
--------------------------------------------------------------------------------------------------------------------
All Other Members $46,545,000 99.35252%
--------------------------------------------------------------------------------------------------------------------
SCHEDULE II
SECOND ANNIVERSARY PERCENTAGE
LICENSES OF THE
SOFTWARE SOLD IN
SECOND YEAR
--------------------------------------------------------------------------------------------------------------------
0 1 2 3 4 5 6
--------------------------------------------------------------------------------------------------------------------
0 0.00% 8.33% 16.67% 25.00% 33.33% 41.67% 50.00%
--------------------------------------------------------------------------------------------------------------------
LICENSES OF 1 0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 50.00%
--------------------------------------------------------------------------------------------------------------------
THE 2 0.00% 12.50% 25.00% 37.50% 50.00% 50.00% 50.00%
--------------------------------------------------------------------------------------------------------------------
SOFTWARE 3 12.50% 25.00% 37.50% 50.00% 50.00% 50.00% 50.00%
--------------------------------------------------------------------------------------------------------------------
SOLD IN 4 25.00% 37.50% 50.00% 50.00% 50.00% 50.00% 50.00%
--------------------------------------------------------------------------------------------------------------------
FIRST YEAR 5 37.50% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
--------------------------------------------------------------------------------------------------------------------
6 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%
--------------------------------------------------------------------------------------------------------------------
The "Second Anniversary Percentage" shall be calculated based on the
above chart. For example, if all other conditions were met and if 1 Software
License were sold during the first year following the Closing Date, and 2
Software Licenses were sold during the second year following the Closing Date,
the "Second Anniversary Percentage" would be equal to 20.00%.
In that case, Xxxxxx would be entitled to retain a 0.16224% Membership
Interest as of the first anniversary (subject to adjustment to reflect dilution
since the Closing Date), and the remaining portion of one-half of the Membership
Interest (0. 16224%) would be cancelled. On the second anniversary, Xxxxxx would
be entitled to retain an additional 0. 12979% Membership Interest as (subject to
adjustment to reflect dilution since the Closing Date), and the remaining
Membership Interest (0. 19469%) would be cancelled.
A-9
23
EXHIBIT 1
LIST OF EQUIPMENT, COMPUTERS, ETC.
COMPUTER HARDWARE
7/19/96 Dell Dell Latitude Lap Top Computer $ 3,588.00
7/27/96 Computer City Laser Jet 5L $ 480.00
7/30/96 Computer City Optima 144+ Fax Modem $ 185.00
8/12/96 Dell Sportster Modem $ 233.00
8/13/96 Dell Lite Pro 210 $ 4,677.00
10/4/96 Micro Center Houston 10 Base-T Equipment $ 87.00
10/7/96 Computer City New Media Ethernet $ 194.00
5/28/97 Dell Xxxxxx Home Office P200 $ 4,096.71
6/6/97 Computer City Xxxxxx Home Office P200 Monitor $ 757.74
6/9/97 CDW Computer Centers 4.3GB Hard Drive, CJ Home PC $ 976.75
6/16/97 Dell Back-UPS PRO 420 $ 247.89
7/17/97 Dell CDR_Drive Internal, CJ Home PC $ 735.10
7/31/97 Dell XPI-CD Laptop $ 5,376.77
8/1/97 Insync Internet Ascend Pipeline 75 - Destroyed by lightning $ 920.13
9/26/97 Insync Internet Replacement Ascend P70 - Analog port down $ 920.13
11/20/97 Dell P300, used by Xxxxxx $ 3,374.78
11/25/97 Computer City Modem, Cable, Access 97, ScanJet $ 603.91
3/9/98 Micro Center Houston 2 x HP LaserJet 6L, Cables, Extra Printer Ram $ 863.84
3/25/98 Micro Center Houston External CD-R & Controller $ 961.26
6/16/98 Micro Time P400 Workstation + Server $ 6,698.00
7/23/98 Insync Internet 2 x Ascend P75S Pipelines $ 1,968.03
7/29/98 CDW Computer Centers Seagate 9.1GB Drive, Server $ 834.08
7/30/98 Dell 128MBx3 RAM, Server, Office $ 706.02
8/29/98 Xxxx Xxxxx Ascend P50 Pipeline - Home Office $ 400.00
8/28/98 Xxxx X Xxxxx 2 x Hitachi Computer Monitors $ 2,010.75
-------------------
TOTAL COMPUTER HARDWARE $ 41,895.89
-------------------
COMPUTER SOFTWARE
7/11/96 Microsoft MicroSoft Access $ 306.00
7/12/96 Software Safari MicroSoft Excel 5.0 $ 162.00
7/12/96 Software Safari MicroSoft Office $ 260.00
8/7/96 Computer City DT/Lang Visual C++ $ 102.00
8/30/96 Stirling Technologies, Inc. Install Shield $ 218.00
0/0/00 Xxxxx Xxxxxx Xxxxxxx XX Visual C++ $ 108.00
9/8/96 Egghead Software Windows NT Workstation $ 325.00
10/3/96 Computer City Lantastic $ 109.00
10/3/96 Computer City DT/OSYS WIN F/Work $ 161.00
10/5/96 Micro Center Houston Novell $ 184.00
10/21/96 Micro Center Houston Que Access '95 $ 55.00
3/10/97 Logic Works Inc. Xxxxx $ 3,566.84
3/19/97 Nu-Mega Technologies Bounds Checker Pro $ 506.00
4/4/97 Mortice Xxxx Systems MKS Source Integrity $ 609.00
6/6/97 Computer City Norton Utilities, Antivirus $ 176.43
7/26/97 Egghead Software Windows NT Server $ 831.28
24
8/3/97 UCA Microsoft Visual Studio x 2 $ 2,173.67
8/4/97 Nu-Mega Technologies Bounds Checker Pro $ 555.50
8/7/97 Mortice Xxxx Systems MKS Source Integrity $ 619.00
12/1/97 Provantage Corp TimeLock Software $ 626.00
3/10/98 Oracle Direct Mktg Oracle Server, 5 Client Pack $ 1,611.69
3/23/98 Microsoft MS Office Developer SDK & Training CDs $ 705.20
4/16/98 CDW Computer Centers Crystal Reports V6 x 2 $ 501.75
7/9/98 Raleigh Group International Visual Intercept $ 1,418.00
8/29/98 Xxxxxxx X Xxxxxxx Expenses for 7/10-8/13 $ 257.95
8/31/98 Compuware Corp Active X Components / Software $ 1,084.36
-------------------
TOTAL COMPUTER SOFTWARE $ 17,232.67
-------------------
FURNITURE
9/2/96 Office Depot Office Chair $ 71.00
5/22/97 Danish Inspirations Bookcase x 2 $ 430.84
8/18/97 Danish Inspirations Home Office Bookcase, Desk $ 452.49
4/21/98 Danish Inspirations Ergonomic Office Chair $ 1,146.37
6/22/98 Danish Inspirations 3 Desks, 1 Filing Cabinet, 3 Chair $ 3,071.05
-------------------
TOTAL $ 5,171.75
FURNITURE
-------------------
TOTAL ASSETS $ 64,300.31
-------------------
TOTAL ASSETS LESS ACCUMULATED DEPRECIATION $ 22,875.53
===================
DATE NAME MEMO AMOUNT
---- ---- ---- ------
ACCUMULATED DEPRECIATION
1/31/97 January Monthly Depreciation $ (1,954.75)
2/28/97 February Monthly Depreciation $ (1,954.75)
3/31/97 March Monthly Depreciation $ (1,954.75)
4/30/97 April Monthly Depreciation $ (1,954.75)
5/31/97 May Monthly Depreciation $ (1,954.75)
6/30/97 June Monthly Depreciation $ (1,954.75)
7/31/97 July Monthly Depreciation $ (1,954.75)
8/31/97 August Monthly Depreciation $ (1,954.75)
9/30/97 September Monthly Depreciation $ (1,954.75)
10/31/97 October Monthly Depreciation $ (1,954.75)
11/30/97 November Monthly Depreciation $ (1,954.75)
12/31/97 December Monthly Depreciation $ (1,954.75)
1/31/98 January Monthly Depreciation $ (1,996.42)
2/28/98 February Monthly Depreciation $ (1,996.42)
3/31/98 March Monthly Depreciation $ (1,996.42)
4/30/98 April Monthly Depreciation $ (1,996.42)
5/31/98 May Monthly Depreciation $ (1,996.42)
6/30/98 June Monthly Depreciation $ (1,996.42)
7/31/98 July Monthly Depreciation $ (1,996.42)
8/31/98 August Monthly Depreciation $ (1,996.42)
9/30/98 September Monthly Depreciation $ (1,996.42)
--------------------
TOTAL ACCUMULATED DEPRECIATION $ (41,424.78)
--------------------
A-2
25
EXHIBIT 2
ASSIGNED CONTRACTS
1. Computer Program License Agreement between Conectiv, Inc. and Positron
Energy Consulting, Inc. dated May 1, 1998.
2. Software License Agreement between Positron Energy Consulting (licensor)
and Vitol Gas and Electric (licensee) dated May 21, 1997.
3. Edison Source Purchase Order issued to Positron Energy Consulting dated
February 20, 1997.
4. Edison Enterprises Purchase Order Change Order issued to Positron Energy
Consulting dated February 17, 1998.
5. Software License Agreement (Edison Source Purchase Order) between
Positron Energy Consulting (licensor) and Edison Source (licensee) dated
December 8, 1997.
6. Confidentiality and Mutual Nondisclosure Agreement between Edison Source
and Xxxxxx Xxx dated December 6, 1996.
7. Software License Agreement (Edison Source Purchase Order 97-01-TJO-006)
between Positron Energy Consulting (licensor) and Edison Source
(licensee) dated January 20, 1997.
8. Con Edison Purchase Order issued to Positron Energy Consulting dated
January 23, 1998.
9. Consolidated Edison Company on New York, Inc. Standard Terms and
Conditions of Service Contracts.
10. Software License Agreement between Positron Energy Consulting and Western
Resources dated as of October 5, 1998.
11. Program Maintenance Agreement between Positron Energy Consulting and
Western Resources dated as of October 5, 1998.
12. Software License Agreement between Positron Energy Consulting and
Pacificorp, as amended by Amendment 1 dated as of October 20, 1998.
26
EXHIBIT 3
INTELLECTUAL PROPERTY
1. The Software.
2. Farpoint Technologies, Inc. Software License Agreement (undated).
3. DynamiCube License Agreement (undated).
4. True DBGrid Pro License and Redistributable Files Agreement (undated).
5. Software FX. Inc. Chart FX License Card (undated).
6. Numerical Recipes Software (undated).
7. Computer Program License Agreement between Conectiv, Inc. and Positron
Energy Consulting, Inc. dated May 1. 1998.
8. Filing Receipt for Trademark Application filed September 1, 1998
Licenses of the Software
1. Software License Agreement between Positron Energy Consulting (licensor)
and Vitol Gas and Electric (licensee) dated May 21, 1997.
2. Software License Agreement (Edison Source Purchase Order) between
Positron Energy Consulting (licensor) and Edison Source (licensee) dated
December 8, 1997.
3. Software License Agreement (Edison Source Purchase Order 97-01-TJO-006)
between Positron Energy Consulting (licensor) and Edison Source
(licensee) dated January 20, 1997.
4. Software License Agreement between Positron Energy Consulting and Western
Resources dated as of October 5, 1998.
5. Software License Agreement between Positron Energy Consulting and
Pacificorp, as amended by Amendment 1 dated as of October 20, 1998.
27
EXHIBIT 4
LIST OF CONTRACTS
Contracts on Exhibit 2
Office Lease
28
EXHIBIT 5
SCHEDULE OF RECEIPTS AND EXPENDITURES
POSITRON ENERGY CONSULTING
PROFIT AND LOSS
FOR THE YEAR ENDED DECEMBER 31, 1997 AND THE TEN MONTHS
ENDED OCTOBER 31, 1998
JAN - DEC '97 JAN - OCT '98
----------------------------------------
ORDINARY INCOME/EXPENSE
INCOME
REIMBURSED EXPENSES $65,201.10 $78,479.65
SALES
Consulting Income $148,781.25 $272,075.00
Discount $0.00 $(26,622.50)
Software Income $77,500.00 $80,000.00
----------------------------------------
TOTAL SALES $226,281.25 $325,452.50
----------------------------------------
TOTAL INCOME $291,482.35 $403,932.15
----------------------------------------
COST OF GOODS SOLD
Contract Labor $10,000.00 $0.00
Direct Labor $8,333.32 $92,708.23
Reimbursable Travel Expense $63,891.68 $40,370.50
Reimbursed Expenses Employees $0.00 $38,476.38
----------------------------------------
TOTAL COGS $82,225.00 $171,555.11
----------------------------------------
GROSS PROFIT $209,257.35 $232,377.04
----------------------------------------
EXPENSE
Bank Service Charges $77.72 $43.15
Computer Software Expense $2,958.19 $2,607.35
Computer Supplies Expense $2,711.48 $2,978.69
Contributions $124.00 $50.00
Depreciation Expense $23,457.00 $19,964.20
Dues and Subscriptions $481.15 $20.00
Education $1,840.50 $6,223.14
Finance Charge $2,327.36 $2,063.38
Insurance: Property $0.00 $368.00
Internet Service $1,667.28 $5,270.82
Licenses and Permits $0.00 $1,365.00
Marketing $382.11 $39,206.84
Office Supplies $622.92 $1,421.89
Pager $277.71 $0.00
Payroll Taxes $920.88 $5,872.59
Postage and Delivery $151.71 $625.89
Printing and Reproduction $0.00 $2,038.86
Professional Fees: Accounting $250.00 $4,316.43
Professional Fees: Legal Fees $2,250.43 $901.00
Rent $2,400.00 $3,275.00
29
Repairs: Building $0.00 $1,522.65
Repairs: Computer $0.00 $35.00
Telephone $1,505.96 $4,808.08
Travel & Ent: Meals $76.56 $311.36
Travel: Education $0.00 $1,017.40
Travel: Marketing $8,221.34 $12,307.77
Travel: Other $125.00 $0.00
Utilities: Gas and Electric $541.68 $385.36
Utilities: Water $48.90 $69.76
----------------------------------------
TOTAL EXPENSE $53,419.88 $119,069.61
----------------------------------------
NET INCOME $155,837.47 $113,307.43
========================================
POSITRON ENERGY CONSULTING
Open Invoices by Customer
AS OF OCTOBER 31, 1998
TYPE NUMBER DATE OPEN BALANCE
---- ------ ---- ------------
CONECTIV
Invoice 46 10/31/98 $11,250.00
------------------------
Total Conectiv $11,250.00
------------------------
PACIFICORP
Invoice 45 9/23/98 $12,323.92
Invoice 49 10/30/98 $3,924.71
------------------------
Total Pacificorp $16,248.63
------------------------
VITOL GAS AND ELECTRIC
Invoice 42 8/30/98 $5,000.00
Invoice 48 10/26/98 $6,615.00
------------------------
Total Vitol Gas and Electric $11,615.00
------------------------
WESTERN RESOURCES
Invoice 50 10/30/98 $697.41
------------------------
Total Western Resources $697.41
------------------------
TOTAL $39,811.04
========================
POSITRON ENERGY CONSULTING
Accounts Payable
AS OF OCTOBER 31, 1998
BALANCE
-------
American Express $161.61
Citibank DIVIDEND Card $2,776.47
First USA Visa 0242 $154.80
------------------
TOTAL $3,092.88
==================
A-2
