<PAGE>
UNITED STATES SECURITIES & EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from __________ to ________
Commission File Number 000-21729
APPLIED INTELLIGENCE GROUP, INC.
(Exact name of registrant as specified in its charter)
Oklahoma 73-1247666
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
13800 Benson Road
Edmond, Oklahoma 73013
(Address of principal executive offices)
(405) 936-2300
Registrant's telephone number, including area code
Check whether the Registrant(1) filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act
during the past 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.
Yes X No __
As of August 12, 1997 there were 2,727,434 outstanding
shares of Common Stock, par value $.001 per share.
Transitional Small Business Disclosure Format: Yes ___ No X
<PAGE>
APPLIED INTELLIGENCE GROUP, INC.
FORM 10-QSB
TABLE OF CONTENTS
PART I - CONSOLIDATED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
<S> <C>
Page
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets (unaudited) as of June 30,
1997 and December 31, 1996 3
Consolidated Statements of Operations (unaudited) for
the three months ended June 30, 1997 and 1996 4
Consolidated Statements of Operations (unaudited) for
the six months ended June 30, 1997 and 1996 5
Consolidated Statement of Stockholders' Equity
(unaudited)for the six months ended June 30,1997 6
Consolidated Statements of Cash Flows (unaudited) for the
six months ended June 30, 1997 and 1996 7
Notes to Consolidated Financial Statements (unaudited) -
June 30, 1997 8
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8
PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS 18
Item 2. CHANGES IN SECURITIES 18
Item 3. DEFAULTS UPON SENIOR SECURITIES 18
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY
HOLDERS 18
Item 5. OTHER INFORMATION 18
Item 6. EXHIBITS AND REPORTS ON FORM 8-K 19
Signatures 20
</TABLE>
<PAGE>
PART I - CONSOLIDATED FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
APPLIED INTELLIGENCE GROUP, INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
ASSETS June 30, December
1997 31, 1996
---------- ----------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 830,487 $1,821,014
Accounts receivable-trade, net of allowance
for doubtful accounts of $4,036 at June 30,
1997 and $5,631 December 31, 1996 1,416,919 2,009,837
Other receivables 256,429 314,874
Inventory 11,338 28,159
Prepaid expenses 155,630 76,264
---------- ----------
Total current assets 2,670,803 4,250,148
Furniture, equipment & leasehold improvements, net 1,705,737 1,632,147
Software development costs, net 1,436,289 1,308,099
Deferred tax asset 389,158 -
Other assets 164,462 117,141
---------- ----------
Total assets $6,366,449 $7,307,535
========== ==========
LIABILITIES AND STOCKHOLDERS'EQUITY
Current liabilities:
Book overdraft $ 29,143 $ 284,760
Accounts payable and accrued liabilities 1,145,145 1,078,506
Deferred revenue 368,177 332,449
Current portion of notes payable to shareholders 185,375 107,375
Current portion of capital lease obligation 141,899 135,151
Bank line of credit payable 267,000 -
---------- ----------
Total current liabilities 2,136,739 1,938,241
Capital lease obligations, net of current portion 104,413 176,618
Notes payable to shareholders, net of
current portion 291,000 389,000
Deferred income taxes - 62,687
---------- ----------
Total liabilities 2,532,152 2,566,546
Stockholders' equity:
Common stock, $.001 par value;
30,000,000 shares authorized; 2,727,434 and
2,726,500 shares issued and outstanding at
June 30, 1997 and December 31, 1996 2,727 2,727
Additional paid-in capital 4,492,807 4,491,226
Retained earnings (deficit) (661,237) 247,036
---------- ----------
Total stockholders' equity 3,834,297 4,740,989
---------- ----------
Total liabilities and stockholders' equity $6,366,449 $7,307,535
========== ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
APPLIED INTELLIGENCE GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Three Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Revenues $2,089,517 $3,008,467
Expenses:
Direct cost of sales 502,550 1,239,586
Salaries and benefits 1,540,677 1,238,339
Selling, general and
administrative 666,991 510,787
Interest expense, net 24,537 67,867
Depreciation and amortization 216,210 119,191
---------- ----------
Total expenses 2,950,965 3,175,770
---------- ----------
Loss before income taxes (861,448) (167,303)
Benefit for income taxes (262,350) (63,576)
---------- ----------
Net loss $ (599,098) $ (103,727)
========== ==========
Net loss per common share $ (0.22) $ (0.06)
========== ==========
Weighted average common share
equivalents outstanding 2,726,949 1,755,628
========== ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
APPLIED INTELLIGENCE GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the Six Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Revenues $3,925,936 $5,366,754
Expenses:
Direct cost of sales 691,045 1,660,320
Salaries and benefits 2,915,294 2,468,920
Selling, general and
administrative 1,253,881 1,001,737
Interest expense, net 30,102 112,954
Depreciation and amortization 395,732 259,106
---------- ----------
Total expenses 5,286,054 5,503,037
---------- ----------
Loss before income taxes (1,360,118) (136,283)
Benefit for income taxes (451,845) (51,788)
---------- ----------
Net loss $ (908,273) $ (84,495)
========== ==========
Net loss per common share $ (.33) $ (.05)
========== ==========
Weighted average common share
equivalents outstanding 2,726,947 1,755,628
========== ==========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
APPLIED INTELLIGENCE GROUP, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(Unaudited)
For the Six Months Ended June 30, 1997
<TABLE>
<CAPTION>
Additional Retained
Common Stock Paid-in Earnings
Shares Amount Capital (Deficit)
--------- ------- ---------- ----------
<S> <C> <C> <C> <C>
Balance, December 31, 1996 2,726,500 $ 2,727 $4,491,226 $247,036
Exercise of stock options 444 - 279 -
Stock issued under Employee
Stock Purchase Plan 490 - 1,302 -
Net loss - - - (908,273)
--------- ------- ---------- ---------
Balance, June 30, 1997 2,727,434 $ 2,727 $4,492,807 $ (661,237)
========= ======= ========== =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
APPLIED INTELLIGENCE GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the Six Months Ended June 30, 1997 and 1996
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (908,273) $ (84,495)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities:
Depreciation and amortization 395,732 259,106
Deferred income tax benefit (451,845) (51,788)
Decrease (increase) in accounts receivable 592,918 (139,856)
Decrease in other receivables 58,445 4,959
Decrease (increase) in inventory 16,821 (63,569)
Increase in prepaid expenses (79,366) (8,352)
Increase in other assets (47,321) (46,089)
Decrease in accounts payable and
accrued liabilities 66,639 921,474
Increase (decrease) in deferred revenue 35,728 (23,352)
---------- -----------
Net cash provided by (used in)operating activities (320,522) 768,038
Cash flows from investing activities:
Capital expenditures (326,322) (319,450)
Capitalized expenditures for software
development (271,190) (326,098)
---------- -----------
Net cash used in investing activities (597,512) (645,548)
Cash flows from financing activities:
Decrease (increase) in book overdraft (255,617) 19,119
Increase in deferred offering costs - (120,990)
Proceeds from bank borrowings 392,000 2,844,000
Proceeds from exercise of stock options 279 -
Proceeds from employee stock purchase plan 1,302 -
Payments of capital lease obligations (65,457) (46,814)
Payments of shareholder loans (20,000) -
Payments on bank borrowings (125,000) (3,100,000)
Net proceeds from sale of common stock - 394,927
---------- -----------
Net cash used in financing activities (72,493) (9,758)
---------- -----------
Net increase (decrease) in cash (990,527) 112,732
Cash and cash equivalents at beginning of
period 1,821,014 18,499
---------- -----------
Cash and cash equivalents at end of period $ 830,487 $ 131,231
========== ===========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE)
APPLIED INTELLIGENCE GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30,1997
NOTE 1. DESCRIPTION OF BUSINESS
Applied Intelligence Group, Inc. (the "Company") provides a
diversified range of management consulting and computer systems
integration services, along with providing network services and
network-based computer applications. All services are focused
primarily on the retail and wholesale distribution industries.
Through the Company's wholly-owned subsidiary, ijob, Inc., the
Company also provides human resource recruiting and job candidate
matching capabilities, with access to the database through the
Internet. The Company's clients and customers range from small,
rapidly growing companies to large corporations and are
geographically disbursed throughout the United States.
NOTE 2. BASIS OF PRESENTATION
Reference is made to the Company's Annual Report on Form 10-
KSB for the year ending December 31, 1996.
The accompanying unaudited consolidated financial statements
have been prepared by the Company in accordance with generally
accepted accounting principles for interim financial information
and with the instructions to Form 10-QSB. Accordingly, they do
not include all of the information and footnotes required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring items) considered necessary for a
fair presentation have been included. These interim unaudited
consolidated financial statements should be read in conjunction
with the audited financial statements and related notes included
in the Company's Annual Report on Form 10-KSB as filed on March
31, 1997.
Operating results for the six month period ended June 30,
1997 are not necessarily indicative of the results that may be
expected for the full year ended December 31, 1997.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Statements of the Company's or management's intentions,
beliefs, anticipations, expectations and similar expressions
concerning future events contained in this Form 10-QSB constitute
"forward looking statements" as defined in the Private Securities
Litigation Reform Act of 1995. As with any future event, there
can be no assurance that the events described in forward looking
statements made in this Form 10-QSB will occur or that the
results of future events will not vary materially from those
described in the forward looking statements. Important factors
that could cause the Company's actual performance and operating
results to differ materially from the forward looking statements
include, but are not limited to, changes in the general level of
economic activity in the markets served by the Company,
introduction of new products or services by competitors, delays
in implementing the Company's viaLink services, the availability
of capital sufficient to support the Company's level of activity,
and the ability of the Company to implement its business
strategies.
The Company's expectations with respect to future results of
operations that may be embodied in oral and written forward-
looking statements, including any forward-looking statements that
may be included in this Form 10-QSB, are subject to risks and
uncertainties that must be considered when evaluating the
likelihood of the Company's realization of such expectations.
The Company's actual results could differ materially. Factors
that could cause or contribute to such differences include, but
are not limited to, those discussed in Item 5 of Part II of this
Report.
OVERVIEW
The Company is engaged in the business of providing
information systems services to retail companies and to the
manufacturers, wholesalers, and other suppliers who provide the
products that these retail companies sell (the "Retail Supply
Chain"). These information systems services include (i)
management consulting and computer system integration services,
(ii) proprietary software products and applications, and (iii)
network services and network-based computer applications. The
Company is organized to provide all three information systems
services in several business areas: Retail Consulting, Store
Systems Consulting, Internet Consulting, viaLink Implementation
and Production/Operations.
In 1993, the Company began development of viaLink, a
subscription service now available on the World Wide Web of the
Internet (the "Internet"), which was announced in April 1996, and
live services were first delivered in January 1997. In 1994, the
Company began work on its RETAIL SERVICES APPLICATION ("RSA"),
which was released in August 1995. During the six months ended
June 30, 1997 the Company expended approximately $276,000, in
excess of revenues, to launch and implement a new Internet tool
called ijob. During the second quarter 1997, ijob, Inc. was
formed as a wholly-owned subsidiary of the Company, and commenced
operations as a separate entity on June 30, 1997. The subsidiary
initially had 13 employees, with locations at the Company's
principal offices in Edmond and two satellite recruiting centers
located in the metropolitan Oklahoma City area.
ijob is a network based human resource recruiting
application deployed through either the Internet or accessible by
telephone. ijob uses these communications systems as a medium to
bring together people looking for jobs and companies looking for
employees. ijob utilizes a database to collect, catalog and match
information to screen and pre-qualify job candidates with the
human resources needs of employers who subscribe to the ijob
network services application.
The Company believes this system represents a technological
improvement over current Internet "resume web sites" where career
material is simply posted on unscreened databases or on bulletin
boards. With ijob, the subscribing employer benefits by receiving
a list of pre-qualified applicants who have greater probability
of the employer's human resource needs. Computer assisted
structured interviews ("CASI") and skill testing are used to help
determine if the applicant will meet the required needs. This
predictive system enables employers to conduct focused searches,
saving time
and money. People looking for jobs also benefit by using the ijob
system. Free to job seekers, ijob maintains all information in
its active database until the applicant requests its withdrawal.
During the second quarter of 1997, ijob earned $161,258 in
revenues.
The Company has made significant expenditures for
development, implementation and marketing of its software license
products, RSA and network information system offerings, viaLink
and ijob. During the first six months of 1997, the Company
expensed approximately $690,000 in such costs compared to
approximately $480,000 in the first six months of 1996. It is
expected the Company will continue to fund and develop these new
product offerings.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 Compared With Three Months
Ended June 30, 1996
REVENUES. Total revenues decreased $918,950 (31 percent)
from $3,008,467 in the three months ended June 30, 1996 compared
to revenues of $2,089,517 in the three months ended June 30,
1997. The decrease in gross revenues was principally due to the
decrease in hardware and product sales of $745,074 and consulting
fees from all lines of business of $508,159. Solutions revenues
also decreased $63,125. These revenue decreases were partially
offset by increased revenues from the Company's network services,
network based computer applications, customer support revenues
and commissions, all of which increased a total of $397,408 in
the second quarter of 1997 compared to the second quarter of
1996.
Hardware and products sales decreased $745,074 (58 percent)
from revenues of $1,289,598 in the second quarter of 1996 to
revenues of $544,524 in the second quarter of 1997. The decrease
was primarily due to the transition and changing of focus to
higher margin revenue streams, and less focus on these low margin
hardware sales. Several customers completed their store roll-out
process of new hardware and made less hardware purchases.
Furthermore, one customer purchased the majority of its point-of-
sale hardware directly from the vendor, whereas in the same
period in 1996, the customer made purchases through the Company.
However, the Company received commissions on these sales of
$72,136 during the second quarter of 1997, which partially offset
the decrease in gross revenues caused by decreased hardware
sales.
Solutions revenues decreased $63,125 (82 percent) from
reported revenues of $76,653 in the second quarter of 1996 to
$13,528 in the same period of 1997. The decrease was due to only
$8,000 of RSA licenses sold in the second quarter of 1997
compared to $65,000 of RSA licenses sold in the second quarter
1996.
Consulting fees earned during the three months ended June
30, 1997 totaled $1,037,354 compared to $1,545,513 for the same
period in 1996, a decrease of $508,159 (33 percent). The
decrease was due, in part, to the conclusion of the revenue
stream from several large consulting projects in the first
quarter and during the second quarter of 1997 that have not been
completely replaced with consulting revenue from new sales. The
Company expects to initiate several new consulting projects
during the remainder of 1997; however, there is no assurance as
to the commencement of such projects.
Customer support revenues totaled $173,567 for the second
quarter of 1997 compared to revenues of $96,703 for the second
quarter of 1996. The increase of $76,864 (79 percent) was due to
additional contracts obtained in 1997 and higher levels of
billings for hours in excess of the standard contract levels than
were billed in 1996.
Revenues from the Company's network services and network
based computer applications were $248,408 for the three months
ended June 30, 1997, while these sources of revenues did not
exist in the second quarter of 1996. This represents an increase
over the first quarter of $61,162 (33 percent). These revenues
included $161,258 of ijob service revenues. The Company has and
will continue to make significant expenditures for investment and
development in these services in order to shift the Company's
focus from single consulting projects to recurring network
service revenues with expected higher profit margins and
increasing revenue streams.
DIRECT COST OF SALES. Direct cost of sales, which consists
of purchased hardware and certain software for resale, and costs
associated with the Company's proprietary software products,
decreased $737,036 (59 percent) to $502,550 in the second quarter
of 1997 from $1,239,586 in the second quarter of 1996. The
decrease was in line with the decreased products revenues and
solutions revenues. Commissions received of $72,136 for the
second quarter of 1997 served to partially replace the lost net
revenue from these transactions.
SALARIES AND BENEFITS. Salaries, wages, taxes and related
benefits, and contract labor expenses totaled $1,540,677 for the
three months ended June 30, 1997 compared to $1,238,339 for the
same period in 1996, an increase of $302,338 (24 percent).
During the second quarter of 1997, the Company utilized contract
programmers for client engagements to a greater extent than in
the same period of 1996 during which virtually no contract
programmers were utilized. In addition, late in the first quarter
of 1997, a contract sales executive was hired to promote sales in
the solutions business area of the Company. Contract labor
expenses totaled $158,890 during the three months ended June 30,
1997 compared to a total of $4,350 during the three months ended
June 30, 1996. Furthermore, contract labor expenses for
implementation and operation of ijob increased the total contract
labor costs by $36,815, which were not present in the three
months ended June 30, 1996. Certain of the ijob contract labor
expenses were converted to salaried employees on June 30, 1997.
Direct payroll costs of salaries and wages increased
$100,817 (8 percent) from $1,247,578 for the three months ended
June 30, 1996 to $1,348,395 for the same period in 1997. This
increase was due to increased employed personnel, in part
associated with the start up of ijob. The formation and
implementation of ijob added 11 new staff during the second
quarter of 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling,
general and administrative expenses increased $156,203 (31
percent) from $510,787 for the three months ended June 30, 1996
to $666,991 for the three months ended June 30, 1997.
Recruiting and staffing expenses decreased $19,113 (59
percent), to $13,349 in the second quarter of 1997 from $32,462
in the same quarter of 1996, due to much less recruiting and
relocation activity for full time employees.
Meetings and training expenses totaled $66,898 for the
second quarter of 1997 compared to $30,232 for the same period in
1996. The increase of $36,666 (122 percent) was primarily due to
a Company-wide Stephen Covey Principle Centered Leadership
training and teaching certification of the Company's Director of
Human Resources. Increased fees and booth expenses associated
with certain conferences also contributed to this increase.
Telecommunications expense increased $14,863 (35 percent)
from $42,207 for the three months ended June 30, 1996 to $57,070
in the same period of 1997. This increase was due to (i) the
start up of ijob operations and the opening of a new service
center during the second quarter, (ii) to the expansion of the
Company's communication systems for viaLink and web site hosting
services, (iii) and greater long distance usage due to the
increased marketing activities of the Company.
Advertising and promotion expenses totaled $41,728 for the
second quarter of 1997 compared to $18,197 for the same quarter
in 1996. The increase of $23,531 (129 percent) was due to
increased marketing and sales promotion activities for the
Company, including ijob. The Company anticipates that
advertising and promotion expenses will continue to be at higher
levels than prior periods due to the increased marketing of
viaLink and ijob. Expected revenues from viaLink and ijob due to
higher levels of selling and marketing expenses may not occur
until late 1997 or may not occur, depending upon market
acceptance.
Professional fees increased $99,508 (169 percent) to
$158,233 in the three months ended June 30, 1997 compared to a
total of $58,725 in the three months ended June 30, 1996. These
increased expenses relate to the use of professional consultants
for the continued marketing and implementation of the Company's
new viaLink Item Catalog Service and for legal and certain
operating costs recorded as professional fees associated with the
start-up costs, formation, implementation and operation of ijob.
See "Overview." These projects are part of the recurring
revenue business area, as the Company shifts its focus from
single consulting projects to recurring network service revenues
with expected higher profit margins on growing revenue streams.
Other income and expense for the second quarter in 1997
decreased $28,806 (115 percent) from an expenses balance of
$25,031 for the second quarter of 1996 to an income balance of
$3,775 for same quarter in 1997. No bad debt expense was
required to be recorded as of June 30, 1997 compared to a bad
debt expense in the second quarter of 1996 of $34,000. All other
selling, general and administrative expenses increased $29,555
(less than 10 percent) from $303,933 for the three months ended
June 30, 1996 to $333,488 for the three months ended June 30,
1997.
INTEREST EXPENSE. Net interest expense decreased $43,330
(64 percent) to $24,537 for the three months ended June 30, 1997
from $67,867 for the same period in 1996. The decrease was due
to the repayment of outstanding bank debt with the proceeds of
the Company's initial public offering in November 1996. During
the second quarter, certain borrowings were made under the
Company's bank line-of-credit with an outstanding balance of
$267,000 at June 30, 1997. Average total outstanding debt during
the second quarter 1997 was $865,000, compared to average total
outstanding debt in the second quarter of 1996 of $2,382,000.
DEPRECIATION AND AMORTIZATION. Depreciation and
amortization expense totaled $216,210 for the second quarter
ended June 30, 1997 compared to $119,191 for the same quarter
ended 1996, an increase of $97,019 (81 percent). The increase
was due to large capital asset expenditures made during 1996,
totaling $625,893, and software development cost capitalized of
$655,248. Furthermore, the Company commenced amortization of
software development costs associated with the viaLink Item
Catalog Service system placed in service in January 1997.
TAX BENEFIT. The Company recorded a tax benefit of $262,350
related to the pre-tax loss of $861,448 for the three months
ended June 30, 1997. Such tax benefit will be carried forward to
future periods and will expire in 2012. The cumulative deferred
tax asset at June 30, 1997 is $389,158. Management believes
realization of such deferred tax benefit is more likely than not
based upon expected future taxable income and therefore a
valuation allowance has not been provided.
Six Months Ended June 30, 1997 Compared With Six Months
Ended June 30, 1996
REVENUES. Gross revenues for the six months ended June 30,
1997 amounted to $3,925,936, a decrease of $1,440,818 (27
percent) from the reported revenues of $5,366,754 for the first
six months of 1996. Hardware and products, solutions and
consulting revenues decreased a total of $2,056,804 (40 percent),
from revenues of $5,166,371 in 1996 to revenues of $3,109,567
from these sources in 1997. These decreases were partially
offset by increased revenues from the Company's network services,
network based computer applications, customer support revenues
and commissions, all of which increased a total of 615,986 (307
percent), from $200,383 in 1996 to $816,369 in 1997 in revenues
from these sources.
Hardware and product sales decreased by $995,295 (56
percent) from revenues of $1,771,308 in 1996 to revenues of
$776,013 in 1997. The decrease was primarily due to the
transition and changing of focus to higher margin revenue
streams, and less focus on these low margin hardware sales.
Also, several customers completed their store roll-out process of
new hardware and made less hardware purchases in this period
compared to the prior year. Furthermore, during the six months
ending June 30, 1997 one customer purchased the majority of its
point-of-sale hardware directly from the vendor, whereas in the
prior period, the customer made purchases through the Company.
However, these sales provided the Company with increased
commission revenues of $145,379, which partially offset the
decrease in gross revenues from hardware sales. No commissions
were earned in the first six months of 1996.
Solutions revenues decreased $890,306 (94 percent) from
reported revenues of $945,938 during the six months ended June
30, 1996 to $55,632 in 1997. A sale of the Company's RSA product
totaling $898,000 was made during the six months ended 1996,
whereas only $55,632 of RSA sales have been made so far in 1997.
Consulting fees earned during the six months ended June 30,
1997 totaled $2,277,922, compared to $2,449,125 for same period
in 1996, a decrease of $171,203 (seven percent). Several large
client projects were completed in the first quarter and second
quarter of 1997 that have not yet been completely replaced with
consulting revenue from new sales. The Company expects to
initiate several new consulting projects during the remainder of
1997; however, there is no assurance as to the commencement of
such projects.
Customer support revenue totaled $245,336 for the six months
ended June 30, 1997 compared to revenue of $200,383 in 1996. The
increase of $44,953 (22 percent) was due to additional contracts
obtained in 1997 and higher levels of billings for hours in
excess of the standard contract levels than were billed in 1996.
Revenues from the Company's network services and network
based computer applications were $425,654 for the six months
ended June 30,1997 while these sources of revenues did not exist
for the same period in 1996. These services are a part of the
Company's transition to and development of a recurring revenue
business area. The Company has and will continue to make
significant expenditures for investment and development in these
services in order to shift the Company's focus from single
consulting projects to recurring network service revenues with
expected higher profit margins and increasing revenue streams.
DIRECT COST OF SALES. Direct cost of sales, which consists
of purchased hardware and certain software for resale, and costs
associated with the Company's proprietary software products,
totaled $691,045 for the first six months of 1997 compared to a
total of $1,660,320 for the first six months of 1996, a decrease
of $969,275 (58 percent), which was in line with the decreased
products revenues and solutions revenues discussed above.
Commissions received of $145,379 served to partially replace the
lost net revenue from these transactions, which were not present
in the prior six month period.
SALARIES AND BENEFITS. Salaries, wages, taxes and related
benefits, and contract labor expenses in total amounted to
$2,915,294 for the six months ended June 30, 1997 compared to
$2,468,920 for the same period in 1996, an increase of $446,374
(18 percent). During the first six months of 1997, the Company
utilized contract programmers for client engagements to a greater
extent than in the same period in 1996 during which virtually no
contract programmers were utilized. In addition, late in the
first quarter of 1997, a contract sales executive was hired to
promote sales in the solutions business area of the Company.
Contract labor expenses totaled $280,666 during the six months
ended June 30, 1997 compared to a total of $14,114 during the six
months ended June 30, 1996 an increase of $266,562.
Additionally, approximately $102,000 of these increased
contractor expenses was the result of the start-up, formation,
implementation and operation of ijob, Inc. during the first six
months of 1997. Certain of the ijob contract labor expenses were
converted to salaried employees on June 30, 1997.
Direct payroll costs of salaries and wages increased
$116,620 (5 percent) to $2,553,450 for the first six months of
1997 from $2,436,830 for the same period in 1996. This increase
was due to increased employed personnel, in part associated with
the start up ijob, and with the Company. The formation and
implementation of ijob added 11 new staff during the second
quarter of 1997.
During the six months ended June 30, 1997 the Company
capitalized $271,190 for software development costs, compared to
$326,098 for the six months ended June 30, 1996. This decrease
of $54,908 (17 percent) serves to increase the overall payroll,
salaries, wages and benefits expenses for the period.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling,
general and administrative expenses totaled $1,253,881 for the
six months ending June 30, 1997 compared to $1,001,737 for the
first six months of 1996, an increase of $252,144 (25 percent).
Recruiting and staffing expenses decreased $16,759 (42
percent) from $39,508 during the six months ending June 30, 1996
to $22,749 during the six months ending June 30, 1997. This
decrease was due to much less recruiting and relocation activity
for full time employees required in the first six months of 1997.
Meetings and training expenses totaled $108,495 during the
six months ended June 30, 1997 compared $82,325 for the six
months ended June 30, 1996, an increase of $26,170 (32 percent).
This increase is primarily due to a Company-wide Stephen Covey
Principle Centered Leadership training and Covey teaching
certification for the Company's Director of Human Resources.
Increased fees and booth expenses associated with certain
conferences also contributed to this increase.
Telecommunications expense increased $24,888 (33 percent) to
$101,162 in the six months ended June 30, 1997 from $76,274 for
the same period in 1996. This increase was due to (i) the start
up of ijob, Inc. operations and the opening of a new ijob service
center during the second quarter, (ii) to the expansion of the
Company's communication systems for viaLink and web site hosting
services, (iii) and greater long distance usage due to the
increased marketing activities of the Company.
Advertising and promotion expenses totaled $87,479 for the
six months ended June 30, 1997 compared to a total of such
expenses of $37,610 for the six months ended June 30, 1996 an
increase of $49,869 (133 percent increase). The increase was due
to the increased marketing and sales promotion activities (travel
and expenses for new staff) for the Company, of which $21,315 was
attributable to ijob. The Company anticipates that advertising
and promotion expenses will continue to be at higher levels than
prior years due to the increased marketing effort being made on
viaLink and ijob. Expected revenue from viaLink and ijob
resulting from higher levels of selling and marketing activities
may not occur until late this year or may not occur, depending
upon market acceptance.
Supplies and resources expenses totaled $142,838 for the six
months ended June 30, 1997 compared to a total of $116,586 for
the six months ended June 30, 1996 an increase of $26,252 (23
percent). This increase was entirely due to the start-up and
commencement of operations for ijob.
Professional fees (legal, accounting, outside consultants)
totaled $284,010 for the six months ended June 30, 1997 compared
$150,171 for the same period in 1996, an increase of $133,839 (89
percent). These increased expenses relate to the use of
professional consultants for the continued marketing and
implementation of the Company's new viaLink Item Catalog Service,
consultants for the continued development of other viaLink
services and for legal and certain operating costs recorded as
professional fees associated with the formation, implementation
and operation of ijob. See "Overview." These projects are all
part of the recurring revenue business area, as the Company
shifts its focus from single consulting projects to recurring
network service revenues with expected higher profit margins.
Other income and expense for the six months ended June 30,
1997 totaled $2,460 compared to $46,217 for the six months ended
June 30, 1996, a decrease of $43,757 (95 percent). The primary
reason is no bad debt expense was required to be recorded as of
June 30, 1997, compared to a bad debt expense as of June 30, 1996
of $55,000. All other selling, general and administrative
expenses totaled $504,688 for the six months ended June 30, 1997
compared to a total of such expenses of $453,046 for the six
months ended June 30, 1996 an increase of $51,642 (11 percent).
INTEREST EXPENSE. Net interest expense for the six months
ended June 30, 1997 totaled $30,102, a decrease of $82,852 (73
percent) from $112,954 for the six months ended June 30, 1996 due
to the repayment of outstanding bank debt with the proceeds of
the Company's initial public offering in November 1996. During
the six months ended June 30, 1997 certain borrowings were made
under the Company's bank line-of-credit with an outstanding
balance of $267,000 at June 30, 1997. Average total outstanding
debt during this period in 1997 was $816,000 compared to average
total outstanding debt in the first six months of 1996 of
$2,350,260.
DEPRECIATION AND AMORTIZATION. Depreciation and
amortization expense totaled $395,732 for the six months ended
June 30, 1997 compared to $259,106 in the six months ended June
30, 1996 an increase of $136,626 (53 percent). This increase is
due to the large capital asset expenditures made during 1996,
totaling $625,893, now depreciated for a full year, and total
software development cost capitalized of $655,248. During the
first six months of 1997, the Company has expended $326,322 in
fixed asset capital additions. Furthermore, the Company has
commenced amortization of software development costs associated
with the viaLink Item Catalog Service system placed in service in
January 1997.
TAX BENEFIT. The Company recorded a tax benefit of $451,845
related to the pre-tax loss of $1,360,118 for the six months
ended June 30, 1997. Such tax benefit will be carried forward to
future periods and will expire in 2012. The cumulative deferred
tax asset at June 30, 1997 is $389,158. Management believes
realization of such deferred tax benefit is more likely than not
based upon expected future taxable income and therefore a
valuation allowance has not been provided.
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1997 the Company had cash and cash
equivalents of $830,487, and working capital of $534,064, with a
working capital ratio of 1.25 to 1.
In addition to such capital resources, the Company currently
has an available bank line of credit facility pursuant to which
it may borrow up to $1,000,000, secured by accounts receivable
and all tangible assets of the Company. The credit facility
expires on October 1, 1997. As of June 30, 1997, the Company had
borrowed $267,000 under this line of credit. Prior to the
Company's initial public offering in November 1996, the Company
financed
its operations and growth through internally generated cash flows
and borrowings.
During the six months ended June 30, 1997 net cash decreased
a total of $990,527. This decrease was caused primarily by the
loss of the six months of $908,273 and cash used in investing
activities for expenditures of capital and software development,
offset by the collection of accounts receivable.
The Company used cash in operating activities of $320,522
compared to net cash flow provided in the six months ended June
30, 1996 of $768,038. A loss of $908,273 for the six months was
recorded compared to a loss of $84,495 for the same period of
1996. Accounts receivable decreased a net $592,918 during the
six months ended June 30, 1997 from $2,009,837 at December 31,
1996 to $1,416,919 at June 30, 1997 partly due to decreased
revenues for the period and an aggressive collection effort by
the Company of its accounts receivable. All other operating
activities used net cash flows of $5,167 during the period.
During the six months ended June 30, 1997 the Company
expended cash for investing activities of $326,322 in various
fixed assets, hardware and software and $271,190 for software
development costs of its proprietary software products, compared
to total expenditures of $319,450 and $326,098, respectively, for
the same items in the six months ended June 30, 1996.
During the six months ended June 30, 1997, the Company used
net cash in financing activities of $72,493, which was provided
by net borrowings under the bank line of credit of $267,000, and
receipts of $279 from the exercise of stock options and $1,302
from the purchase of stock under the recently implemented
Employee Stock Purchase Plan. Such receipts were used to pay for
reductions of shareholder loans by $20,000, capital lease
payments of $65,457, and a decrease in the book overdraft of
$255,617. Net cash decreased during the six months ended June
30, 1997 by $990,527, compared to a net increase in cash during
the six months ended June 30, 1996 of $112,732.
The Company anticipates that its operations and growth
strategy will be financed through remaining proceeds from its
initial public offering, operating cash flow, capital lease
sources and the bank line of credit facility, which the Company
expects to replace in the third quarter. The Company believes
that these sources of funds will be sufficient to satisfy the
Company's operating and capital requirements for at least 12
months. There may be circumstances, however, that would
accelerate the Company's use of such financing sources. If this
occurs, the Company may, from time to time, incur indebtedness or
issue, in public or private transactions, equity or debt
securities. The Company currently has no arrangements for
additional financing. In addition, the Company has been notified
that its current line of credit will not be renewed and is in
discussions with several financial institutions to replace such
line. There can be no assurance that the Company will be able to
obtain requisite financing when needed on acceptable terms.
EXPECTED LOSS
The Company expects to report a loss for 1997. The Company
expects to continue the high level of expenditures for sales and
marketing of its new network information systems, viaLink and
ijob, as well as, continuing to make large investments in these
and other systems. The extent of the Company's loss will depend
on product availability, introduction into the retail supply
chain and market acceptance of these offerings. The Company's
investment in new network information systems facilitates their
plan to shift from single consulting projects to recurring
network service revenues with higher profit margins. As a result
of the high level of expenditures for selling and marketing and
investments in network services the Company anticipates
profitability in future periods; however, there is no such
assurance.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1997 annual meeting of the stockholders of the Company
was held on June 3, 1997.
ELECTION OF ONE CLASS I DIRECTOR
Russell Reinhardt was elected as a Class I director to the
Company's Board of Directors to hold office for a three year term
expiring in 2000 or until his successor is duly elected and
qualified. The other directors, whose terms of office continued
after the meeting, are Robert Barcum and Robert Baker. In
connection with the election of the director, and other matters
submitted to a vote of security holders, the vote was:
NOMINEE FOR AGAINST ABSTAINED NON-VOTES
Russell Reinhardt 2,503,212 12,700 18,000
193,032
APPROVAL OF THE 1997 EMPLOYEE STOCK PURCHASE PLAN
FOR AGAINST ABSTAINED NON-VOTES
2,488,462 37,650 7,800 193,032
RATIFICATION OF THE APPOINTMENT OF COOPERS & LYBRAND L.L.P. AS
AUDITORS FOR THE FISCAL YEAR 1997
FOR AGAINST ABSTAINED NON-VOTES
2,511,412 21,200 1,300 193,032
ITEM 5. OTHER INFORMATION
CERTAIN FACTORS THAT MAY AFFECT FUTURE RESULTS
The Company does not provide forecasts of its future
financial performance. However, from time to time, information
provided by the Company or statements made by its employees may
contain "forward-looking" information that involve risks and
uncertainties. In particular, statements contained in this Form
10-QSB that are not historical facts constitute forward-looking
statements and are made under the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. The Company's
actual results of operations and financial condition have varied
and may in the future vary significantly from those stated in any
forward-looking statements. The Company's future operating
results are subject to risks and uncertainties and are dependent
upon many factors, including, without limitation, (i) changes in
the general level of economic activity in the markets served by
the Company, (ii) introduction of new products or services by
competitors, (iii) the availability of capital sufficient to
support the Company's level of activity, (iv) the ability of the
Company to implement its business strategies, (v) delays in
implementing the Company's viaLink services, (vi) the ability of
the Company to understand, anticipate and respond to rapidly
changing technologies, market trends and customer needs, and
(vii) the ability of the Company to recruit and retain highly
talented professionals in a competitive job market. The Company's
ability to market and sell its products could also be adversely
affected by the emergence of new competitors in the market place
and by changes resulting in increased government regulation. In
addition, a significant portion of the Company's revenues are
attributable to a limited number of individual customers, the
immediate loss of any of which may adversely affect the Company's
business and results of operations. Each of these factors, and
others, are discussed from time to time in the filings made by
the Company with the Securities and Exchange Commission,
including, but not limited to, the Company's Form SB-2
Registration Statement (no. 333-5058-D) which became effective on
November 20, 1996 and the Company's Annual Report on Form 10-KSB
filed on March 31, 1997.
POTENTIAL FLUCTUATIONS IN OPERATING RESULTS
The Company's quarterly operating results have in the past
varied and may in the future vary significantly depending on
factors such as the size, timing and recognition of revenue from
significant customer consulting and systems integration activity,
hardware and software sales, the timing of new product releases
and market acceptance of these new releases, increases in
operating expenses, and to some extent, the seasonal nature of
its business. Thus, the Company's revenues and results of
operations have and may continue to vary significantly from
quarter to quarter, period to period, and year to year based upon
frequency and volume of sales and licensing of the Company's
software applications and providing of consulting services during
such period, as well as software applications developed by the
Company. Due to the relatively fixed nature of certain of the
Company's costs throughout each quarterly period, including
personnel and facilities costs, the decline of revenues in any
quarter typically results in lower profitability in that quarter.
There can be no assurance that the Company will be successful in
achieving profitability or avoiding losses in any future period.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.44 Asset Purchase Agreement between ijob, Inc. and Human
Technologies, Inc., dated June 12, 1997
10.45 Software License Agreement between ijob, Inc. and Human
Technologies, Inc., dated June 12, 1997
10.46 Conveyance Agreement between ijob, Inc. and Human
Technologies, Inc., dated June 12, 1997
10.47 Conveyance Agreement between ijob, Inc. and Applied
Intelligence Group, Inc., dated June 12, 1997
10.48 Employment Agreement between ijob, Inc. and David
Mitchell, dated June 12, 1997
10.49 Stock Option Agreement between Applied Intelligence
Group, Inc. and David Mitchell, dated June 12, 1997
10.50 Common Stock Purchase Warrant Agreement between Applied
Intelligence Group, Inc. and Ron Beasley,
dated June 12, 1997
(b) Reports on Form 8-K
On May 5, 1997 the Company filed a Form 8-K, regarding
the launching of its ijob recruiting system.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
APPLIED INTELLIGENCE GROUP, INC.
By: /s/ ROBERT L. BARCUM
Robert L. Barcum
Chairman of the Board
President and Chief Executive
Officer
August 12, 1997
By: /s/ JOHN M.DUCK
John M. Duck
Vice President and Chief
Financial Officer
August 12, 1997
Exhibit 10.44
ASSET PURCHASE AGREEMENT
This Asset Purchase Agreement ("Agreement") entered into as
of June 12th, 1997 ("Effective Date") between ijob, Inc.
("ijob"), an Oklahoma corporation whose principal place of
business is 13800 Benson Road, Edmond, OK 73013 and HT
Technologies, Inc. ("HT"), an Oklahoma corporation whose
principal place of business is 2801 E. Memorial Road, Edmond,
Oklahoma 73013; David Mitchell, an individual whose business
address is 2801 E. Memorial Road, Edmond, Oklahoma 73013
("Mitchell"); and Ron Beasley, an individual whose business
address is 2801 E. Memorial Road, Edmond, Oklahoma
73013("Beasley").
WHEREAS, HT has developed certain software and software
related processes relating to the testing, identification and/or
referral of individuals seeking employment ("Software"); and
WHEREAS, ijob desires to acquire all of HT's interest in and
to said Software; and
WHEREAS, Mitchell and Beasley are the sole shareholders of
HT and Mitchell has executed an employment agreement ("Employment
Agreement") with ijob of even date herewith; and
WHEREAS, ijob, agrees to license back to HT certain rights
in the assets being purchased pursuant to this Agreement.
WHEREUPON, in consideration of the above premises and the
mutual agreements, representations and warranties set forth in
this Agreement, the parties agree as follows:
1. Sale of Assets. HT, Mitchell and Beasley agree to
sell and transfer to ijob, and ijob agrees to purchase from HT,
Mitchell and Beasley at the Closing (as hereinafter identified in
this section 1),all of HT's right, title and interest in and to
the assets identified on Exhibit A hereto ("Assets") free and
clear of any pledge, lien, option, security interest, mortgage
claim, charge or other encumbrance of any kind whatsoever except
as provided in Sections 3.4 and 3.5 hereof. Notwithstanding
anything to the contrary herein, it is agreed and understood that
HT's expatriate selection and testing program known as
"ipatriot" is not included in the Assets being sold to ijob by
HT. Also, notwithstanding anything to the contrary in this
Agreement, it is also agreed and understood that ijob is not
assuming any of HT's financial or other obligations whatsoever,
including without limiting the generality of the foregoing, any
financial or other obligations under the license agreements or
other agreements listed on Exhibit C hereto. The closing of such
sale shall take place at the offices of ijob on or before the
15th day of June, 1997 ("Closing").
2. Purchase Price. The consideration for the purchase of
said Assets shall be comprised of the following:
2.1 One Hundred ($100.00) Dollars paid at Closing to HT.
2.2 The issuance by Applied Intelligence Group, Inc.
("AIG") of thirty-eight thousand (38,000) stock options to
Mitchell and twelve thousand (12,000) stock warrants to Beasley
in AIG common stock with a price of $3.50 per share. Such stock
options and warrants shall be fully vested as of the Effective
Date of this Agreement but shall be forfeited to the extent that
they are not exercised within two (2) years of the Effective Date
of this Agreement.
2.3 Subject to the terms of subsections 2.3.1 and 2.3.2
hereof, the payment by ijob to HT of (i) fifty percent (50%) of
the Distributable Earnings of ijob, (ii) fifty percent (50%) of
the Distributable Proceeds from the sale of ijob assets and (iii)
fifty percent (50%) of any Distributable Gross Royalties received
by ijob from the sale or other transfer of ijob assets
(hereinafter collectively referred to as "Distributable
Amounts"). For purposes of this Agreement, what constitutes such
Distributable Amounts shall be determined from time to time by a
majority vote of the then current Board of Directors of ijob.
The other fifty percent (50%) of said Distributable Amounts shall
be distributed to AIG, which is an intended beneficiary of this
Agreement.
2.3.1 Notwithstanding anything to the contrary in
section 2.3 hereof but subject to the terms of
subsection 2.3.2 hereof, it is agreed and understood
that the Board of Directors of ijob shall have the
power and authority upon a majority vote to grant key
ijob employees a share in any or all of said
Distributable Amounts as ijob's Board deems
appropriate; provided however and notwithstanding
anything to the contrary in this subsection 2.3.1, any
such share(s) granted to other parties shall equally
reduce the amounts otherwise payable to HT and AIG from
said Distributable Amounts.
2.3.2 Notwithstanding anything to the contrary in
section 2.3 hereof or any subsection thereof, upon the
sale of all of the stock or of substantially all of the
assets of ijob, neither HT nor AIG nor any other person
who has been given a share(s) in said Distributable
Amounts shall have any further right to any share
therein except as may be reserved in such sale.
2.4 The granting of a license from ijob to HT to use
certain of the Assets subject to the terms and conditions of said
License. It is agreed and understood that although ijob is
acquiring said Assets, ijob is not assuming any of HT's
obligations under the licenses or other agreements identified on
Exhibit C hereto. The License shall be in substantially the form
set forth in Exhibit B hereto.
2.5 It is agreed and understood that AIG shall
have the right in its sole and absolute
discretion to sell any stock it holds in
ijob. Provided, however, and notwithstanding
anything to the contrary herein, HT shall
have a right of first refusal to match any
bona fide offer(s) from any third party or
parties, accepted by AIG, to purchase all or
any of the stock of ijob. Such right of
first refusal shall be on the same terms and
conditions as are set forth in any such bona
fide offer(s) which may be accepted by AIG;
provided however, HT must notify AIG in
writing within thirty (30) days of receipt of
notice from AIG that AIG either has or will
accept any such bona fide offer that HT will
exercise this right of first refusal and
agrees to meet the terms of such bona fide
offer. If AIG receives such notice that HT
will exercise its right of first refusal, AIG
agrees to sell to HT on such terms and
conditions. If AIG has not received such
notice from HT within such thirty (30) day
period, HT's right of first refusal as to
that bona fide offer is null and void and of
no further force and effect. In the event
that HT does not exercise its right of first
refusal, and AIG proceeds with such sale, HT
shall share in the net sales proceeds ("Net
Sales Proceeds") from such sale in an amount
equal to the amount it would have been
entitled to receive as Distributable Proceeds
from the sale of ijob assets pursuant to
either Section 2.3 or 2.3.1 of this
Agreement, as the case may be.
2.6 It is agreed and understood that HT shall have the
right, in its sole and absolute discretion, to transfer its
rights to receive Distributable Amounts under this Agreement.
Provided, however, and notwithstanding anything to the contrary
herein, AIG shall have a right of first refusal to match any bona
fide offer(s) from any third party, accepted by HT, to acquire
HT=s rights to any such Distributable Amounts. Such right of
first refusal shall be on the same terms and conditions as are
set forth in such bona fide offer(s) which may be accepted by HT;
provided however, AIG must notify HT in writing within thirty
(30) days of receipt of notice from HT that HT either has or will
accept any such bona fide offer that AIG will exercise this right
of first refusal and agrees to meet the terms of such bona fide
offer. If HT receives such notice that AIG will exercise its
right of first refusal, HT agrees to sell to AIG on such terms
and conditions. If HT has not received such notice from AIG
within such thirty (30) day period, AIG's right of first refusal
as to that bona fide offer is null and void and of no further
force and effect.
3. Representations and Warranties of HT, Mitchell and
Beasley. HT, Mitchell and Beasley covenant, represent and
warrant as follows:
3.1 HT is a corporation duly organized and validly existing
and in good standing under the laws of the State of Oklahoma and
its sole shareholders are Mitchell and Beasley.
3.2 HT has full corporate power and authority to execute
and deliver this Agreement and to consummate the transactions
contemplated hereby. No other corporate proceedings on the part
of HT are necessary to authorize the Agreement or to consummate
the transaction so contemplated.
3.3 Neither the execution and delivery by HT of this
Agreement, nor the consummation of the transactions contemplated
hereby will result in a default (or give rise to any right of
termination, cancellation or acceleration) under any of the
terms, conditions or provisions of any note, license, agreement,
contract, or other instrument or obligation to which HT is a
party or by which HT or any of the Assets may be bound; or
violate any order, writ, injunction, decree, statute, rule or
regulation applicable to HT or any of the Assets.
3.4 Except for any claims by AIG, Mastermind Technology,
Inc. and/or Kerry Master in or to any of the Assets, such Assets
or any portion thereof are not subject to any license or other
rights of any third party.
3.5 Except for any claims by AIG, Mastermind Technology,
Inc. and/or Kerry Master in or to the Assets, and except to the
extent that HT has granted licenses in or to said Assets in any
of the licenses identified on Exhibit C to this Agreement, HT,
Mitchell and Beasley have not mortgaged, pledged or subjected
any of said Assets to any lien, charge, security interest or any
other encumbrance or sold, assigned, transferred or granted any
rights or options of any kind or nature in the Assets or agreed
to do so.
3.6 Other than as contained in the Assets sold to ijob
pursuant to this Agreement, there are no patents, patents
pending, trademarks, trade names, service marks, copyright
registrations or applications therefor, owned, licensed or used
by or registered in the name of HT or other persons which apply
to the business. To the extent that any such rights exist, HT,
Mitchell and Beasley specifically agree to assign such unreserved
rights to ijob, so long as such rights relate to any of said
Assets.
3.7 There are no actions, suits, notices, proceedings,
orders, arbitrations or investigations (whether HT is plaintiff,
defendant, claimant or subject) pending or, to the best knowledge
of HT and the Shareholders, threatened against or affecting the
Assets, at law or equity, or before or by any federal, state,
municipal or other governmental departments, commission, board,
bureau, agency or instrumentality, domestic or foreign, (and to
the best knowledge of HT and its Shareholders, there exists no
set of facts which would give rise to any of the foregoing).
3.8 The consummation of the transactions contemplated by
this Agreement will not violate, or require compliance with, the
bulk sale or bulk transfer law of any jurisdiction.
3.9 That neither of them have dealt with any person, firm
or corporation who is or may be entitled to a broker's
commission, finder's fee or similar payment from the other party
for arranging the transactions contemplated herein or introducing
the parties to each other.
3.10 The persons signing below on behalf of the respective
parties represent and warrant that they have the authority to
bind the party on whose behalf they have executed this Agreement.
3.11 In the event that the Closing does not take place
contemporaneously with the execution of this Agreement, all of
the covenants, warranties and representations set forth in this
section 3 or elsewhere in this Agreement shall also be true as of
the Closing and HT, Mitchell and Beasley shall give ijob a
written statement to that effect at Closing.
4. Transfer of Documents; Further Assurances. At Closing,
HT will transfer and deliver to ijob all of its right, title and
interest in and to the Assets, and will also then deliver to ijob
all such assignments, bills of sale and instruments of
conveyance, in form and substance reasonably satisfactory to
ijob, and transfer as shall be necessary and effective to
transfer to and vest in ijob good and valid title to all of said
Assets. At the request of ijob after the Closing, HT will
execute and deliver any further instruments of conveyance and
transfer or confirmation thereof and will take such other action
as may reasonably be requested by ijob in order to make effective
and to transfer the Assets contemplated by this Agreement.
5. Indemnification.
5.1 By HT, Mitchell and/or Beasley. HT, Mitchell and
Beasley jointly and individually agree to indemnify, defend, and
hold ijob harmless from and against and in respect to any and all
damages, losses, deficiencies, liabilities, out-of-pocket costs,
attorney fees and expenses, claims, actions, suits or other
proceedings resulting from, related to or arising out of (i) any
breach of any covenant, warranty or representation of HT,
Mitchell and/or Beasley in this Agreement, (ii) any
misrepresentation in or omission from any schedule, certificate
or other document furnished or to be furnished to ijob under this
Agreement and (iii) any breach by HT, Mitchell or Beasley of any
of their obligations or duties under the licenses or other
agreements identified on Exhibit C hereto or under any other
agreements otherwise executed or otherwise entered into by HT,
Mitchell or Beasley.
5.2 By ijob. ijob agrees to indemnify, defend, and hold
HT, Mitchell and Beasley harmless from and against and in respect
to any and all damages, losses, deficiencies, liabilities, out-of-
pocket costs, attorney fees and expenses, claims, actions, suits
or other proceedings resulting from, related to or arising out of
the operations of ijob after Closing except to the extent that
the same may be covered by or relate to or arise out of the
provisions of Section 5.1 hereof and/or the obligations of HT,
Mitchell and/or Beasley thereunder.
6. Non-Competition; Confidentiality; Non-Solicitation. In
order to induce ijob to enter into this Agreement and the
transactions contemplated hereby, HT, Mitchell and Beasley agree
as follows:
6.1 Non-Competition. HT, Mitchell and Beasley agree that
for so long as HT is eligible to receive any Distributable
Amounts from ijob pursuant to Section 2.3 hereof or any
subsection(s) thereof and for a period of two (2) years
subsequent thereto, none of them will compete directly or
indirectly (whether as proprietor, partner, principal,
stockholder, agent, consultant, adviser, employee or otherwise)
with the activities of ijob or solicit existing customers of
ijob. The restrictions on Mitchell set forth in this section 6.1
are in addition to, and not in lieu of, any restrictions placed
upon him in said Employment Agreement.
6.2 Confidentiality Agreement. HT, Mitchell and Beasley
agree to hold all business information and data of ijob as the
confidential and proprietary property of ijob. Moreover, except
to the extent set forth in the license agreement issued pursuant
to Section 2.4 hereof, they and each of them agree that they
will not make any voluntary or independent use of any
confidential, trade secret, trademark, copyrightable, patented or
patentable, or other proprietary business information of ijob,
including, but not limited to, customer lists, computer
programs, databases, pricing formulae, designs, research files,
or any other related information or attempt to procure any rights
adverse to ijob in any intellectual property as listed herein.
7. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto concerning the
subject matter thereof. No prior or contemporaneous
representations, inducements, promises, or agreements, oral or
otherwise, between the parties with reference thereto shall be of
any force or effect.
8. Modification. This Agreement may not be modified,
waived, amended, in whole or in part, without the written consent
of each of the parties hereto.
9. Arbitration. Any controversy or claim arising out of
or relating to this Agreement, or its breach, or its validity or
interpretation, except claims for injunctive relief and claims
involving necessary third parties who refuse to participate,
shall be settled by binding arbitration in accordance with the
then current Commercial Arbitration Rules of the American
Arbitration Association ("AAA"). The location for the
arbitration shall be in Oklahoma County, Oklahoma. Such
arbitration shall be heard and determined by a panel of three (3)
arbitrators in accordance with the then current rules or
regulations of the AAA relating to commercial disputes. One
arbitrator shall be appointed by each party to serve on the
panel. One neutral arbitrator shall be appointed by the AAA and
shall serve as chair-person of the three arbitrator panel. Such
neutral arbitrator shall be an attorney with experience in
handling disputes relating to commercial and/or corporate
litigation disputes. The arbitration award shall be binding on
the parties and may be enforced in any court of competent
jurisdiction. The prevailing party in such arbitration shall be
entitled to recover its reasonable attorney fees and costs
incurred in such arbitration proceeding.
10. Binding. This Agreement is binding on, and inures to
the benefit of ijob, HT, Mitchell, Beasley and their respective
heirs, successors and assigns to the extent permitted by said
Agreement.
11. Captions. The captions of the various sections or
paragraphs used in said Agreement are for convenience only, and
they are not intended to be any part of the body or text of said
Agreement, nor shall they be utilized in construing any of the
provisions thereof.
12. Attorney Fees. In the event that litigation is
instituted between the parties in connection with any controversy
or dispute arising out of or relating to said Agreement, the
prevailing party in such litigation shall be entitled to recover
its reasonable attorney fees and costs.
13. Severability. If any provision of said Agreement shall
be deemed invalid or unenforceable, the remaining provisions of
said Agreement shall not be affected thereby and each remaining
provision shall be valid and enforceable to the fullest extent
permitted by law.
14. Nonwaiver. Any waiver by a party of any breach of any
provision of this Agreement shall not be construed as a waiver of
any continuing or succeeding breach of such provision, a waiver
of that provision itself or a waiver of any other right(s) under
this Agreement.
15. Notice. All communications and notices provided for or
permitted in this Agreement shall be made in writing and shall be
personally delivered, mailed by certified mail, postage prepaid,
or sent by overnight courier to the party at its address first
specified above or to such other address as either party shall
have communicated by written notice to the other.
16. Survival. Unless otherwise specified all of the terms
of this Agreement shall survive the Closing .
ijob, INC. HUMAN TECHNOLOGIES, INC.
By: /s/ Robert Baker By: /s/ David C. Mitchell
Name: Robert Baker Name: David C. Mitchell
Its: Vice President Its: President
Date: June 12, 1997 Date: June 12, 1997
/s/ Ron Beasley /s/ David C. Mitchell
RON BEASLEY DAVID MITCHELL
June 12, 1997 June 12, 1997
Date Date
Applied Intelligence Group, Inc. (consenting and agreeing only as
to the terms of this Asset Purchase Agreement applicable to
Applied Intelligence Group, Inc. and in this regard AIG warrants
that it is a corporation in good standing under the laws of the
state of Oklahoma. )
By: /s/ Robert L. Barcum
Its: President
1
EXHIBIT B Exhibit 10.45
SOFTWARE LICENSE AGREEMENT
This Software License Agreement ("Agreement") made and entered
into between ijob, Inc. ("ijob"), with a business address of 13800
Benson Road, Edmond, Oklahoma 73013 and Human Technologies, Inc.
("Customer"). Ijob and Customer agree that the following terms and
conditions shall govern in all cases when Ijob furnishes Program
Products (as hereinafter defined) to Customer:
1. DEFINITIONS.
1.1 "Agreement" means this Agreement, including any exhibits,
amendments, supplements, and addenda. The term "Agreement" also
includes any future written amendments, modifications or supplements
made pursuant to and in accordance with this Agreement.
1.2 "Program Product" means the computer software programs,
documentation, interfaces and related code identified in Exhibit A
attached hereto. This may include software from third parties from
whom Ijob has obtained a right to use and distribute.
1.3 "Executable Code" means computer programs assembled or compiled
in magnetic or electronic binary form on software media, which are
readable and usable by machines but not generally readable by humans
without reverse assembly, reverse compiling, or reverse engineering.
1.4 "Source Code" means computer programs written in higher-level
programming languages, sometimes accompanied by English language
comments which are intelligible to trained programmers and which may
be translated into Executable Code for operation on computer
equipment through the process of compiling.
1.7 "Documentation" means printed instructions, manuals,
descriptions, on-line help and diagrams pertaining to the Program
Products described in Exhibit A.
2. LICENSE. ijob hereby grants and the Customer accepts a
nontransferable, non-assignable and non-exclusive license to use the
Program Products listed on Exhibit A for its internal business
purposes and, subject to the terms, covenants, conditions and
limitations of this Agreement, to sublicense the same to third
parties; provided however and notwithstanding anything to the
contrary, neither Customer nor any of its sublicensees may use the
Program Products to compete either directly or indirectly with ijob
in the providing of Internet based employment referral, recruiting
and testing services; provided however, HT may continue to use and
develop its expatriate selection and testing program known as
Aipatriot@ to the extent that such program is solely used for the
selection and testing of employees to be sent or transferred overseas
by their employer. Customer may not grant a license to or otherwise
transfer the Program Products to any third party who competes with
ijob in the providing of Internet based employment referral,
recruiting and testing services. The license granted hereunder
extends to the United States and its Territories only. To the
extent that HT grants licenses as permitted by this Agreement, it is
not obligated to pay any royalties or additional license fees to ijob
therefore. The Customer shall shall take all reasonable actions to
prevent others from reverse engineering the Program Products,
decompiling or disassembling any code, or engineering derivative
products which duplicate the unique qualities of the Program
Products. All copies made by the terms of this Agreement and
derivative works based on the Program Products are subject to the
terms and conditions of this Agreement and shall state on such
copy(s) that they are, or include, the property of ijob, and that
such rights of ijob are protected under the copyright, trade secret
and confidentiality laws of the United States, and such other notices
as required by Ijob.
3. TERM. This Agreement is perpetual unless earlier terminated in
accordance with the provisions of this Agreement.
4. CONSIDERATION. This License is granted pursuant to the terms of
an Asset Purchase Agreement executed by and between ijob and Customer
as of the 12th day of June, 1997.
5. TERMINATION.
5.1 Upon termination of this Agreement, Customer shall immediately
discontinue use of the Program Products. Within one (1) week after
the date of termination of this Agreement, Customer will deliver to
Ijob the original and all copies, including partial copies and
modifications, of the Program Products and related documentation or
certify in writing to Ijob that all such Program Products and related
documentation has been destroyed by Customer and have been fully
removed from any computer(s) upon which they have been installed.
5.2 This Agreement shall immediately terminate without notice, to
the extent permitted by applicable law in the jurisdiction or
jurisdictions in question, if Customer files a petition in bankruptcy
(or is the subject of an involuntary petition in bankruptcy that is
not dismissed within sixty (60) days after the effective filing date
thereof); or is or becomes insolvent; or admits of a general
inability to pay its debts as they become due.
5.3 This Agreement shall terminate immediately upon any of the
following events, without the need for further action on the part of
Ijob, (i) if Customer breaches any of its obligations under this
Agreement relating to Ijob's intellectual property rights or
confidentiality in or to the Program Products or relating to export
controls of the Program Products or (ii) if Customer fails to cure
any other obligation it owes to Ijob pursuant to the terms of this
Agreement within thirty (30) days after receipt of written notice
thereof from Ijob.
6. OWNERSHIP. Nothing in this Agreement shall be deemed to give
Customer ownership rights in or title to all or any portion of the
Program Products. Customer acknowledges that the Program Products
are proprietary to ijob, or third parties from whom Ijob has obtained
a right to use and distribute, and that the sole and exclusive title,
right and interest in and to the Program Products and all related
documentation and any alterations, new releases, new versions or any
other modifications or Enhancements, or Updates of the Program
Products and any copies thereof and any and all documentation
relating thereto are and shall remain in Ijob, or such third parties
from whom Ijob has obtained a right to use and distribute the same.
All applicable legal and statutory rights in the Program Products,
Source code, Executable code, patents, and copyrights are and shall
remain the property of Ijob, or third parties from whom Ijob has
obtained a right to use and distribute the same. Nothing in this
Agreement shall preclude Ijob from developing Program Products or
Documentation which are competitive, irrespective of their
similarity, to Program Products or Documentation which might be
produced for or provided to Customer pursuant to this Agreement.
7. CONFIDENTIALITY. The Program Products contains confidential
information protected by copyright, trade secret and trademark laws.
The Customer may not remove or alter ownership and copyright notices
or such other notices on or in the media or the Program Products.
Customer shall take all reasonable steps to protect and maintain the
confidentiality of the Agreement and the Program Products. The
Customer shall not disclose this Agreement or any portion of the
Program Products to any person other than its own employees who have
a need to use such Program Products in furtherance of the Customer's
business. The Customer shall advise each of its employees with any
such access of such confidentiality requirements. The provisions of
this Agreement relating to confidentiality shall survive the
termination of this Agreement. Customer shall take or cause to be
taken all reasonable precautions to hold in confidence, and to
prevent the disclosure or communication to third parties of, and
shall not disclose or communicate to third parties, without Ijob's
prior written consent, all information, data and know-how pertaining
to the design and operation of the Program Products, including, but
not limited to, Source and Executable Code, tapes, machine listings
and flowcharts and documentation relating thereto.
8. DISCLAIMER OF ALL WARRANTIES. THE PROGRAM PRODUCTS ARE
DELIVERED TO CUSTOMER AS IS, WHERE IS. IJOB DISCLAIMS ANY AND ALL
WARRANTIES, OR CONDITIONS, OR REPRESENTATIONS (EXPRESS OR IMPLIED,
ORAL OR WRITTEN), WITH RESPECT TO THE PROGRAM PRODUCTS OR ANY PART
THEREOF, INCLUDING ANY AND ALL IMPLIED WARRANTIES OR CONDITIONS OF
TITLE, NONINFRINGEMENT, MERCHANTABILITY, OR FITNESS FOR A PARTICULAR
PURPOSE (WHETHER OR NOT IJOB KNOWS, HAS REASON TO KNOW, HAS BEEN
ADVISED, OR IS OTHERWISE IN FACT AWARE OF ANY SUCH PURPOSE), WHETHER
ALLEGED TO ARISE BY LAW, BY REASON OF CUSTOM OR USAGE IN THE TRADE,
OR BY COURSE OF DEALING, OR BY COURSE OF PERFORMANCE UNDER ANY OTHER
CONTRACT BETWEEN THE PARTIES HERETO. IN ADDITION, IJOB EXPRESSLY
DISCLAIMS ANY WARRANTY OR REPRESENTATION TO ANY PERSON OTHER THAN
CUSTOMER WITH RESPECT TO THE PROGRAM PRODUCTS OR ANY PART THEREOF.
9. IN NO EVENT SHALL IJOB BE LIABLE TO CUSTOMER NOR TO ANY PERSON
CLAIMING RIGHTS DERIVED FROM CUSTOMER'S RIGHTS FOR ANY DAMAGES OF ANY
KIND OR NATURE, INCLUDING WITHOUT LIMITING THE GENERALITY OF THE
FOREGOING, INCIDENTAL, CONSEQUENTIAL AND EXEMPLARY DAMAGES..
10 Ijob and Customer each acknowledge that the provisions of this
Agreement were negotiated to reflect an informed, voluntary
allocation between them of all risks (both known and unknown)
associated with the transactions associated with this Agreement. The
warranty disclaimers and limitations in this Agreement are intended
to limit the circumstances of liability. The remedy limitations, and
the limitations of liability, are separately intended to limit the
forms of relief available to Customer.
11. OTHER PROVISIONS.
11.1 ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between Ijob and Customer concerning the subject matter
hereof. No prior or contemporaneous representations, inducements,
promises, or agreements, oral or otherwise, between Ijob and customer
with reference thereto will be of any force or effect.
11.2 MODIFICATION. No modification, amendment or waiver of any of
the provisions of this Agreement, and no prior approval required by
this Agreement, shall be effective unless in writing signed by the
parties. Writings signed on behalf of Ijob shall be signed by an
officer of the corporation. Any provision of Customer's purchase
order or other request for products or services under this Agreement
that is in any way inconsistent with or in addition to the terms and
conditions of this Agreement, shall not bind Ijob. Ijob's failure to
object to any such provision shall not be construed as a waiver of
the terms and conditions of this Agreement nor as acceptance of any
such provision.
11.3 CHOICE OF LAW. This Agreement shall be governed by the laws of
the State of Oklahoma and the venue of any action for enforcement of
any of the terms covenants or conditions of this Agreement, or
otherwise, shall be in the State of Oklahoma.
11.4 ARBITRATION. Any controversy or claim arising out of or
relating to this Agreement, or its breach, or its validity or
interpretation, except claims for injunctive relief and claims
involving necessary third parties who refuse to participate, shall be
settled by binding arbitration in accordance with the then current
Commercial Arbitration Rules of the American Arbitration Association
("AAA"). The location for the arbitration shall be in Oklahoma
County, Oklahoma. Such arbitration shall be heard and determined by
a panel of three (3) arbitrators in accordance with the then current
rules or regulations of the AAA relating to commercial disputes. One
arbitrator shall be appointed by each party to serve on the panel.
One neutral arbitrator shall be appointed by the AAA and shall serve
as chair-person of the three arbitrator panel. Such neutral
arbitrator shall be an attorney with experience in handling disputes
relating to software license agreements. The arbitration award shall
be binding on the parties and may be enforced in any court of
competent jurisdiction. The prevailing party in such arbitration
shall be entitled to recover its reasonable attorney fees and costs
incurred in such arbitration proceeding.
11.5 ASSIGNMENT. Customer may not assign this Agreement or the
rights and obligations created hereunder without the prior written
consent Ijob.
11.6 BINDING. This Agreement is binding on, and inures to the
benefit of, Ijob, the Customer, and their respective successors and
assigns to the extent permitted by this Agreement.
11.7 COMPLIANCE WITH LAWS. Each party shall comply with all
applicable laws and regulations.
11.8 FORCE MAJEURE. Ijob shall not be responsible for failure of
performance due to causes beyond its control, including, but not
limited to, accidents, acts of God, labor disputes, or the actions of
any Government agency.
11.9 CAPTIONS. The captions of the various paragraphs herein are for
convenience only, and they are not intended to be any part of the
body or text of this Agreement, nor are they intended to be referred
to in construing any of the provisions hereof.
11.10 COUNTERPARTS. This Agreement may be executed in any number
of counterparts, any of which shall be deemed to be an original.
11.11 INDEPENDENT CONTRACTORS. Ijob and the Customer are
strictly independent contractors. Neither party has the right to
bind the other in any manner, and nothing in this Agreement shall be
interpreted to make either party the agent or legal representative of
the other or to make the parties joint venturers or partners.
11.12 JOINT EFFORTS. This Agreement has been prepared and
negotiations in connection therewith have been carried on by the
joint efforts of the parties to this Agreement. This Agreement is to
be construed simply and fairly and not strictly for or against any of
the parties to this Agreement.
11.13 ATTORNEY FEES. In the event that litigation or arbitration
is instituted between the parties in connection with any controversy
or dispute arising from, under or related to this Agreement the
prevailing party in such litigation shall be entitled to recover its
reasonable attorney fees and costs, including without limitation,
deposition costs relating to such litigation and further including,
without limitation, any such attorney fees or costs incurred as a
result of any appeal related to such litigation.
11.14 AUDIT. In furtherance of any and all of Ijob's rights
under this Agreement ijob may, at its expense and without notice to
the Customer, but during the Customer's regular business hours, enter
upon the Customer's premises to audit the number of copies of Program
Products made under this Agreement and the Customer's compliance with
the other provisions of this Agreement.
11.15 SEVERABILITY. If any provision of this Agreement shall be
invalid or unenforceable, the remaining provisions of this Agreement
shall not be affected thereby and each remaining provision shall be
valid and enforceable to the fullest extent permitted by law.
11.16 NONWAIVER. The failure of Ijob at any time to require
performance by Customer of any provision of this Agreement shall in
no way affect the right of Ijob to require performance of that
provision. Any waiver by Ijob of any breach of any provision of this
Agreement shall not be construed as a waiver of any continuing of
succeeding breach of such provision, a waiver of that provision
itself or a waiver of any right under this Agreement.
11.17 TRADEMARK USAGE. Customer shall not make any use of any of
Ijob's intellectual property, including but not limited to,
trademarks, service marks, trade names, or corporate name for any
reason or purpose without the prior express written consent of Ijob.
11.18 NOTICE. All communications and notices provided for or
permitted hereunder shall be effective when made in writing and shall
be personally delivered, mailed by certified mail, postage prepaid,
or sent by overnight courier to the addresses set forth below or to
such other address as either party shall have communicated by written
notice to the other.
The parties agree and acknowledge that they have read this agreement,
understand it, and that they shall be bound by its terms and
conditions. The "Effective Date" of the Agreement shall be the later
of the dates shown below.
ijob, INC. HUMAN TECHNOLOGIES, INC.
By: /s/ Robert Baker By: /s/ David C. Mitchell
Name: Robert Baker Name: David C. Mitchell
Its: Vice President Its: President
Date: June 12, 1997 Date: June 12, 1997
Exhibit 10.46
CONVEYANCE AGREEMENT
THIS Conveyance Agreement ("Agreement"), made and entered
into as of the 12th day of June, 1997, by and between ijob, Inc.
("ijob"), an Oklahoma corporation whose principal place of
business is 13800 Benson Road, Edmond, Oklahoma 73013 ("ijob"),
and HT Technologies, Inc., an Oklahoma corporation whose
principal place of business is 2801 E. Memorial Road, Edmond,
Oklahoma 73013 ("HT").
1. Conveyance of Rights. HT hereby transfers, grants,
conveys, assigns and relinquishes exclusively to ijob all of HT=s
right, title, and interest in and to the assets identified on
Exhibit A attached hereto, in perpetuity (or for the longest
period of time otherwise permitted by law). This Agreement is
executed pursuant to the Asset Purchase Agreement between ijob
and HT of even date herewith.
ijob, Inc. Human Technologies, Inc.
By: /s/ Robert Baker By: David C. Mitchell
Name: Robert Baker Name: David C. Mitchell
Its: Vice President Its: President
Date: June 12, 1997 Date: June 12, 1997
EXHIBIT A: ASSETS
1. All of the software programs known as "HT1", "HT2", "Hal-1"
and "ijob-Internet", including, without limiting the
generality of the foregoing, all original technical and
instructional documentation relating thereto .
2. All rights held by Human Technologies, Inc ("HT"), David
Mitchell ("Mitchell") and/or Ron Beasley ("Beasley") to the
Source and Executable Code of Programs listed in paragraph
1.
3. Assignment of all copyright powers and benefits related to
the software programs listed in paragraphs 1 and 2 held by
HT, Mitchell and/or Beasley including, but not limited to,
the right to produce, sell, modify, distribute, license, and
copy in full or part those items described in paragraphs 1
and 2. .
4. All "ijob" and "ijob.com" and HT-1, HT-2, ijob-Internet and
Hal-1 related trademarks, trade names, sales marks, logos,
marketing concepts, and trade dress of the ijob business
concept.
5. Assignment of full ownership rights, including copyright and
other intellectual property rights, in all advertising,
instructional, or technical documents, whether printed or
computerized, relating to the software programs listed in
paragraphs 1 and 2. .
6. Legal title and ownership, or assignment where appropriate,
of any and all Internet properties, including, but not
limited to, domain names, addresses, unique URL's, and
service agreements relating to software programs listed in
paragraphs 1 and 2.
7. Assignment by HT, Mitchell and Beasley to ijob of all rights
to enforce and/or recover, for infringement or other legal
claims, past, present, or future, against any third party,
any of the rights or items transferred or assigned pursuant
to this Asset Purchase Agreement.
8. The goodwill of HT's, Mitchell's and Beasley's business
efforts related to the ijob business concept, including the
exclusive right to solicit the former clients or prospective
clients of HT in relation to the ijob business concept or
ijob services transferred or assigned pursuant to this Asset
Purchase Agreement.
9. Any and all rights to apply for, acquire, or retain the
benefit of any patentable subject matter derived from or
related to the ijob business concept, that at any time was
possessed by HT, in relation to the software programs
transferred or assigned pursuant to this Asset Purchase
Agreement.
Exhibit 10.47
CONVEYANCE AGREEMENT
THIS Conveyance Agreement ("Agreement"), made and entered
into as of the 12th day of June, 1997, by and between ijob, Inc.
("ijob"), an Oklahoma corporation whose principal place of
business is 13800 Benson Road, Edmond, Oklahoma 73013 ("ijob"),
and Applied Intelligence Group, Inc., an Oklahoma corporation
whose principal place of business is 13800 Benson Road, Edmond,
Oklahoma 73013 ("AIG").
1. Conveyance of Rights. AIG hereby transfers, grants,
conveys, assigns and relinquishes exclusively to ijob all of
AIG's right, title, and interest in and to the assets identified
on Exhibit A attached hereto, in perpetuity (or for the longest
period of time otherwise permitted by law). This Agreement is
executed pursuant to the Asset Purchase Agreement between AIG and
ijob of even date herewith.
ijob, Inc. Human Technologies, Inc.
By: /s/ Robert Baker By: David C. Mitchell
Name: Robert Baker Name: David C. Mitchell
Its: Vice President Its: President
Date: June 12, 1997 Date: June 12, 1997
EXHIBIT A: ASSETS
1. All rights held by AIG to the source and executable code for
the software program known as "Hal-1" and "ijob-Internet"
software; provided however, and notwithstanding anything to the
contrary herein, any software included therein which is licensed
from any third party is not included in such software being
transferred pursuant so this Asset Purchase Agreement.
2. Assignment of copyright powers and benefits related to the
software included with the Assets being transferred pursuant to
this Asset Purchase Agreement, including, but not limited to, the
right to produce, sell, modify, distribute, license, and copy in
full or part such software except to the extent limited by any
such licenses from any third party.
3. Assignment by AIG to ijob of all rights to enforce and/or
recover, for infringement or other legal claims, past, preset, or
future, against any third party, any of the rights or items
transferred pursuant to this Asset Purchase Agreement except to
the extent limited by any such licenses from any third party.
4. Any and all rights to apply for, acquire, or retain the
benefit of any patentable subject matter derived from or
related to such software being transferred pursuant to this
Asset Purchase Agreement except to the extent limited by any
such licenses from any third party.
Exhibit 10.48
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") entered into by and
between ijob, Inc., an Oklahoma corporation, with its principal
place of business at 13800 Benson Road, Edmond, Oklahoma 73013
("ijob"), and David Mitchell, an individual residing at
, Edmond, Oklahoma ("Mitchell").
WHEREAS, ijob has acquired certain assets and operations
("Software") of Human Technologies, Inc. ("HT"), as more fully
described in an Asset Purchase Agreement of even date herewith;
WHEREAS, Mitchell is knowledgeable about said Software and
desires to become employed with ijob subject to terms and
conditions of this Agreement.
WHEREAS, Applied Intelligence Group, Inc. ("AIG") is the
sole shareholder of ijob and specifically agrees and gives its
consent to certain terms and conditions of this Agreement.
WHEREUPON, in consideration of the above premises and in
consideration of such other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, parties
agree as follows:
1. On the first day of June, 1997 ("Effective Date"),
Mitchell shall become an employee of ijob. Mitchell agrees and
understands that his employment relationship with ijob is "at-
will" and may be terminated by ijob or himself at any time for
any reason, and that upon his death or disability or upon the
sale of a controlling interest in the stock of ijob by AIG, this
Agreement and Mitchell's employment hereunder shall cease.
2. During the course of this Agreement, Mitchell shall
perform such duties, hold such titles, and report as required and
specified from time to time by the Board of Directors of ijob.
3. During the course of this Agreement, Mitchell shall
receive the gross sum of Ninety-five Hundred ($9,500.00) Dollars
per month, plus any standard employee benefits provided by ijob
in the normal course of business, while he is engaged in full-
time employment for ijob. If the Board of Directors, in its sole
discretion, determines that Mitchell does not maintain a full-
time job status with ijob in any given month(s), such salary
shall be Four Thousand ($4,000.00) Dollars gross for any such
month(s).
4. During the time that he is employed by ijob under the
terms of this Agreement, Mitchell shall maintain a position as a
member of the Board of Directors of ijob and, unless otherwise
agreed by Mitchell, during such time the number of Directors of
ijob shall not exceed three. It is agreed and understood that
AIG will vote for and elect Mitchell as a director of ijob during
his employment therewith. AIG may elect whomever it chooses as
the second ijob Director. It is agreed and understood that
during Mitchell's employment, the third ijob Director shall be a
person who is nominated by the joint agreement of AIG and
Mitchell. In the event that Mitchell's employment terminates for
any reason, the provisions of this paragraph shall immediately be
of no force and effect, and AIG shall thereafter elect such
Directors as it deems appropriate.
5. During the course his employment by ijob, Mitchell
shall not (a) compete with ijob or hold an active interest in any
competitor of ijob, (b) make any voluntary or independent use of
confidential, trade secret, trademark, copyrightable, patented or
patentable, or other proprietary business information of ijob,
including, but not limited to, customer lists, computer
programs, databases, pricing formulae, designs, research files,
or any other related information, whether or not such information
is developed by Mitchell during his employment, (c) attempt to
procure any rights adverse to ijob in any intellectual property
as listed in the preceding clause (b), or (d) engage in any
fraud, embezzlement, criminal conduct, or material breach of the
terms of this Agreement. If ijob terminates this Agreement as a
result of acts described in this paragraph, Mitchell's
termination will be "for cause" and he will be entitled to no
further compensation or benefits other than have accrued up to
the date of his termination, and will not receive severance as
described in paragraph 6 below. The restrictions of clauses (b)
and (c) within this paragraph shall survive the termination of
Mitchell's employment and shall continue to have binding effect
until all such protected rights expire by operation of law.
6. If Mitchell's employment with ijob is terminated other
than by operation of paragraph 5 of this Agreement or his death,
disability, voluntary separation or upon the sale of a
controlling interest in the stock of ijob by AIG, Mitchell will
receive severance compensation as follows;
If But Severance compensation will be. . .
employed less
at least than .
. . . . .
1 month 1 year equivalent to one year salary as defined
in para.3 above and based on his actual
earnings up to the date of separation.
1 year 3 equivalent to two years of salary as
years described above.
3 years equivalent to three years of salary as
described above.
7. Mitchell hereby represents and warrants that, as of the
date of this Agreement, he is not a party to any agreement,
contract, understanding, undertaking, or factual circumstance
which would in any way restrict or prohibit him from consenting
to or performing any of the obligations or duties created by this
Agreement.
8. The parties agree that any material breach of this
Agreement shall entitle the injured party or parties to seek
relief, including, but not limited to, damages, injunctive or
other equitable relief, declatory judgments, the costs and
attorney's fees of the successful party, accounting, and, if such
breach is willful and applicable law otherwise allows, exemplary
damages, provided, that any and all disputed claims arising from
this Agreement, other than those for equitable relief or
involving third parties who object hereto, will be submitted to
binding arbitration terms identical to those specified in
paragraph 10 of the Asset Purchase Agreement between HT/Mitchell
and ijob/AIG of even date herewith.
9. If any portion of this Agreement is construed by a
Court with appropriate jurisdiction to be invalid or
unenforceable, such finding shall not affect the remainder of the
Agreement or the validity or effect of any other terms herein,
and a reasonable valid construction of such unenforceable term,
if available, will be deemed by the parties to have been the
intended effect of such term.
10. All notices under the provisions of this Agreement
shall be deemed duly given if written and delivered personally or
mailed by postage prepaid, certified or registered mail, with
return receipt requested.
11. Neither this Agreement nor any rights or duties
hereunder may be assigned or delegated by Mitchell.
12. This Agreement contains the entire agreement of the
parties hereto on its subject matter and supersedes all previous
agreements between the parties hereto, written or oral, express
or implied, covering the subject matter hereof, except as other
documents relating to this agreement are explicitly identified
referred to, or incorporated by reference herein.
13. This Agreement and its terms may not be modified,
waived, rescinded, amended, supplemented, or altered, whether in
whole or in part, except by a written instrument signed by both
ijob and Mitchell.
14. The terms of this Agreement are effective and
enforceable as of the Effective Date, and its provisions will
continue to have binding force and effect after the event of
termination of the employment of Mitchell to the extent necessary
to fulfill the intent of each paragraph herein and consistent
with the language thereof.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the 12th day of June, 1997.
ijob, Inc. /s/ David Mitchell
David Mitchell
By: /s/ David C. Mitchell
Its: President of ijob, Inc.
Applied Intelligence Group, Inc. (consenting and agreeing only as
to terms
applicable to AIG, Inc. as shareholder
of ijob, Inc.)
By: /s/ Robert L. Barcum
Its: President
Exhibit 10.49
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
OKLAHOMA SECURITIES ACT OR THE SECURITIES LAWS OF ANY OTHER
STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND/OR THE SECURITIES LAWS OF ANY OTHER STATE OR AN
OPINION OF COUNSEL OR OTHER DOCUMENTATION SATISFACTORY TO APPLIED
INTELLIGENCE GROUP, INC. THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT OR ACTS.
STOCK OPTION AGREEMENT
OPTIONS TO PURCHASE COMMON STOCK
OF
APPLIED INTELLIGENCE GROUP, INC.
Date: June 12 , 1997
This is to certify that, for value received, David Mitchell
or any subsequent holder or holders of option rights under this
Stock Option Agreement (this "Agreement" or "Option") by virtue
of assignment or transfer (the "Holder") is entitled to purchase,
subject to the provisions of this Agreement, from Applied
Intelligence Group, Inc., an Oklahoma corporation (the
"Company"), up to THIRTY-EIGHT THOUSAND (38,000) shares of Common
Stock, $.001 par value, of the Company (the "Stock") at an
exercise price of Three Dollars and Fifty Cents ($3.50) per
share (the "Exercise Price"). With the exception of any
adjustments pursuant to Section 4 of this Agreement, the Stock
issuable upon exercise of this Option shall be in all respects
identical to the Common Stock issued and outstanding of the
Company as of the date hereof. The shares of Stock or other
securities deliverable upon such exercise, as adjusted from time
to time, are hereinafter sometimes referred to as the "Option
Securities." Unless the context otherwise requires, the term
"Option" or "Options" as used herein includes this Option and any
other Option or Options that may be issued pursuant to the
provisions of this Agreement, whether upon transfer, assignment,
partial exercise, divisions, combinations, exchange or otherwise,
and the term "Holder" or "Holders" includes any registered
transferee or transferees or registered assignee or assignees of
Holder, who in each case shall be subject to the provisions of
this Agreement, and when used with reference to Option
Securities, means the holder or holders of such Option
Securities.
SECTION 1. Exercise of Option. Subject to the provisions
of this Agreement, the Holder shall be eligible to exercise that
portion of this Option for purchase of the number of Option
Securities on or before the Expiration Date (as defined below).
This Option may be exercised in whole or in part at any time or
from time to time during the period commencing June 12, 1997
(the "Commencement Date"), and ending 5:00 P.M., Central Daylight-
Savings Time, on June 12, 1999 (the "Expiration Date"), by
presentation and surrender to Company at its principal office of
this Option and the Purchase Form annexed hereto, duly executed
and accompanied by payment, in cash, certified or official bank
check payable to the order of Company in the amount of the
Exercise Price for the number of shares of Stock (or Option
Securities) specified in such Form. Upon such exercise, Company
shall issue to the Holder one or more certificates for the shares
of Stock (or Option Securities), as appropriate. If this Option
is exercised in part only, Company shall, promptly after
presentation of this Option upon such exercise, execute and
deliver a new Option evidencing the rights of Holder thereof to
purchase the balance of the shares of Stock (or Option
Securities) purchasable hereunder upon the same terms and
conditions as herein set forth.
SECTION 2. Reservation of Shares. Company shall at all
times after the date hereof and until expiration or full exercise
of this Option reserve for issuance and delivery upon exercise of
this Option the number of Option Securities as shall be required
for issuance and delivery upon exercise of this Option.
SECTION 3. Transfer, Exchange, Assignment or Loss of
Option.
SECTION 3.1 Transferability. This Option may not be
assigned or transferred, in whole or in part, except by operation
of law or with the prior written consent of the Company (which
consent shall not be unreasonably withheld) and then only so long
as such assignment or transfer is in accordance with and subject
to the provisions of the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (said Act and
such rules and Regulations being hereinafter collectively
referred to as the "Securities Act"). Any purported transfer or
assignment made other than in accordance with this Section 3
shall be null and void and of no force and effect.
SECTION 3.2 Transfer Procedure. Any assignment permitted
hereunder shall be made by surrender of this Option to Company at
its principal office with the Assignment Form annexed hereto duly
executed and funds sufficient to pay any transfer tax. In such
event and the Company is required to and consents to such
transfer, Company shall, without charge, execute and deliver a
new Option in the name of the assignee named in such instrument
of assignment and designate the assignee as the registered holder
on the Company's records and this Option shall promptly be
canceled. This Option may be divided or combined with other
Options which carry the same rights upon presentation thereof at
the principal office of Company together with a written notice
signed by Holder hereof, specifying the names and denominations
in which new Options are to be issued.
SECTION 3.3 Loss or Destruction of this Agreement. Upon
receipt by Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Option, and (in the case
of loss, theft or destruction) of reasonably satisfactory
indemnification to Company or (in the case of mutilation)
presentation of this Option for surrender and cancellation,
Company will execute and deliver a new Option of like tenor and
date and any such lost, stolen, destroyed or mutilated Option
shall thereupon become void. This Option may be exchanged at the
option of the Holder for another Option or Options of different
denominations, of like tenor and evidencing in the aggregate the
number of shares of Stock or Option Securities purchasable
pursuant to this Option, upon surrender of this Option, with the
Assignment Form duly filled in and executed, to the Company at
its principal office, at any time or from time to time after the
close of business on the date hereof and prior to the close of
business on the Expiration Date. The Company shall promptly
cancel the surrendered Option and deliver the new Option or
Options pursuant to the provisions of this Section.
SECTION 4. Adjustment in the Number, Kind and Price of
Option Securities. The number and kind of Option Securities
purchasable upon exercise of this Option shall be subject to
adjustment from time to time upon the occurrence, after the date
hereof, of the following events:
SECTION 4.1 Stock Dividends and Splits. In the event
Company shall (i) pay a dividend in, or make a distribution of,
shares of Stock or of capital stock convertible into Stock on its
outstanding Stock, (ii) subdivide (forward split) its outstanding
shares of Stock into a greater number of such shares, or (iii)
combine (reverse split) its outstanding shares of Stock into a
smaller number of such shares, the total number of shares of
Stock purchasable upon the exercise of this Option immediately
prior thereto shall be adjusted so that the Holder shall be
entitled to receive at the same Exercise Price the number of
shares of Stock and the number of shares of capital stock
convertible into Stock which such Holder would have owned or have
been entitled to receive immediately following the happening of
such event, assuming and giving effect to the exercise of this
Option by such Holder. Any adjustment made pursuant to this
Subsection shall, in the case of a stock dividend or distribution
or a stock issuance, become effective as of the record date
therefor and, in the case of a subdivision or combination, be
made as of the effective date thereof.
SECTION 4.2 Adjustment of Option Securities. In the event
of any adjustment of the total number of shares of Stock
purchasable upon the exercise of this Option pursuant to
Subsection 4.1, the Exercise Price shall remain unchanged, but
the number of shares of capital stock or Option Securities
obtainable on exercise of this Option shall be adjusted as
provided in Subsection 4.1.
SECTION 4.3 Reorganization, Recapitalization, etc. In the
event of a capital reorganization or a reclassification of the
Stock (except as provided in Subsection 4.1 or Subsection 4.4),
the Holder of this Option, upon exercise thereof, shall be
entitled to receive, in lieu of the Stock to which he would have
become entitled upon exercise immediately prior to such
reorganization or reclassification, the shares (of any class or
classes) or other Option Securities or property of the Company
(or cash) that the Holder would have been entitled to receive at
the same Exercise Price upon such reorganization or
reclassification if this Option had been exercised immediately
prior thereto; and in any such case, appropriate provision shall
be made for the application of this Section 4 with respect to the
rights and interests thereafter of the Holder of this Option
(including, but not limited to, the allocation of the Exercise
Price between or among the Option Securities), to the end that
this Section 4 (including the adjustments of the number of shares
of Stock or other Option Securities purchasable) shall thereafter
be reflected, as nearly as reasonably practicable, in all
subsequent exercises of this Option for any shares or other
Option Securities or other property (or cash) thereafter
deliverable upon the exercise of this Option.
SECTION 4.4 Consolidation, Merger, etc. In case of any
consolidation of the Company with, or merger of the Company with,
or merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any
reclassification or change of the outstanding Stock), or in case
of any sale or conveyance to another corporation of the property
of the Company as an entirety or substantially as an entirety,
the corporation formed by such consolidation or merger or the
corporation which shall have acquired such assets, as the case
may be, shall execute and deliver to the Holder a supplement to
this Option or a new option providing that the Holder of this
Option shall have the right thereafter (until the Expiration
Date) to receive, upon exercise of this Option or any new option,
at the same Exercise Price, solely the kind and amount of shares
of Option Securities and property (or cash) receivable upon such
consolidation, merger, sale or transfer by the Holder of this
Option for the number and kind of Option Securities for which
this Option might have been exercised immediately prior to such
consolidation, merger, sale or transfer. Such supplemental
option or new option shall provide for adjustments which shall be
as nearly equivalent as may be practicable to the adjustments
provided in this Section. The above provision of this
Subsection 4.4 shall similarly apply to successive
consolidations, mergers, sales or transfers.
SECTION 4.5 Notification of Adjustment. Whenever the
Option Securities purchasable upon exercise of this Option are
modified as provided in Section 4.1 or 4.4, the Company will
promptly deliver to the Holder a certificate signed by the
Chairman of the Board, Chief Executive Officer or the President,
or a Vice President of the Company and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of
the Company setting forth the number and kind of Option
Securities purchasable and the other property (including cash)
receivable by the Holder upon exercise of this Option or any
supplemental or new option. Such certificate will state that
such adjustments in the kind of purchasable Option Securities and
other property (including cash) receivable by the Holder upon
exercise of this Option conform to the requirements of this
Section 4, and setting forth a brief statement of the facts
accounting for such adjustments. In the event, the Holder of
this Option does not agree with such determination of the Board
of Directors of the Company as set forth in the certificate, the
Company shall retain a firm of independent public accountants
acceptable to the Holder to make any computation required under
this Section 4, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made
under this Section 4.
SECTION 5. Redemption and Dividend Consent Requirements.
This Option may not be redeemed by Company. During the period
from the date hereof until exercise of this Option in full or
through the Expiration Date, the Company shall not declare any
dividends payable in cash or property (other than in liquidation,
voluntary or involuntary dissolution or winding-up of the
Company) without the prior written consent of the Holder of this
Option.
SECTION 6. Notice of Certain Corporation Action. In case
the Company after the date hereof shall propose to effect any
consolidation or merger to which the Company is a party and for
which approval of any shareholders of the Company is required, or
any sale, transfer or other disposition of its property and
assets substantially as an entirety, or the liquidation,
voluntary or involuntary dissolution or winding-up of the
Company, then, in each such case, the Company shall mail (by
first-class, postage prepaid mail) to the Holder of this Option
notice of such proposed action, which notice shall specify the
date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition,
liquidation, voluntary or involuntary dissolution or winding-up
shall take place or commence, as the case may be, and which shall
also specify any record date for determination of holders of the
capital stock of the Company entitled to vote thereon or
participate therein and shall set forth such facts with respect
thereto as shall be reasonably necessary to indicate any
adjustments in the number or kind of Option Securities
purchasable upon exercise of this Option which will be required
as a result of such action, and the Holder may thereafter
exercise this Option. Such notice shall be filed and mailed in
the case of any action covered by this Section 6, at least 20
days prior to the earlier of (i) the date on which such
reclassification, reorganization, consolidation, merger, sale,
transfer, other disposition, liquidation, voluntary or
involuntary dissolution or winding-up is expected to become
effective, (ii) the date on which it is expected that holders of
shares of the capital stock of record on such date shall be
entitled to exchange their shares for securities or other
property deliverable upon such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition,
liquidation, voluntary or involuntary dissolution or winding-up,
or (iii) the record date for determination of holders of the
capital stock of the Company entitled to vote on such action or
participate in such action. Failure of the Holder to exercise
this Option in whole or in part prior to any corporate action as
described in this Section 6 shall not affect or alter the rights
of the Holder as set forth in this Option.
SECTION 7. Acquisition for Investment Purposes. 1The
Holder represents and acknowledges to the Company and its
officers and directors that the Option Securities at the time of
issuance to the Holder upon exercise of this Option (i) will be
acquired by the Holder for investment purposes only without the
intent to resell such Option Securities, (ii) will be issued
pursuant to exemption from registration under the Securities Act
and any applicable state securities act, (iii) will not be
transferred except pursuant to registration under the Securities
Act and any applicable state securities act unless pursuant to
exemption from registration under such acts, and (iv) the
certificates evidencing the Option Securities will bear
appropriate restrictive transfer legends as required pursuant to
the Securities Act and any applicable state securities act.
SECTION 8. Registration under Securities Act. The Company
shall not be obligated at any time to register the Option
Securities under the Securities Act or any applicable state
securities act.
SECTION 9 Governing Law. This Option shall be construed in
accordance with the laws of the State of Oklahoma applicable to
contracts executed and to be performed wholly within such state.
SECTION 10 Notice. Notices and other communications to be
given to Holder of this Option shall be delivered by hand or by
first-class mail, postage prepaid, to
Mr. David Mitchell
209 Bristol Court
Edmond, OK 73034
(until another address is filed in writing by the Holder with the
Company). Notices or other communications to Company shall be
deemed to have been sufficiently given if delivered by hand or by
first-class mail, postage prepaid to Company at
Applied Intelligence Group, Inc.
13800 Benson Road
Edmond, Oklahoma 73013-6417
Attention: Robert L. Barcum
or such other address as the Company shall have designated by
written notice to such registered owner is herein provided.
Notice by mail shall be deemed given when deposited in the United
States mail, postage prepaid, as herein provided.
SECTION 11. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company shall bind
and inure to the benefit of its successors and assigns hereunder,
and all covenants and provisions of this Agreement by or for the
benefit of the Holder of this Agreement shall bind and inure to
the benefit of the Holder of this Agreement.
SECTION 12. Termination. This Agreement shall terminate as
of the close of business on the earlier of the Expiration Date,
or such earlier date upon which the Options evidenced by this
Agreement shall have been exercised in full. However, with
respect to the Holders representations set forth in Section 7,
such Section and representations shall continue on and after the
Expiration Date if this Option is fully or partially exercised on
or before the Expiration Date.
SECTION 13. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, and its respective successors and assigns
hereunder and the registered Holder of this Agreement and the
Option hereunder any legal or equitable right, remedy or claim
under this Agreement, but this Agreement shall be for the sole
and exclusive benefit of the Company and its respective
successors and assigns hereunder and the registered Holder of
this Agreement and Option hereunder.
IN WITNESS WHEREOF, Company has executed this Agreement on
June 12, 1997.
APPLIED INTELLIGENCE GROUP, INC.
By: /s/ Robert N. Baker
Robert N. Baker,
Vice President
By: /s/ David C. Mitchell
David C. Mitchell
PURCHASE FORM
(TO BE EXECUTED BY THE HOLDER OF THE STOCK OPTION IF EXERCISED IN
WHOLE OR IN PART)
To: APPLIED INTELLIGENCE GROUP, INC.
The undersigned (
)
Please insert Social Security
or other number of Subscriber
hereby irrevocably elects to exercise the right of purchase
represented by the Stock Option (the "Option") to which this
Purchase Form is attached, for, and to purchase thereunder,
( ) shares of Common Stock provided for therein and
tenders payment herewith to the order of APPLIED INTELLIGENCE
GROUP, INC. in the amount of $
. In accordance with Section 1 of the Stock Option Agreement,
the undersigned requests that certificates for such shares of
Common Stock be issued as follows:
Name:
Address:
Deliver to:
Address:
and if said number of shares of Common Stock shall not be all the
shares of Common Stock purchasable thereunder, that a new Stock
Option for the balance remaining of shares of Common Stock
purchasable under the Option be registered in the name of, and
delivered to the undersigned at the address stated below:
Name:
Address:
Deliver to:
Address:
Dated: , Signature
__________________________________________________
(Signature must conform in all
respects to the name of Holder as
specified on the face of the Stock
Option in every particular, without
alteration, enlargement or any
change whatever.)
ASSIGNMENT FORM
(TO BE EXECUTED BY THE HOLDER OF THE STOCK OPTION ONLY UPON ASSI
GNMENT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
("Assignee")
the right to purchase
( ) shares
of Common Stock subject to purchase under the Stock Option
(the "Option") to which this Assignment is attached, and
appoints
Attorney to transfer said Option or portion thereof on the books
of APPLIED INTELLIGENCE GROUP, INC. with the full power of
substitution in the premises. In accordance with Section 3 of
the Stock Option Agreement, the undersigned requests that the
Company execute, issue and deliver a new Stock Option evidencing
the rights of the Assignee to purchase such assigned shares of
Common Stock to Assignee as follows:
Name:
Address:
Deliver to:
Address:
and if said number of shares of Common Stock shall not be all the
shares of Common Stock purchasable under the Option, that the
Company execute, issue and deliver a new Stock Option for the
balance remaining of shares of Common Stock purchasable under the
Option to be registered in the name of, and delivered to the
undersigned at the address stated below:
Name:
Address:
Deliver to:
Address:
Dated: , .
In the presence of:
Signature
Signature Guaranteed:
__________________________________________________
(Signature must conform in all
respects to the name of Holder as
specified on the face of the Stock
Option in every particular, without
alteration, enlargement or any
change whatsoever, and the
signature must be guaranteed in the
usual manner.)
_______________________________
1
The Holder shall not have the right to demand and require and the
Company shall not have any obligation to register the Options
Securities under the Securities Act or any applicable state
securities act.
Exhibit 10.50
THE SECURITIES REPRESENTED BY THIS AGREEMENT HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, THE
OKLAHOMA SECURITIES ACT OR THE SECURITIES LAWS OF ANY OTHER
STATE. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE SOLD OR TRANSFERRED FOR VALUE IN THE ABSENCE OF AN
EFFECTIVE REGISTRATION OF THEM UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, AND/OR THE SECURITIES LAWS OF ANY OTHER STATE OR AN
OPINION OF COUNSEL OR OTHER DOCUMENTATION SATISFACTORY TO APPLIED
INTELLIGENCE GROUP, INC. THAT SUCH REGISTRATION IS NOT REQUIRED
UNDER SUCH ACT OR ACTS.
COMMON STOCK PURCHASE WARRANT AGREEMENT
FOR THE PURCHASE COMMON STOCK
OF
APPLIED INTELLIGENCE GROUP, INC.
Date: June 12, 1997
This is to certify that, for value received, Ron Beasley or
any subsequent holder or holders of warrant rights hereunder (the
"Warrants") by virtue of assignment or transfer (the "Holder") is
entitled to purchase, subject to the provisions of this Common
Stock Purchase Warrant Agreement (this "Agreement"), from Applied
Intelligence Group, Inc., an Oklahoma corporation (the
"Company"), up to TWELVE THOUSAND (12,000) shares of Common
Stock, $.001 par value, of the Company (the "Stock") at an
exercise price of Three Dollars & Fifty Cents ($3.50 ) per
share (the "Exercise Price"). With the exception of any
adjustments pursuant to Section 4 of this Agreement, the Stock
issuable upon exercise of this Warrant shall be in all respects
identical to the Common Stock issued and outstanding of the
Company as of the date hereof. The shares of Stock or other
securities deliverable upon such exercise, as adjusted from time
to time, are hereinafter sometimes referred to as the "Warrant
Securities." Unless the context otherwise requires, the term
"Warrant" or "Warrants" as used herein includes the Warrants and
any other warrant or warrants that may be issued pursuant to the
provisions of this Agreement, whether upon transfer, assignment,
partial exercise, divisions, combinations, exchange or otherwise,
and the term "Holder" or "Holders" includes any registered
transferee or transferees or registered assignee or assignees of
Holder, who in each case shall be subject to the provisions of
this Agreement, and when used with reference to Warrant
Securities, means the holder or holders of such Warrant
Securities.
SECTION 1. Exercise of Warrants. Subject to the provisions
of this Agreement, the Holder shall be eligible to exercise that
portion of the Warrants for purchase of the number of Warrant
Securities on or before the Expiration Date (as defined below).
The Warrants may be exercised in whole or in part at any time or
from time to time during the period commencing June 12, 1997
(the "Commencement Date"), and ending 5:00 P.M., Central Daylight-
Savings Time, on June 12, 1999 (the "Expiration Date"), by
presentation and surrender to Company at its principal office of
the Warrants and the Purchase Form annexed hereto, duly executed
and accompanied by payment, in cash, certified or official bank
check payable to the order of Company in the amount of the
Exercise Price for the number of shares of Stock (or Warrant
Securities) specified in such Form. Upon such exercise, Company
shall issue to the Holder one or more certificates for the shares
of Stock (or Warrant Securities), as appropriate. If the
Warrants are exercised in part only, Company shall, promptly
after presentation of the Warrants upon such exercise, execute
and deliver new Warrants evidencing the rights of Holder thereof
to purchase the balance of the shares of Stock (or Warrant
Securities) purchasable hereunder upon the same terms and
conditions as herein set forth.
SECTION 2. Reservation of Shares. Company shall at all
times after the date hereof and until expiration or full exercise
of the Warrants reserve for issuance and delivery upon exercise
of the Warrants the number of Warrant Securities as shall be
required for issuance and delivery upon exercise of the Warrants.
SECTION 3. Transfer, Exchange, Assignment or Loss of the
Warrants.
SECTION 3.1 Transferability. The Warrants may not be
assigned or transferred, in whole or in part, except by operation
of law or with the prior written consent of the Company (which
consent shall not be unreasonably withheld) and then only so long
as such assignment or transfer is in accordance with and subject
to the provisions of the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder (said Act and
such rules and Regulations being hereinafter collectively
referred to as the "Securities Act"). Any purported transfer or
assignment made other than in accordance with this Section 3
shall be null and void and of no force and effect.
SECTION 3.2 Transfer Procedure. Any assignment permitted
hereunder shall be made by surrender of the Warrants to Company
at its principal office with the Assignment Form annexed hereto
duly executed and funds sufficient to pay any transfer tax. In
such event and the Company is required to and consents to such
transfer, Company shall, without charge, execute and deliver new
Warrants in the name of the assignee named in such instrument of
assignment and designate the assignee as the registered holder on
the Company's records and the Warrants shall promptly be
canceled. The Warrants may be divided or combined with other
Warrants which carry the same rights upon presentation thereof at
the principal office of Company together with a written notice
signed by Holder hereof, specifying the names and denominations
in which new Warrants are to be issued.
SECTION 3.3 Loss or Destruction of this Agreement. Upon
receipt by Company of evidence satisfactory to it of the loss,
theft, destruction or mutilation of this Agreement, and (in the
case of loss, theft or destruction) of reasonably satisfactory
indemnification to Company or (in the case of mutilation)
presentation of this Agreement for surrender and cancellation,
Company will execute and deliver a new Agreement of like tenor
and date and any such lost, stolen, destroyed or mutilated
Agreement shall thereupon become void. This Agreement may be
exchanged at the option of the Holder for another agreement or
agreements of different Warrant denominations, of like tenor and
evidencing in the aggregate the number of shares of Stock or
Warrant Securities purchasable pursuant to this Agreement, upon
surrender of this Agreement, with the Assignment Form duly filled
in and executed, to the Company at its principal office, at any
time or from time to time after the close of business on the date
hereof and prior to the close of business on the Expiration Date.
The Company shall promptly cancel this Agreement upon surrender
and deliver the new agreement evidencing the Warrant or Warrants
pursuant to the provisions of this Section.
SECTION 4. Adjustment in the Number, Kind and Price of
Option Securities. The number and kind of Warrant Securities
purchasable upon exercise of the Warrants shall be subject to
adjustment from time to time upon the occurrence, after the date
hereof, of the following events:
SECTION 4.1 Stock Dividends and Splits. In the event
Company shall (i) pay a dividend in, or make a distribution of,
shares of Stock or of capital stock convertible into Stock on its
outstanding Stock, (ii) subdivide (forward split) its outstanding
shares of Stock into a greater number of such shares, or (iii)
combine (reverse split) its outstanding shares of Stock into a
smaller number of such shares, the total number of shares of
Stock purchasable upon the exercise of the Warrants immediately
prior thereto shall be adjusted so that the Holder shall be
entitled to receive at the same Exercise Price the number of
shares of Stock and the number of shares of capital stock
convertible into Stock which such Holder would have owned or have
been entitled to receive immediately following the happening of
such event, assuming and giving effect to the exercise of the
Warrants by such Holder. Any adjustment made pursuant to this
Subsection shall, in the case of a stock dividend or distribution
or a stock issuance, become effective as of the record date
therefor and, in the case of a subdivision or combination, be
made as of the effective date thereof.
SECTION 4.2 Adjustment of Warrant Securities. In the event
of any adjustment of the total number of shares of Stock
purchasable upon the exercise of the Warrants pursuant to
Subsection 4.1, the Exercise Price shall remain unchanged, but
the number of shares of capital stock or Warrant Securities
obtainable on exercise of the Warrants shall be adjusted as
provided in Subsection 4.1.
SECTION 4.3 Reorganization, Recapitalization, etc. In the
event of a capital reorganization or a reclassification of the
Stock (except as provided in Subsection 4.1 or Subsection 4.4),
the Holder of the Warrants, upon exercise thereof, shall be
entitled to receive, in lieu of the Stock to which he would have
become entitled upon exercise immediately prior to such
reorganization or reclassification, the shares (of any class or
classes) or other Warrant Securities or property of the Company
(or cash) that the Holder would have been entitled to receive at
the same Exercise Price upon such reorganization or
reclassification if the Warrants had been exercised immediately
prior thereto; and in any such case, appropriate provision shall
be made for the application of this Section 4 with respect to the
rights and interests thereafter of the Holder of the Warrants
(including, but not limited to, the allocation of the Exercise
Price between or among the Warrant Securities), to the end that
this Section 4 (including the adjustments of the number of shares
of Stock or other Warrant Securities purchasable) shall
thereafter be reflected, as nearly as reasonably practicable, in
all subsequent exercises of the Warrants for any shares or other
Warrant Securities or other property (or cash) thereafter
deliverable upon the exercise of the Warrants.
SECTION 4.4 Consolidation, Merger, etc. In case of any
consolidation of the Company with, or merger of the Company with,
or merger of the Company into, another corporation (other than a
consolidation or merger which does not result in any
reclassification or change of the outstanding Stock), or in case
of any sale or conveyance to another corporation of the property
of the Company as an entirety or substantially as an entirety,
the corporation formed by such consolidation or merger or the
corporation which shall have acquired such assets, as the case
may be, shall execute and deliver to the Holder a supplement to
the Warrants or a new option providing that the Holder of the
Warrants shall have the right thereafter (until the Expiration
Date) to receive, upon exercise of the Warrants or any new
option, at the same Exercise Price, solely the kind and amount of
shares of Warrant Securities and property (or cash) receivable
upon such consolidation, merger, sale or transfer by the Holder
of the Warrants for the number and kind of Warrant Securities for
which the Warrants might have been exercised immediately prior to
such consolidation, merger, sale or transfer. Such supplemental
warrants or new warrants shall provide for adjustments which
shall be as nearly equivalent as may be practicable to the
adjustments provided in this Section. The above provision of
this Subsection 4.4 shall similarly apply to successive
consolidations, mergers, sales or transfers.
SECTION 4.5 Notification of Adjustment. Whenever the
Warrant Securities purchasable upon exercise of the Warrants are
modified as provided in Section 4.1 or 4.4, the Company will
promptly deliver to the Holder a certificate signed by the
Chairman of the Board, Chief Executive Officer or the President,
or a Vice President of the Company and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant Secretary of
the Company setting forth the number and kind of Warrant
Securities purchasable and the other property (including cash)
receivable by the Holder upon exercise of the Warrants or any
supplemental or new option. Such certificate will state that
such adjustments in the kind of purchasable Warrant Securities
and other property (including cash) receivable by the Holder upon
exercise of the Warrants conform to the requirements of this
Section 4, and setting forth a brief statement of the facts
accounting for such adjustments. In the event, the Holder of the
Warrants does not agree with such determination of the Board of
Directors of the Company as set forth in the certificate, the
Company shall retain a firm of independent public accountants
acceptable to the Holder to make any computation required under
this Section 4, and a certificate signed by such firm shall be
conclusive evidence of the correctness of any computation made
under this Section 4.
SECTION 5. Redemption and Dividend Consent Requirements.
The Warrants may not be redeemed by Company. During the period
from the date hereof until exercise of the Warrants in full or
through the Expiration Date, the Company shall not declare any
dividends payable in cash or property (other than in liquidation,
voluntary or involuntary dissolution or winding-up of the
Company) without the prior written consent of the Holder of this
Option.
SECTION 6. Notice of Certain Corporation Action. In case
the Company after the date hereof shall propose to effect any
consolidation or merger to which the Company is a party and for
which approval of any shareholders of the Company is required, or
any sale, transfer or other disposition of its property and
assets substantially as an entirety, or the liquidation,
voluntary or involuntary dissolution or winding-up of the
Company, then, in each such case, the Company shall mail (by
first-class, postage prepaid mail) to the Holder of the Warrants
notice of such proposed action, which notice shall specify the
date on which such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition,
liquidation, voluntary or involuntary dissolution or winding-up
shall take place or commence, as the case may be, and which shall
also specify any record date for determination of holders of the
capital stock of the Company entitled to vote thereon or
participate therein and shall set forth such facts with respect
thereto as shall be reasonably necessary to indicate any
adjustments in the number or kind of Warrant Securities
purchasable upon exercise of the Warrants which will be required
as a result of such action, and the Holder may thereafter
exercise the Warrants. Such notice shall be filed and mailed in
the case of any action covered by this Section 6, at least 20
days prior to the earlier of (i) the date on which such
reclassification, reorganization, consolidation, merger, sale,
transfer, other disposition, liquidation, voluntary or
involuntary dissolution or winding-up is expected to become
effective, (ii) the date on which it is expected that holders of
shares of the capital stock of record on such date shall be
entitled to exchange their shares for securities or other
property deliverable upon such reclassification, reorganization,
consolidation, merger, sale, transfer, other disposition,
liquidation, voluntary or involuntary dissolution or winding-up,
or (iii) the record date for determination of holders of the
capital stock of the Company entitled to vote on such action or
participate in such action. Failure of the Holder to exercise
the Warrants in whole or in part prior to any corporate action as
described in this Section 6 shall not affect or alter the rights
of the Holder as set forth in this Agreement.
SECTION 7. Acquisition for Investment Purposes. 1The
Holder represents and acknowledges to the Company and its
officers and directors that the Warrant Securities at the time of
issuance to the Holder upon exercise of the Warrants (i) will be
acquired by the Holder for investment purposes only without the
intent to resell such Warrant Securities, (ii) will be issued
pursuant to exemption from registration under the Securities Act
and any applicable state securities act, (iii) will not be
transferred except pursuant to registration under the Securities
Act and any applicable state securities act unless pursuant to
exemption from registration under such acts, and (iv) the
certificates evidencing the Warrant Securities will bear
appropriate restrictive transfer legends as required pursuant to
the Securities Act and any applicable state securities act.
SECTION 8. Registration under Securities Act. The Company
shall not be obligated at any time to register the Warrant
Securities under the Securities Act or any applicable state
securities act.
SECTION 9 Governing Law. This Option shall be construed in
accordance with the laws of the State of Oklahoma applicable to
contracts executed and to be performed wholly within such state.
SECTION 10 Notice. Notices and other communications to be
given to Holder of this Option shall be delivered by hand or by
first-class mail, postage prepaid, to
Mr. Ron Beasley
2904 Julies Trail
Edmond, OK 73003
(until another address is filed in writing by the Holder with the
Company). Notices or other communications to Company shall be
deemed to have been sufficiently given if delivered by hand or by
first-class mail, postage prepaid to Company at
Applied Intelligence Group, Inc.
13800 Benson Road
Edmond, Oklahoma 73013-6417
Attention: Robert L. Barcum
or such other address as the Company shall have designated by
written notice to such registered owner is herein provided.
Notice by mail shall be deemed given when deposited in the United
States mail, postage prepaid, as herein provided.
SECTION 11. Successors. All the covenants and provisions
of this Agreement by or for the benefit of the Company shall bind
and inure to the benefit of its successors and assigns hereunder,
and all covenants and provisions of this Agreement by or for the
benefit of the Holder of this Agreement shall bind and inure to
the benefit of the Holder of this Agreement.
SECTION 12. Termination. This Agreement shall terminate as
of the close of business on the earlier of the Expiration Date,
or such earlier date upon which the Warrants evidenced by this
Agreement shall have been exercised in full. However, with
respect to the Holders representations set forth in Section 7,
such Section and representations shall continue on and after the
Expiration Date if the Warrants are fully or partially exercised
on or before the Expiration Date.
SECTION 13. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation
other than the Company, and its respective successors and assigns
hereunder and the registered Holder of this Agreement and the
Warrants hereunder any legal or equitable right, remedy or claim
under this Agreement, but this Agreement shall be for the sole
and exclusive benefit of the Company and its respective
successors and assigns hereunder and the registered Holder of
this Agreement and the Warrants hereunder.
IN WITNESS WHEREOF, Company has executed this Agreement on
June 12, 1997.
APPLIED INTELLIGENCE GROUP, INC.
By: /s/ Robert N. Baker
Robert N. Baker,
Vice President
/s/ Ron Beasley
Ron Beasley
PURCHASE FORM
(TO BE EXECUTED BY THE HOLDER OF THE COMMON STOCK
PURCHASE WARRANT AGREEMENT IF EXERCISED IN WHOLE OR IN PART)
To: APPLIED INTELLIGENCE GROUP, INC.
The undersigned (
)
Please insert Social Security
or other number of Subscriber
hereby irrevocably elects to exercise the right of purchase
represented by the Common Stock Purchase Warrant Agreement to
which this Purchase Form is attached, for, and to purchase
thereunder,
( ) shares of Common Stock provided for therein
and tenders payment herewith to the order of APPLIED INTELLIGENCE
GROUP, INC. in the amount of $ . In accordance
with Section 1 of the Common Stock Purchase Warrant Agreement,
the undersigned requests that certificates for such shares of
Common Stock be issued as follows:
Name:
Address:
Deliver to:
Address:
and if said number of shares of Common Stock shall not be all the
shares of Common Stock purchasable thereunder, that a new Common
Stock Purchase Warrant Agreement for the balance remaining of
shares of Common Stock purchasable under the Common Stock
Purchase Warrant Agreement be registered in the name of, and
delivered to the undersigned at the address stated below:
Name:
Address:
Deliver to:
Address:
Dated: , Signature
___________________________________
_______________
(Signature must conform in all
respects to the name of Holder as
specified on the face of the Common
Stock Purchase Warrant Agreement in
every particular, without
alteration, enlargement or any
change whatever.)
ASSIGNMENT FORM
(TO BE EXECUTED BY THE HOLDER OF THE COMMON STOCK
PURCHASE WARRANT AGREEMENT ONLY UPON ASSIGNMENT)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
("Assignee") the
right to purchase
( ) shares of Common Stock subject to purchase
under the Common Stock Purchase Warrant Agreement (the
"Warrants") to which this Assignment is attached, and appoints
Attorney to transfer said Warrants or any portion thereof on the
books of APPLIED INTELLIGENCE GROUP, INC. with the full power of
substitution in the premises. In accordance with Section 3 of
the Common Stock Purchase Warrant Agreement, the undersigned
requests that the Company execute, issue and deliver a new common
stock purchase warrant agreement evidencing the rights of the
Assignee to purchase such assigned shares of Common Stock to
Assignee as follows:
Name:
Address:
Deliver to:
Address:
and if said number of shares of Common Stock shall not be all the
shares of Common Stock purchasable under Common Stock Purchase
Warrant Agreement, that the Company execute, issue and deliver a
new common stock purchase warrant agreement for the balance
remaining of shares of Common Stock purchasable under the
Warrants to be registered in the name of, and delivered to the
undersigned at the address stated below:
Name:
Address:
Deliver to:
Address:
Dated: , .
In the presence of:
Signature
Signature Guaranteed:
__________________________________________________
(Signature must conform in all
respects to the name of Holder as
specified on the face of the Common
Stock Purchase Warrant Agreement in
every particular, without
alteration, enlargement or any
change whatsoever, and the
signature must be guaranteed in the
usual manner.)
_______________________________
1
The Holder shall not have the right to demand and require and the
Company shall not have any obligation to register the Options
Securities under the Securities Act or any applicable state
securities act.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATIN EXTRACTED FROM THE BALANCE
SHEET FOR JUNE 30, 1997 AND THE STATEMENT OF OPERATIONS FOR THE SIX MONTHS EDNED
JUNE 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FIANCIAL
STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 830,487
<SECURITIES> 0
<RECEIVABLES> 1,420,955
<ALLOWANCES> 4,036
<INVENTORY> 11,338
<CURRENT-ASSETS> 2,670,803
<PP&E> 3,219,295
<DEPRECIATION> 1,513,558
<TOTAL-ASSETS> 6,366,449
<CURRENT-LIABILITIES> 2,136,739
<BONDS> 0
0
0
<COMMON> 2,727
<OTHER-SE> 3,831,570
<TOTAL-LIABILITY-AND-EQUITY> 6,366,449
<SALES> 0
<TOTAL-REVENUES> 3,925,936
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 5,255,952
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 30,102
<INCOME-PRETAX> (1,360,118)
<INCOME-TAX> (451,845)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (908,273)
<EPS-PRIMARY> (.33)
<EPS-DILUTED> 0
</TABLE>
