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EXHIBIT 99.d
PLAN OF REORGANIZATION AND AGREEMENT
Dated October 10, 2000, 2000, by and between xXxxxxx.xxx, Inc., a Colorado
corporation (called "Purchaser") and Xxxxxx Xxxxxx, Xxxxxx Eshgieh, and Xxxxxxx
Xxxx (called "Shareholders"), all of the Shareholders of Continental Computer
Exchange, Inc., a California corporation (called "Company").
Plan of Reorganization
This plan of reorganization shall be a reorganization within the meaning of Code
Section 368(a)(1)(B) as amended. Purchaser shall acquire all of the outstanding
stock of the Company in exchange solely for a part of Purchaser's voting common
stock.
Agreement
In order to consummate the above plan of reorganization and in consideration of
the mutual benefits to be derived and the mutual agreements contained, Purchaser
and Shareholders approve and adopt this agreement and plan of reorganization and
mutually covenant and agree with each other as follows:
1. Shares To Be Transferred and Shares To Be Issued
1.1 On the closing date the Shareholders shall transfer to Purchaser
certificates for the number of shares of the Company's common stock specified on
Schedule 1.1, which in the aggregate shall represent all of the issued and
outstanding shares of the Company's common stock. These certificates shall be
duly endorsed in blank by the applicable Shareholders or accompanied by duly
executed stock powers in blank with signatures guaranteed by a bank or trust
Company or member firm of the New York Stock Exchange.
1.2 In exchange for the Company's stock being transferred pursuant to
subparagraph 1.1, Purchaser shall on the closing date, and contemporaneously
with the transfer of Company's common stock to it by Shareholders, deliver
copies of instructions provided to Corporate Stock Transfer, the Company's
transfer agent, to issue and deliver to the Shareholders the number of shares of
Purchaser's common stock specified on Schedule 1.2.
2. Representations and Warranties of Shareholders
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2.1 Ownership of Stock
Shareholders are the record and beneficial owners and holders of the number of
fully paid and nonassessable shares of the Company's common stock listed in
Schedule 1.1 as of this date and will continue to own these shares of the
Company's common stock until delivery to the Purchaser on the closing date, and
all shares of Company common stock are or will be on the closing date owned free
and clear of all liens, encumbrances, charges and assessments of every nature
and subject to no restrictions with respect to transferability. The Shareholders
will on the closing date have full power and authority to assign and transfer
their shares of the Company in accordance with these terms.
2.2 Organization and Authority
(a) Company is a corporation duly organized, validly existing and in
good standing under the laws of the State of California with all requisite
corporate power and authority to own, operate and lease its properties and to
carry on its business as now being conducted, and is duly qualified and in good
standing in every jurisdiction in which the property owned, leased or operated
by it or the nature of the business conducted by it makes qualification
necessary. The authorized stock of the Company is 10,000 shares of common stock,
without par value, all of which are issued and outstanding.
(b) Company has no subsidiaries.
(c) The outstanding shares of Company are legally and validly issued,
fully paid and nonassessable.
(d) Company does not own 10 percent or more of the outstanding stock of
any corporation except those that it owns all of the outstanding stock.
(e) The execution and delivery of this agreement does not, and, the
consummation of the transaction contemplated will not violate any provision of
Company's certificate of incorporation or bylaws, or any provisions of, or
result in the acceleration of any obligation under, any mortgage, lien, lease,
agreement, instrument, court order, arbitration award, judgment or decree to
which Company is a party or by which it or any of them is bound and will not
violate any other
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restriction of any kind or character to which it or any of them is subject.
(f) Except for this agreement, there are no outstanding options,
contracts, calls, commitments or demands of any character relating to authorized
or issued stock of the Company.
2.3 Financials
(a) True copies of the financial statements of Company, consisting of
balance sheets as of the close of business December 31, for each of the three
years ended December 31, 1997, 1998 and 1999, and as of the close of business
August 31, 2000 and the income statements for the three years and six months
ended August 31, 2000, have been delivered by Company to Purchaser. These
financial statements are all unaudited. All of the financial statements are true
and correct in all material respects and present an accurate and complete
disclosure of the financial condition of Company as of their respective dates,
and the earnings for the periods covered, in accordance with generally accepted
accounting principles applied on a consistent basis.
(b) All accounts receivable (net of reserves for doubtful accounts) of
Company shown on the books of account on August 31, 2000, and as incurred in the
normal course of business since that date, are collectible in the normal course
of business.
(c) On August 31, 2000, the inventories of Company included in the
balance sheet of that date had a commercial value at least equal to the value
shown in the balance sheet, all of which are usable and are valued at cost or
market, whichever is lower, and assure a normal margin for each product line
when sold.
(d) Company has good and marketable title to all of their assets,
business and properties, including, without limitation, all properties reflected
in the balance sheet as of August 31, 2000, except as disposed of in the normal
course of business, free and clear of any mortgage, lien, pledge, charge, claim
or encumbrance, except as shown on the balance sheet as of August 31, 2000, and,
in the case of real properties, except for rights-of-way and easements which do
not adversely affect the use of the property.
(e) All currently used property and assets of Company, or in which it
has an interest or which it is in possession, are
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substantially in good operating condition and repair subject only to ordinary
wear and tear.
(f) The financial statements for Company, consisting of a consolidated
balance sheet as of the close of business August 31, 2000, and a consolidated
income statement for the eight months ended August 31, 2000, previously
delivered:
(i) Are true and correct in all material respects and present an
accurate and complete disclosure of its consolidated financial condition as of
August 31, 2000, and earnings for the eight months ended August 31, 2000;
(ii) Satisfy the representations and warranties made in subparagraphs
(b), (c) and (d) of this subparagraph 2.2 as of the date the representations and
warranties were made with respect to the financial statement;
(iii) Disclose a consolidated book net worth in excess of $10,000; and
(iv) Disclose a consolidated net income after taxes of in excess of
$100.00.
2.4 Changes Since Specified Date
Since August 31, 2000, there has not been:
(a) Any material adverse change in the financial condition of Company;
(b) Any loss, damage or destruction to the properties of Company
(whether or not covered by insurance) materially adversely affecting their
business or properties;
(c) Any change in the compensation pattern of Company as established in
preceding years, nor any material increase in the compensation payable or to
become payable to any of their officers, directors, employees or agents, except
as disclosed to Purchaser in writing;
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(d) Any labor dispute or disturbance, litigation, event or condition of
any character, which materially adversely affects the business or future
prospects of Company;
(e) The issuance of additional shares of stock or other securities by
Company;
(f) Any distribution of assets, by way of dividends or purchase or
otherwise by Company;
(g) Any borrowings from financial institutions except for routine
borrowings from Finova;
(h) Any mortgage, pledge, lien or encumbrance made on any of the
properties or assets of Company, other than mechanics' and materialmen's liens
arising in the normal course of business; or
(i) Any sale, transfer or other disposition of assets of Company, except
in the normal course of business.
2.5 Liabilities
(a) There are no liabilities of Company, whether accrued, absolute,
contingent or otherwise, which arose or relate to any transaction of Company,
its agents or servants occurring prior to August 31, 2000, which are not
disclosed by or reflected in the financial statements, except as disclosed in
Schedule 2.5(a). There are no liabilities of Company which have arisen or relate
to any transaction of Company, its agents or servants, occurring since August
31, 2000, other than normal liabilities incurred in the normal conduct of
Company's business, except as disclosed in Schedule 2.5(a). As of this date
there are no known circumstances, conditions, happenings, events or
arrangements, contractual or otherwise, which may give rise to liabilities,
except in the normal course of Company's business, except as disclosed in
Schedule 2.5(a).
(b) All federal, state, county and local income, ad valorem, excise,
sales, use, gross receipts and other taxes and assessments which are due and
payable have been duly reported, fully paid and discharged as reported by
Company, and there are no unpaid taxes which are or could become a lien on the
properties and assets of Company, except as provided for in the financial
statements of August 31, 2000,
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or have been incurred in the normal course of Company's business since that
date. All tax returns of any kind required to be filed have been filed and the
taxes paid or accrued. Company is a subchapter S corporation and as such its
federal income tax returns have not been audited. Company have no knowledge of
any possible deficiency assessments in respect to federal income tax returns or
other tax returns filed by them, except as disclosed to Purchaser in writing.
(c) All parties with whom Company have contractual arrangements are in
substantial compliance with those arrangements. Company is not in default in any
material respect under any contracts to which any of them is a party. All leases
and contracts to which Company is a party are assignable or the other party has
consented to assignment.
(d) All corporate acts required of Company have been taken and all
reports and returns required to be filed by them with any governmental agency
have been filed. Company is in substantial compliance with all, and have no
notice of any claimed violation of any, applicable federal, state, county and
local laws, ordinances or regulations, including those applicable to
discrimination in employment, pollution and safety except as disclosed in
Schedule 2.5(d).
(e) There are no legal, administrative or other proceedings,
investigations or inquiries, product liability or other claims, judgments,
injunctions or restrictions, either threatened, pending or outstanding against
or involving Company, or any of its assets, properties, or business, nor does
Company know, or have reasonable grounds to know, of any basis for any
proceedings, investigations or inquiries, product liability or other claims,
judgments, injunctions or restrictions, except as disclosed in Schedule 2.5(e).
(f) All of the real tangible and personal properties of Company are in
substantial compliance with applicable laws, ordinances, rules and regulations
of all public authorities having jurisdiction thereover.
(g) Company does not have any contracts with any governmental body that
is subject to renegotiation.
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(h) The past and anticipated future operations of Company do not
infringe or violate any patents, patent rights, trademarks, trade names,
copyrights and/or licenses of others.
(i) To the knowledge of the officers of Company, there is no event,
condition or trend of any character, which might materially and adversely affect
the financial condition, business, properties, or assets of Company.
(j) The assets of Company are adequately insured and all policies of
insurance carried by Company are in full force and all premiums are paid to
date.
(k) All negotiations relative to this agreement and the transactions
contemplated have been carried on directly by Shareholder with Purchaser without
the intervention of any broker or third party. Neither Company nor Shareholder
has engaged, consented to or authorized any broker, investment banker or third
party to act on its behalf directly as broker or finder in connection with the
transactions contemplated by this agreement.
(l) There are no inquiries, investigations or pending claims or
litigation challenging or threatening to challenge Company's right, title and
interest with respect to its continued use, or right to preclude others from
using, any patent, patent application, invention, discovery, trademark, trade
name or copyright of Company.
(m) Company has not granted any license or made any assignment of any of
its patents, patent applications, invention discoveries, trademarks, trade names
or copyrights, nor does it pay any royalties or other consideration for the
right to use any patent, patent right, trademark, trade name or copyright of
others.
(n) To the knowledge of the officers of Company, the Company is not a
party to or bound by any agreement, deed, lease or other instrument that is so
burdensome as to materially affect or impair the operation of Company.
2.6 Proprietary Rights
Schedule 2.6 sets forth (i) all of the Company's registrations of trademarks and
of other marks, trade names or other trade rights, and
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all pending applications for any such registrations, (ii) all of the Company's
patents and copyrights and all pending applications therefore and (iii) all
other trademarks and other marks, trade names and other trade rights of the
Company. The marks, trade names, trade rights and registrations identified on
the Disclosure Schedule together with all of the Company's trade secrets,
designs, plans, specifications and other proprietary rights, whether or not
registered are hereinafter collectively referred to as the "Proprietary Rights."
The Proprietary Rights include all of the proprietary rights of the type
referred to above which are material to the conduct of the Business of the
Company. No person has a right to receive a royalty or similar payment in
respect of any Proprietary Rights pursuant to any contractual arrangements
entered into by the Company, and no person otherwise has a right to receive a
royalty or similar payment in respect of any such Proprietary Rights. The
Company has no licenses granted by or to it and no other agreements to which it
is a party, relating in whole or in part to any of the Proprietary Rights. The
Company's use of the Proprietary Rights is not infringing upon or otherwise
violating the rights of any third party in or to such Proprietary Rights, and no
proceedings have been instituted against or notices received by the Company that
are presently outstanding alleging that the Company's use of its Proprietary
Rights infringes upon or otherwise violates any rights of a third party in or to
such Proprietary Rights. To the best knowledge of the Company, no other person
is infringing upon or otherwise violating the rights of the Company with respect
to any of the Proprietary Rights.
2.7 Environmental Compliance
(a) As used in this Section 2.7, the following terms have the meanings
set forth:
(i) " Company" shall mean and include the Company, affiliates,
partnership and joint ventures which the Company owns, controls or of which it
is a part and all predecessor companies or businesses which no longer exist but
whose assets and obligations the Company (as defined in this paragraph (i)) may
have seceded to or assumed;
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(ii) "Environmental Law" means and shall refer to any applicable
federal, state, local or foreign statute, ordinance, regulation, rule, judgment,
order, notice requirement, court decision or agency guideline which relates to
the protection or clean-up of the environment, the preservation or protection of
water, air, wildlife, plants or other natural resources, or the health and
safety of persons and property;
(iii) "Facility" shall mean and refer to each vessel, if any, each
parcel of real property, each building and any and every part thereof, currently
owned, leased or operated by the Company;
(iv) "Former Facility" shall mean and refer to each vessel, if any, each
parcel of real property, each building and any and every part thereof, owned,
leased or operated by the Company at any time, excluding Facilities;
(v) "Release" shall have the same meaning as defined in any
Environmental Law; and
(vi) "Substance" shall mean and refer to asbestos, PCBs, radon gas,
petroleum products or by-products, toxic, infectious, reactive, corrosive,
ignitable or flammable chemicals or chemical compounds and any other hazardous
substance, material or waste (as defined in any Environmental Law), whether
solid, liquid or gas.
(b) Except as set forth and identified in Schedule 2.7:
(i) The Facilities are, and at all times have been, and all Former
Facilities were at all times when owned, leased or operated by the Company
owned, leased and operated in compliance with all Environmental Laws;
(ii) There is no Substance being used, generated, treated, stored,
transported, disposed of or otherwise existing on, under, about or from any
Facility;
(iii) The Company has, and at all times has had, all permits required
under all applicable Environmental Laws and is, and at all times has been, in
compliance with all such permits;
(iv) The consummation of any of the transactions contemplated by this
Agreement will not require an application for issuance, renewal,
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transfer or extension of, or any other administrative action regarding, any
environmental permit;
(v) The Company has at all times used, generated, treated, stored,
transported, disposed of or otherwise handled its Substances in compliance with
all Environmental Laws;
(vi) There is not now and has not been at any time in the past any
underground storage tank or pipeline at any Facility or Former Facility where
the installation, use, maintenance, repair, testing, shut-in or removal of such
tank or pipeline was not in compliance with all Environmental Laws and there has
been no spill, leakage or other Release from or rupture of any such tank or
pipeline;
(vii) The Company has not received any notice that it is or was claimed
to be in violation of or noncompliance with any Environmental Law, nor is there
any pending or threatened suit, action, claim or proceeding against the Company
under any Environmental Law or with respect to any spill, discharge, Release or
mishandling of any Substance;
(viii) There are no consent decrees or agreements with, or liens by, any
governmental authority or quasi-governmental entity relating to any
Environmental Law that bind or affect the Company or any Facility;
(ix) No current or past use, generation, treatment, transportation,
storage or disposal practice of the Company has or will result in any liability
under the Comprehensive Environmental Response, Compensation and Liability Act
or any state law of similar effect;
(x) There has been no spill, discharge or other Release of any Substance
on, under, about or from any Facility or Former Facility;
(xi) Copies of the written reports, and all parts thereof, of all
environmental audits or assessments which have been conducted at any Facility or
Former Facility within the past five (5) years, either by the Company or
attorney or environmental consultant or engineer engaged for such purpose, are
listed in the Disclosure Schedule and have been delivered to the Purchaser;
(xii) Except as set forth in the Disclosure Schedule, the Company is not
a party, whether as a direct signatory or as a successor, assign
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or third party beneficiary, or otherwise bound, to any lease or other contract
(excluding insurance policies disclosed elsewhere in this Agreement) under which
the Company is obligated by or entitled to the benefits of, directly or
indirectly, any representation, warranty, indemnification, covenant, restriction
or other undertaking concerning environmental conditions;
(xiii) The Company has not released any other person from claims under
any Environmental Law or has waived any rights concerning any other
environmental condition;
(xiv) The Company has given all notices and warnings, made all reports,
and has kept and maintained all records required by and in compliance with all
Environmental Laws; and
(xv) The Company has not made any filing under any state environmental
clean-up responsibility act or any other state law of similar effect.
2.8 Employee Benefit Plans
(a) Schedule 2.8 contains a complete list of (i) each "employee pension
benefit plan" ("Business Pension Plans"); (ii) each "employee welfare benefit
plan" ("Business Welfare Plans"), as such terms are defined in Section 3 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), including
plans otherwise excluded from the operation of ERISA by Section 4(b)(4) or
4(b)(5) thereof, maintained or contributed to by Company or any Subsidiary for
or on behalf of employees, or to which any employee contributes on account of
his employment (such Business Pension Plans and Business Welfare Plans are
hereinafter collectively referred to as "Business Plans"); and (iii) each plan,
salary practice or arrangement, including bonus, incentive compensation, stock
option, stock purchase, sick pay, vacation pay, severance pay or other fringe
benefit plan or program, whether formal or informal, which is not a Business
Plan, which is applicable to any employee (such plans, salary practices and
arrangements are hereinafter referred to as "Business Benefit Arrangements").
Company has furnished to Purchaser copies of all Business Plans and of all
documents relating to Business Plans or Business Benefit Arrangements reasonably
requested by the Purchaser.
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(b) Each Business Plan is in compliance with the provisions of ERISA (if
applicable), the applicable provisions of the Internal Revenue Code of 1986, as
amended (the "Code"), and all other applicable laws. No Business Plan, no trust
created under any Business Plan, and no trustee or administrator thereof has
engaged in a transaction which might subject Company to the tax or penalty on
prohibited transactions imposed by Section 4975 of the Code or to a civil
penalty imposed by Section 502 of ERISA.
(c) Except as set forth in Schedule 2.8, no Business Plan subject to
Title IV of ERISA (other than "multi-employer plans" (as defined in Section
3(37) of ERISA)) has been completely or partially terminated, nor has there been
a "reportable event," as such term is defined in Section 4043(b) of ERISA, with
respect to any such plan, except as may occur as a result of this Agreement.
(d) Company does not contribute to any plan, which is a "multi- employer
plan" as defined in Section 3(37) of ERISA.
(e) Company does not maintain or contribute to any plan which is subject
to Section 404A of the Code for or on behalf of its employees.
2.9 Accuracy of All Statements Made by Seller
No representation or warranty by Shareholders in this agreement, nor any
statement, certificate, schedule or exhibit furnished or to be furnished by or
on behalf of Shareholders pursuant to this agreement, nor any document or
certificate delivered to Purchaser pursuant to this agreement or in connection
with actions contemplated, contains or shall contain any untrue statement of
material fact or omits or shall omit a material fact necessary to make the
statement contained not misleading.
2.10 Lack of Economic Interest in Competitor
Shareholders do not have (nor does any person who would be his/her heir or
descendant if he/she were not living or his/her spouse) any direct or indirect
interest (except through ownership of securities listed on a national securities
exchange) in (i) any entity which does business with Company or is competitive
with their business or (ii) any property, asset or right which is used by
Company in the conduct of their business.
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2.11 Obligations to Company
All obligations of any Shareholder (or any person who would be an heir or
descendant if he or she were not living or his or her spouse), or any entity in
which he or she has any interest (except through ownership of securities listed
on a national securities exchange), to Company listed as to amount, payment
schedule and obligor on Schedule 2.11 hereto.
3. Representations and Warranties of Purchaser
Purchaser represents and warrants as follows:
3.1 Organization and Good Standing
Purchaser is a corporation duly organized, validly existing and in good standing
under the laws of the state of California.
3.2 Performance of This Agreement
The board of directors of Purchaser has authorized the execution and performance
of this agreement and the issuance of the stock contemplated herein.
3.3 Legality of Shares To Be Issued
The shares of Purchaser's common stock to be delivered pursuant to this
agreement, when delivered, will have been duly and validly authorized and issued
by Purchaser and will be fully paid and nonassessable. The shares of Purchaser's
common stock to be issued will have been listed for trading on the Over the
Counter Bulletin Board System.
3.4 No Covenant as to Tax Consequences
It is expressly understood and agreed that neither Purchaser nor its officers or
agents has made any warranty or agreement, expressed or implied, as to the tax
consequences of the transactions contemplated by this agreement or the tax
consequences of any action pursuant to or growing out of this agreement.
3.5 Disclosure
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No representation or warranty by Purchaser in this Agreement, nor any document,
written information, statement or certificate furnished or to be furnished by
Purchaser to Company pursuant hereto or in connection with the transactions
contemplated hereby, contains or will contain any untrue statement of a material
fact, or omits or will omit to state a material fact necessary to make the
statements contained herein or therein not misleading. Purchaser's Form 10-K for
the year ended December 31, 1999, and its Form 10-Q for the quarter ended June
30, 2000, copies of which have been furnished to the Company and its
Shareholders, are materially true and correct as of the date of the filing and
do not fail to state any material fact with respect to Purchaser which is
required to be stated under the rules of the Securities and Exchange Commission.
Since the date the Form 10-Q and Form 10-K referred to above were filed, there
have been no material changes in the information contained in Purchaser's Form
10-K or Form 10-Q or in material facts which would have been included in
Purchaser's Form 10-Q or Form 10-K if the facts would have existed or been known
by Purchaser on the date of filing, and which have not been disclosed by
Purchaser in other public filings made with the Securities and Exchange
commission since the dates the Form 10-K and Form 10-Q referred to above were
filed.
3.6 No Brokers
Purchaser has not engaged or otherwise used the services of any broker or finder
in connection with the Agreement or the transactions contemplated hereby and
Purchaser agrees to indemnify and hold harmless Company from and against any
liability for any fee, compensation, commission or expense (including attorneys'
fees) arising out of any claim by any person acting or claiming to act on behalf
of Purchaser for fees, compensation, commission or expense with respect to the
Agreement or the transactions contemplated hereby.
4. Covenants of Shareholders and Company
Shareholders and Company covenant and agree as follows:
4.1 Documents To Be Furnished
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Within ten days from the date of this agreement Company will furnish to
Purchaser the following documents, lists and schedules certified by a principal
officer of Company as being accurate and complete:
(a) A list of the states of incorporation and states qualified to do
business of Company;
(b) A list of the authorized and outstanding securities of Company;
(c) A list of the officers, directors and Shareholders of Company;
(d) Copies of the articles of incorporation and bylaws currently in
effect of Company;
(e) A list of the legal descriptions of all real property owned of
record or beneficially, or held under lease, or option, or similar agreements by
Company;
(f) Copies of all surveys and policies of title insurance relating to
real property owned by Company;
(g) Copies of all leases to which Company is a party;
(h) Copies of all contracts, agreements or commitments of Company,
whether involving purchases, sales or otherwise, which expire more than one year
from the date of this agreement or which involve an amount or value in excess of
$25,000;
(i) Copies of all collective bargaining or other union contracts to
which Company is a party;
(j) Copies of all employment contracts to which Company is a party;
(k) Copies of all pension, retirement and profit sharing plans to which
Company is a party;
(l) A list of all fringe benefit plans and programs applying to
employees of Company, including but not limited to, pension, profit sharing,
life insurance, medical, bonus, incentive and similar plans and the approximate
annual cost of each;
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(m) A list of all employees of Company and the current salaries,
bonuses, commissions, etc. of each;
(n) A list of all letters patent, patent applications, inventions upon
which patent applications have not yet been filed, trade names, trademarks,
trademark registrations and applications, copyrights, copyright registrations,
both domestic and foreign presently owned by Company, together with the
corporate owner;
(o) Any agreements to which Company is a party with respect to any
letters patent, patent applications, inventions upon which patent applications
have not yet been filed, trade names, trademarks, trademark registrations and
applications, copyrights and copyright registrations;
(p) A list by major product lines of all distributors and dealers for
Company, together with representative copies of franchise agreements,
distribution contracts and policy statements with a description of substantial
modifications or exceptions;
(q) Copies of all financing or loan agreements, mortgages or similar
agreements to which Company is a party;
(r) A list of all Company's bank accounts, brokerage accounts, safety
deposit boxes, with the authorized signers indicated;
(s) Copies of all powers of attorney granted by Company;
(t) A list of each insurance policy owned by Company, with the name of
the insurance carrier, the policy number, a brief description of the coverage,
the annual premium, the corporate owner and any claims pending;
(u) Sales for the last three (3) fiscal years made to the largest
customers of Company;
(v) Purchases from any vendor during the last three (3) fiscal years who
accounted for over 10 percent of the purchases made by Company; and
(w) All sales commissions paid any individual or entity of more than
$10,000 during the last three years and a description of the present basis of
paying sales commissions.
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4.2 Actions Prior to Closing
From and after the date of this agreement and until the closing date:
(a) Purchaser and its authorized representatives shall have full access
during normal business hours to all properties, books, records, contracts and
documents of Company, and Company shall furnish or cause to be furnished to
Purchaser and its authorized representatives all information with respect to its
affairs and business of Company as Purchaser may reasonably request.
(b) Except with the prior written consent of Purchaser, Company shall
carry on its business diligently and substantially in the same manner as before.
(c) Without the prior written consent of Purchaser, Company will not
grant any general or uniform increase in the rates of pay of its employees, nor
grant any general or uniform increase in the benefits under any pension plan or
other contract or commitment, nor increase the compensation payable or to become
payable to officers or key salaried employees, insurance, pension or other
benefit plan, payment or arrangement made to, for or with any of the officers,
key salaried employees or agents.
(d) Company shall not enter into any contract or commitment or engage in
any transaction not in the usual and ordinary course of business and consistent
with Company's business practices without the prior written consent of
Purchaser.
(e) Company shall not create any indebtedness other than that incurred
in the usual and ordinary course of business, that incurred pursuant to existing
contracts disclosed in the exhibits submitted, and that reasonably incurred in
doing the acts and things contemplated by this agreement.
(f) Company shall not declare or pay any dividend or make any
distribution in respect of its capital stock; shall not directly or indirectly
redeem, purchase or otherwise acquire any of its own stock; shall not grant any
stock options; and shall not issue or in any way dispose of any shares of its
own stock, except as approved by the in advance in writing by Purchaser.
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(g) Company shall not amend their certificates of incorporation or
bylaws or make any changes in authorized or issued capital stock without the
prior written consent of Purchaser.
(h) Company shall maintain current insurance and any additional
insurance in effect as may be reasonably required by increased business and
risks; and all property shall be used, operated, maintained and repaired in a
normal business manner.
(i) Company shall use its best efforts (without making any commitments
on behalf of Purchaser) to preserve its business organization intact, to keep
available to Purchaser the present key officers and employees of Company, and to
preserve for Purchaser the present relationships of Company with its suppliers
and customers and others having business relations with it.
(j) Company shall not do any act or omit to do any act, or permit any
act or omission to act, which will cause a material breach of any material
contract, commitment or obligation of Company.
(k) Company shall duly comply with all applicable laws as may be
required for the valid and effective transfer of property, assets and business
contemplated by this agreement, except that Purchaser waives compliance with the
provisions of any bulk sales act.
(l) Company shall not sell or dispose of any property or assets except
products sold in the ordinary course of business.
(m) Company shall promptly notify Purchaser of any lawsuits, claims,
proceedings or investigations that may be threatened, brought, asserted or
commenced against it, its officers or directors involving in any way the
business, properties or assets of Company.
(n) Company will provide Purchaser with interim monthly financial
statements and any other management reports as and when they are available.
5. Conditions Precedent to Purchaser's Obligations
Each and every obligation of Purchaser to be performed on the closing date shall
be subject to the prior satisfaction of the following conditions:
19
5.1 Truth of Representations and Warranties
The representations and warranties made by Shareholders in this Agreement or
given on its behalf shall be substantially accurate in all material respects on
and as of the closing date with the same effect as though the representations
and warranties had been made or given on and as of the closing date.
5.2 Compliance With Covenants
Shareholders shall have performed and complied with all their obligations under
this agreement which are to be performed or complied with by them prior to or on
the closing date including the delivery of its documents specified in
subparagraph 4.1 and the closing documents specified in subparagraph 12.2.
5.3 Absence of Suit
No suit or proceeding shall be threatened or pending in which it will be or it
is sought, by anyone, to restrain, prohibit, challenge or obtain damages or
other relief in connection with this agreement or the consummation of the
transactions contemplated, or in connection with any material claim against
Company not disclosed or in the exhibits.
5.4 No Material Adverse Change
As of the closing date there shall not have occurred any material adverse change
that materially impairs the ability of Company to conduct its business or the
earning power on the same basis as in the past.
5.5 Accuracy of Financial Statements
Purchaser and its representatives shall be satisfied as to the substantial
accuracy of all balance sheets, statements of income and other financial
statements of Company furnished to Purchaser.
5.6 Approval of Purchaser's Board of Directors
20
The board of directors of Purchaser shall have approved this agreement.
5.7 Listing of Shares
The shares of Purchaser's common stock to be issued pursuant to this agreement
shall have been duly listed, or listed subject to official notice of issuance,
upon the Over the Counter Bulletin Board System.
5.8 Time Limit on Closing
Closing shall have taken place by October 10, 2000.
5.9 Legal Opinion
Purchaser shall have received an opinion of counsel for Company referred to in
subparagraph 12.2(d).
6. Conditions Precedent to Shareholders' Obligations
Each and every obligation of Shareholders to be performed on the closing date
shall be subject to the prior satisfaction of the following conditions:
6.1 Listing of Shares
The Purchaser's common stock to be delivered shall have been listed, or listed
subject to official notice of issuance upon the Over the Counter Bulletin Board
System.
6.2 Truth of Representations and Warranties
Purchaser's representations and warranties contained in this agreement shall be
true at and as of the closing date as though the representations and warranties
were made at and as of the transfer date.
6.3 Purchaser's Compliance With Covenants
Purchaser shall have performed and complied with its obligations under this
agreement which are to be performed or complied with by it prior to or on the
closing date.
6.4 Time Limit on Closing
21
Closing shall have taken place by October 10, 2000. 7. Limitation on Survival
and Effect of Certain Warranties, Representations and Covenants.
All statements contained in any certificate, instrument or document delivered by
or on behalf of any of the parties pursuant to this agreement and the
transactions contemplated shall be deemed representations and warranties by the
respective parties.
7.1 Shareholders' Obligations
The representations and warranties and covenants of Shareholders contained in
this agreement shall survive the closing date, and any investigation made by
Purchaser or its agents, and all representations, warranties and covenants
surviving shall be deemed several.
7.2 Purchaser's Obligations
The representations, warranties and covenants of Purchaser contained in this
agreement shall survive the closing date.
8. Indemnification
8.1 Requirement of Indemnification
Shareholders shall indemnify Purchaser for any loss, cost, expense or other
damage suffered by Purchaser resulting from, arising out of, or incurred with
respect to the falsity or the breach of any representation, warranty or covenant
made by Shareholders. Without limiting the generality of the above, Purchaser
shall be deemed to suffer loss, costs, expense or other damage if Company
suffers loss, costs, expense or other damage.
8.2 Notice
Purchaser shall assert any right to indemnification by furnishing Shareholders,
or any other person as may be designated in writing by Shareholders, with a
written notice and list of charges detailed by item showing the nature of any
breach of any representation, warranty or covenant, date of payment or assertion
of claim, summary of settlement or litigation procedures, and the amount of the
loss, cost or expense. If the right to indemnification is based on a claim of a
third party, Purchaser shall give the notice within 120 days after
22
Purchaser has notice of any claim and Shareholders shall have the right to
contest any such claim by a third party but all expenses of the contest shall be
borne by Shareholders.
8.3 Resolution of Claim
Except in the event that the claim for indemnification is based upon a claim of
a third party and Shareholders shall have notified Purchaser as provided in
paragraph 8.2 that they will contest the claim, unless Shareholders object to
the determination or computation of the total amount of the indemnification
shown on the written notice specified in subparagraph 8.2 within 60 days after
receipt, the total amount of indemnification shown by notice shall be paid by
Shareholders to Purchaser. If Shareholders object to the determination contained
in the written notice specified in subparagraph 8.2 within 60 days after
receipt, they shall have the right to submit any claim for indemnification not
brought by a third party to the American Arbitration Association for binding
arbitration in accordance with its rules, and the expenses of the American
Arbitration Association shall be borne equally by the parties.
8.4 Effect of Taxes
The determination of any loss, cost or expense shall take into account any tax
benefit derived by Purchaser or any affiliated companies. To the extent that any
deficiency for federal income taxes which may be established against Company for
any year ended on or prior to December 31, 1999, is occasioned by a
determination by the Internal Revenue Service that any increase in income for
the year gives rise to a deduction or deductions from ordinary income in the
aggregate amount of Company for a subsequent taxable year or years, this
deficiency shall be assumed by Purchaser and shall not be a breach of any of
Shareholders' warranties, representations and covenants in this agreement.
8.5 Time Limit on Indemnification
No claim for indemnification may be asserted by Purchaser after December 31,
2000, except for (i) income taxes for any period ending on or prior to December
31, 2000, which may be asserted at any time the Internal Revenue Service may
still assert a deficiency and (ii) claims arising out of a representation,
warranty or covenant that a
23
Shareholder knew at the date of this agreement was false or breached or which
arises out of a claim later known to a Shareholder which Shareholder failed to
disclose to an officer of Purchaser prior to December 31, 2000.
8.6 Amount Limit on Indemnification
Notwithstanding any other provision to the contrary, Shareholders shall not be
charged with any loss, cost or expense that in the aggregate does not exceed
$10,000. Other than indemnification for taxes that were delinquent and unpaid at
the closing, Shareholder's liability to Purchaser for indemnification or for
breach of any representation or warranty made in this agreement shall be
satisfied only by reducing the number of shares of Purchaser received in
connection with the reorganization provided for in this Plan of Reorganization
and Agreement.
9. Covenant Not To Compete
By execution, each Shareholder agrees that for a period of five (5) years from
the closing date he or she will not either directly or indirectly own, have a
proprietary interest (except for less than five percent (5%) of any listed
Company or Company traded in the over-the-counter market) of any kind in, be
employed by, or serve as a consultant to or in any other capacity for any firm,
other than Purchaser and its subsidiaries, engage in the distribution of
computer products and/or consumer electronics, or other products presently
distributed by Company, in the area where it is presently engaged in business
without the express written permission of Purchaser. Each Shareholder agrees
that compliance with the agreement contained in this paragraph is necessary to
protect the goodwill and other proprietary interest of Company and that a breach
of this agreement will result in irreparable and continuing damage to Purchaser
for which there will be no adequate remedy at law and in the event of any breach
Purchaser shall be entitled to injunctive and other and further relief including
damages as may be proper.
10. Securities Act Provisions
24
10.1 Restrictions on Disposition of Shares
Shareholders covenant and warrant that the shares of common stock of Purchaser
to be received by them pursuant to this agreement are being acquired for their
own account and for investment and not with the present view toward sale or
distribution and will not be disposed of except (i) pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or (ii) any
other transaction which, in the opinion of counsel acceptable to Purchaser, is
exempt from registration under the Securities Act of 1933, as amended, or the
rules and regulations of the Securities and Exchange Commission. In order to
effectuate the covenants of this subparagraph 10.1, an appropriate endorsement
will be placed on the certificates for shares of common stock of Purchaser
delivered to Shareholders pursuant to this agreement and stop transfer
instructions shall be placed with the transfer agent for the securities.
10.2 Evidence of Compliance With Private Offering Exemption
Shareholders agree to supply Purchaser with evidence of the financial
sophistication of the Shareholders, or evidence of appointment of a
sophisticated investment representative, and any other items that counsel for
Purchaser may require in order to evidence the private offering character of the
distribution of shares made pursuant to this agreement.
10.3 Notice of Limitation on Distribution
Each Shareholder is aware that the shares distributed will not have been
registered pursuant to the Securities Act of 1933, as amended; and, therefore,
under current interpretations and applicable rules, he or she will probably have
to retain the shares for a period of at least two years and at the expiration of
the two year period sales may be confined to brokerage transactions of limited
amounts requiring certain notification filings with the Securities and Exchange
Commission and the disposition may be available only if the Purchaser is current
in his or her filings with the Securities and Exchange Commission; and the
Shareholders are aware of Rule 144 issued by the Securities and Exchange
Commission under the Securities Act of 1933, as amended, and the other
limitations imposed on their disposition of Purchaser's shares.
25
10.4 Registration Rights and Restrictions
Purchaser agrees at its own expense to prepare and to file with the Securities
and Exchange Commission ("SEC") as soon as reasonably practicable after the
closing date one registration statement under the Securities Act of 1933, as
amended, with respect to 350,000 of the shares of common stock of Purchaser
received by the Shareholder, and will use its best efforts to cause the
registration statement to become effective. Purchaser will, furthermore, at its
own expense, use its best efforts to keep the registration statement current, in
accordance with the rules and regulations of the SEC for the period ending upon
a date two years subsequent to the closing date or 30 days after the
effectiveness, whichever occurs later.
Purchaser further agrees that the only shares which it will register in any
registration statement under the Securities Act of 1933, as amended, between the
execution of this agreement and March 16, 2001 are the 350,000 described in the
paragraph immediately above as well as any others that which may currently carry
registration rights, and the 2,000,000 shares underlying the employee stock
option plan. Purchaser specifically acknowledges that the only such shares of
which it is aware are 1,931,000 shares held by various investors from
Purchaser's March 2000 private placement, 1,091,320 shares held by Xxxxxxx
Xxxxxxxx Cie, and the shares underlying 289,650 warrants issued as part of the
Purchaser's March 2000 private placement. Purchaser further agrees that in any
registration statements filed by Purchaser after March 16, 2001, the shares of
the Shareholders in the Purchaser which remain unregistered shall be registered
in equal proportion to those registered in such registration statement on behalf
of the largest shareholder registering shares in such registration statement.
10.5 Payment of Expenses
In the event of a registration under this Section 10, Shareholders shall pay and
bear the direct selling fees, disbursements and expenses, including without
limitation all underwriters' discounts, commissions and expenses, but no other
cost of registration.
11. Profit Sharing Plan and Other Employee Benefit Plans
26
Purchaser shall before and after the closing take all actions which may be
necessary, convenient or appropriate in the opinion of Purchaser to transfer to
Purchaser all the rights and to cause Purchaser to assume all the liabilities of
Company under its profit sharing plan and trust (including the adoption of
amendments to the plan and trust and such action as may be necessary to secure
approvals of the Internal Revenue Service which may be required or deemed
advisable), to the end that the plan may be integrated into Company's profit
sharing plan treating employment with Company as employment with Purchaser under
its plans and preserving the benefits previously accrued to Company's employees.
All other employee benefit plans of Company, including but not limited to health
and accident insurance, major medical insurance, sick pay plans, noninsured
maternity benefits, group life insurance, and other employee fringe benefits,
shall be continued by Purchaser subject to the same rights of termination
available to Company.
12. Closing
12.1 Time and Place
The closing of this transaction ("closing") shall take place at the offices of
xXxxxxx.xxx, Inc. in Los Angeles, California, at 4 pm. on October 10, 2000, or
at any other time and place as the parties shall agree upon. This date is
referred to in this agreement as the "closing date."
12.2 Documents To Be Delivered by Shareholders
At the closing, Shareholders shall deliver to Purchaser the following documents:
(a) Certificates for 10,000 shares of Company's common stock in the
manner and form required by subparagraph 1.1;
(b) The minute book, stock transfer book, all books of account, records,
contracts, tax returns and other documents of Company as Purchaser may request
in writing;
(c) Written resignations effective on the closing date of all directors
and officers of Company except those designated by Purchaser;
27
(d) A general release, in form and substance satisfactory to Purchaser
and its counsel, of all claims Shareholders may have to the date of closing
against any of Company and the directors, officers, agents and employees of
Company except as may be expressed in written contract and expressly described
and excepted in the release;
(e) Certificates signed by the Shareholders that the representations and
warranties made by the Shareholders in this agreement are substantially accurate
in all material respects on and as of the closing date with the same effect as
though the representations and warranties had been made on or given on and as of
the closing date and that Shareholders have performed and complied with all
their obligations under this agreement which are to be performed or complied
with by or prior to or on the closing date;
(f) A written opinion from counsel for Shareholders stated as of the
closing date addressed to the Purchaser satisfactory in form and substance to
the Purchaser to the effect that:
(i) Ownership of the Company's common stock is as stated in subparagraph
2.1;
(ii) The corporate existence and good standing, qualification of Company
and authorized and issued stock of Company is as stated in subparagraph 2.2;
(iii) This agreement has been duly executed and duly delivered by each
Shareholder and constitutes a legal, valid and binding obligation of each
Shareholder enforceable in accordance with its terms;
and
(g) Certificates or letters from each Shareholder evidencing the taking
of shares in accordance with the provisions of paragraph 10 and their
understanding of the restrictions;
(h) Any other documents of transfer, certificates of authority, and
other documents as Purchaser may reasonably request.
12.3 Documents To Be Delivered by Purchaser
At the closing Purchaser shall deliver to Shareholders the following documents:
28
(a) Instructions to Corporate Stock Transfer to issue and deliver
certificates for the number of shares of Purchaser's common stock as determined
in subparagraph 1.2. These shares are to be registered in the name and
denominations as Shareholders may specify.
(b) A written opinion of counsel for Purchaser dated as of the closing
date, addressed to the Shareholders and satisfactory in form and substance to
counsel for Shareholders, to the effect that:
(i) Purchaser's corporate existence and good standing are as set forth
in subparagraph 3.1;
(ii) This agreement has been duly authorized, executed and delivered by
Purchaser and is a valid and legally binding obligation of Purchaser enforceable
in accordance with its terms; and
(iii) Purchaser has taken the corporate action necessary to authorize
the performance of the obligations imposed upon it by this agreement.
(c) A certified copy of the duly adopted resolutions of Purchaser's
board of directors or executive committee authorizing or ratifying the
execution, delivery and performance of this agreement and authorizing or
ratifying the acts of its officers and employees in carrying out its terms and
provisions.
13. Release of Personal Liability
Shareholders have executed instruments by which they have personally guarantied
payment of Company's indebtedness to Finova. Within thirty (30) days after the
closing, Purchaser will cause Shareholders to be released from liability to
Finova for any indebtedness of Company or Purchaser, whether incurred prior to
or after the Closing.
14. Arbitration
In the event of any dispute between Purchaser and one or more of the
Shareholders, the dispute shall be determined by binding arbitration conducted
in Los Angeles County, California before an arbitrator who is a retired judge of
the Superior Court. The arbitration shall be conducted in accordance with Code
of Civil Procedure Sec. 1280, et. Seq., and the parties shall have discovery
rights in the arbitration,
29
but with a view toward prompt and economical dispute resolution. Costs of
arbitration shall be shared equally.
15. Law Governing
This agreement may not be modified or terminated orally, and shall be construed
and interpreted according to the laws of the State of California.
16. Assignment
Any party without the written consent of the others shall not assign this
agreement.
17. Amendment and Modification
Purchaser and Shareholders may amend, modify and supplement this agreement in
any manner as may be agreed upon by them in writing.
18. Termination and Abandonment
18.1 This Agreement may be terminated and the transaction provided for
by this agreement may be abandoned without liability on the part of any party to
any other, at any time before the closing date:
(a) By mutual consent of Purchaser and Shareholders;
(b) By Purchaser:
(i) If any of the conditions provided for in paragraph 6 of this
agreement have not been met and have not been waived in writing by Purchaser; or
(c) By Shareholders:
(i) If any of the conditions provided for in paragraph 7 of this
agreement have not been met and have not been waived in writing by Shareholders.
18.2 In the event of termination and abandonment by any party as
provided above in this paragraph 16, written notice shall be given to the other
party, and each party shall pay its own expenses incident to
30
preparation for the consummation of this agreement and the transactions
contemplated.
19. Notices
All notices, requests, demands and other communications shall be deemed to have
been duly given, if delivered by hand or mailed, certified or registered mail
with postage prepaid:
(a) If to Shareholders to:
Xxxxxx Eshgieh
0000 Xxxxxx Xxxxx
Xxx Xxxxxxx, XX 00000 and
Xxxxxx Xxxxxx
000 00xx Xxxxxx
Xxxxx Xxxxxx, XX and
Xxxxxxx Xxxx
c/o Xxxxxx Eshgieh
With copy to:
Xxxx X. Xxxxx, Esq.
Xxxx, Xxxxxx & Xxxxx, LLP
00000 Xxxxxxxx Xxxx. Xxxxx 0000
Xxx Xxxxxxx, Xx, 00000
or to such other person and place as Shareholders shall have specified
to Purchaser in writing; or
(b) If to Purchaser, to:
Xxxxxx Xxxxxxx
xXxxxxx.xxx, Inc.
00000 Xxxxx Xxxxxx Xxxx., Xxxxx 000
Xxx Xxxxxxx, XX ______
or to such other person and place as Purchaser shall have specified to
Shareholders in writing.
20. Announcements
Announcements concerning the transactions provided for in this agreement by
either Shareholders or Purchaser shall be subject to the approval of the other
in all essential respects, except that Shareholders' approval of form shall not
be required as to any statements and other information which Purchaser may
submit to the
31
Securities and Exchange Commission, or Purchaser's Shareholders or be required
to make pursuant to any rule or regulation of the Securities and Exchange
Commission.
21. Entire Agreement
This instrument embodies the entire agreement between the parties with respect
to the transactions contemplated, and there have been and are no agreements,
representations or warranties between the parties other than those set forth or
provided for.
22. Counterparts
This agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original but all of which together shall constitute
one and the same instrument.
23. Headings
The headings in the paragraphs of this agreement are inserted for convenience
only and shall not constitute a part of the agreement.
24. Further Documents
Purchaser and Shareholders agree to execute any and all other documents, and to
take any other action or corporate proceedings that may be necessary or
desirable to carry out the terms of this agreement.
In witness of, the parties have caused this agreement to be duly executed all as
of the day and year first written above.
XXxxxxx.xxx, Inc. Continental Computer Exchange, Inc.
/s/ Xxxx Xxxxxxxx /s/ Xxxxxx Eshgieh
------------------------------------ ------------------------------------
Name: Xxxx Xxxxxxxx Name: Xxxxxx Eshgieh
Title: CEO Title: President
Shareholders
/s/ Xxxxxx Xxxxxx
32
------------------------------------
Xxxxxx Xxxxxx
/s/ Xxxxxx Eshgieh
------------------------------------
Xxxxxx Eshgieh
/s/ Xxxxxxx Xxxx
------------------------------------
Xxxxxxx Xxxx
Schedule 1.1
The number of the issued and outstanding shares of the Company's common stock:
10,000
Schedule 1.2
The number of shares of Purchaser's common stock to be delivered:
Xxxxxx Xxxxxx 283,333 1/3
Xxxxxx Eshgieh 283,333 1/3
Xxxxxxx Xxxx 283,333 1/3
Schedule 2.5(a)
Liabilities of Continental Computer Exchange, Inc., whether accrued, absolute,
contingent or otherwise, which arose or relate to any transaction of Company,
its agents or servants occurring prior to August 31, 2000, which are not
disclosed by or reflected in the financial statements:
None
Liabilities of Continental Computer Exchange, Inc. which have arisen or relate
to any transaction of Company, their agents or servants,
33
occurring since August 31, 2000, other than normal liabilities incurred in the
normal conduct of Company's business:
None
Known circumstances, conditions, happenings, events or arrangements, contractual
or otherwise, which may give rise to liabilities, except in the normal course of
Company's business:
None
Schedule 2.5(d)
Notice of any claimed violation of any, applicable federal, state, county and
local laws, ordinances or regulations, including those applicable to
discrimination in employment, pollution and safety:
None
Schedule 2.5(e)
Legal, administrative or other proceedings, proceedings, investigations or
inquiries, product liability or other claims, judgments, injunctions or
restrictions:
None
Schedule 2.6
(i) all of the Continental Computer Exchange, Inc.'s registrations
of trademarks and of other marks, trade names or other trade
rights, and all pending applications for any such registrations:
None
(ii) all of the Continental Computer Exchange, Inc.'s patents and
copyrights and all pending applications:
None
(iii) all other trademarks and other marks, trade names and other
trade rights of the Continental Computer Exchange, Inc.:
34
None
Schedule 2.7
(i) Any Facilities and/or Former Facilities are , and at all times have
been, and all Former Facilities were at all times when owned, leased or operated
by the Company owned, leased and operated in compliance with all Environmental
Laws, except:
None
(ii) Any Substance being used, generated, treated, stored, transported,
disposed of or otherwise existing on, under, about or from any Facility:
None
(iii) The Company has, and at all times has had, all permits required
under all applicable Environmental Laws and is, and at all times has been, in
compliance with all such permits except:
None
(iv) Any application for issuance, renewal, transfer or extension of, or
any other administrative action regarding, any environmental permit required for
the consummation of the transactions contemplated by this Agreement:
None
(v) Any Substance that the Company has at any time used, generated,
treated, stored, transported, disposed of or otherwise handled not in compliance
with any Environmental Laws:
None
(vi) There is not now and has not been at any time in the past any
underground storage tank or pipeline at any Facility or Former Facility where
the installation, use, maintenance, repair, testing, shut-in or removal of such
tank or pipeline was not in compliance with all Environmental Laws and there has
been no spill, leakage or other Release from or rupture of any such tank or
pipeline except:
35
None
(vii) The Company has not received any notice that it is or was claimed
to be in violation of or noncompliance with any Environmental Law, nor is there
any pending or threatened suit, action, claim or proceeding against the Company
under any Environmental Law or with respect to any spill, discharge, Release or
mishandling of any Substance except:
None
Schedule 2.7 (continued)
(viii) Any consent decrees or agreements with, or liens by, any
governmental authority or quasi-governmental entity relating to any
Environmental Law that bind or affect the Company or any Facility:
None
(ix) Any current or past use, generation, treatment, transportation,
storage or disposal practice of the Company that resulted, or will result, in
any liability under the Comprehensive Environmental Response, Compensation and
Liability Act or any state law of similar effect:
None
(x) Any spill, discharge or other Release of any Substance on, under,
about or from any Facility or Former Facility:
None
(xi) Any written reports of all environmental audits or assessments that
have been conducted at any Facility or Former Facility within the past five (5)
years, either by the Company or attorney or environmental consultant or engineer
engaged for such purpose:
None
(xii) Any lease or other contract (excluding insurance policies
disclosed elsewhere in this Agreement) to which the Company is not a party,
whether as a direct signatory or as a successor, assign or third party
beneficiary, or otherwise bound and under which the Company is
36
obligated by or entitled to the benefits of, directly or indirectly, any
representation, warranty, indemnification, covenant, restriction or other
undertaking concerning environmental conditions:
None
(xiii) The Company has not released any other person from claims under
any Environmental Law or has waived any rights concerning any other
environmental condition except:
None
(xiv) The Company has given all notices and warnings, made all reports,
and has kept and maintained all records required by and in compliance with all
Environmental Laws except:
None
Schedule 2.7 (continued)
(xv) Any filing by the Company under any state environmental clean-up
responsibility act or any other state law of similar effect:
None
Schedule 2.8
(i) Each "employee pension benefit plan" ("Business Pension Plans"):
None
(ii) Each "employee welfare benefit plan" ("Business Welfare Plans"),
as such terms are defined in Section 3 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
including plans otherwise excluded from the operation of ERISA
by Section 4(b)(4) or 4(b)(5) thereof, maintained or contributed
to by Company or any Subsidiary for or on behalf of employees,
or to which any employee contributes on account of his
employment (such Business
37
Pension Plans and Business Welfare Plans are hereinafter
collectively referred to as "Business Plans"):
None
(iii) Each plan, salary practice or arrangement, including bonus,
incentive compensation, stock option, stock purchase, sick pay,
vacation pay, severance pay or other fringe benefit plan or
program, whether formal or informal, which is not a Business
Plan, which is applicable to any employee:
(a) At will employment at monthly salary or hourly wage
(b) Sales commissions
(c) Industry standard sick pay, vacation pay and medical
benefits
(iv) Any Business Plan subject to Title IV of ERISA (other than
"multi-employer plans" (as defined in Section 3(37) of ERISA))
has been completely or partially terminated, nor has there been
a "reportable event," as such term is defined in Section 4043(b)
of ERISA, with respect to any such plan, except as may occur as
a result of this Agreement:
None
Schedule 2.11
All obligations of any Shareholder (or any person who would be an heir or
descendant if he or she were not living or his or her spouse), or any entity in
which he or she has any interest (except through ownership of securities listed
on a national securities exchange):
Obligations of Fantom Drive through the ownership of the Shareholders or
their spouses
Exhibit A
Subsidiaries of Continental Computer Exchange, Inc.
None
