SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
Date of Report: November 16, 1999
ASA INTERNATIONAL LTD
(Exact Name of Registrant as Specified in Charter)
DELAWARE 0-14741 02-0398205
(State or Other Jurisdiction (Commission (I.R.S. Employer
of Incorporation) File Number) Identification
Number)
10 Speen Street, Framingham, MA 01701
------------------------------------------------ ---------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: 508-626-2727
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
<PAGE>
TABLE OF CONTENTS
FORM 8-K
November 16, 1999
ITEM PAGE
Item 2. Acquisition or Disposition of Assets. 1
Item 7. Exhibits and Financial Statements. 2
Signature 3
Exhibits and Financial Statements E-1
<PAGE>
Item 2. Acquisition or Disposition of Assets
On November 4, 1999 (the "Closing Date"), ASA International Ltd., a
Delaware corporation ("Buyer"), acquired the business of Design Data Systems
Corporation, a Florida corporation ("Seller"), pursuant to that certain Asset
Purchase Agreement (the "Purchase Agreement") by and among Buyer, Seller,
Michael Meli, individually (only with respect to certain sections of the
Purchase Agreement), and Eastern Bank, as Escrow Agent (the "Escrow Agent")
(only with respect to certain sections of the Purchase Agreement). The Purchase
Agreement provides that the transaction is effective as of September 30, 1999
(the "Effective Date").
Pursuant to and as more fully set forth in the Purchase Agreement,
Buyer had the right and obligation to purchase certain of the assets and assumed
certain of the liabilities of Seller for a purchase price of $5,000,000 (the
"Purchase Price"). Of the Purchase Price, $4,750,000 was due and payable on the
Closing Date and $250,000 was to be deposited with the Escrow Agent to be held
pursuant to the terms of the Purchase Agreement.
Also on the Closing Date, Buyer entered into a certain Asset
Acquisition and Exchange Cooperation Agreement (the "Exchange Agreement") with
SQL Acquisition LLC, a Delaware limited liability company ("SQL"), Fidelity
National 1031 Exchange Services, Inc., a California corporation, and Pacific
American Property Exchange Corporation, a California corporation and sole member
and manager of SQL. Buyer has entered into the Exchange Agreement for the
purpose of seeking the ability to effectuate a like-kind exchange pursuant to
Section 1031 of the Internal Revenue Code of 1986, as amended. Pursuant to and
as more fully set forth in the Exchange Agreement, Buyer has reserved the right
to exchange certain software and related intellectual property of Seller (the
"Replacement Property") for certain other relinquished property of Buyer. In
connection therewith, Buyer assigned to SQL Buyer's right and obligation under
the Purchase Agreement to acquire the Replacement Property pursuant to a certain
Assignment Agreement dated the Closing Date between Buyer, Seller and SQL (the
"Assignment"). On the Closing Date, the following actions were completed:
1. SQL acquired the Replacement Property from Seller in
accordance with the Purchase Agreement and the Assignment in
exchange for a payment of $4,300,000.
2. Buyer Acquired the remainder of Seller's assets in accordance
with the Purchase Agreement in exchange for (a) the payment of
$700,000 (of which $250,000 was deposited with the Escrow Agent)
and (b) the assumption of certain of Seller's liabilities.
3. Buyer loaned SQL $4,300,000 pursuant to the Exchange Agreement
and a related promissory note due on November 3, 2000 and bearing
interest at the rate of 6.18% per annum. The funds were used by
SQL to acquire the Replacement Property.
4. SQL granted a license to Buyer to use the Replacement Property
until November 3, 2000 pursuant to a License Agreement between
Buyer and SQL, in exchange for a one time license fee of
$285,000.
The Buyer anticipates that it will seek to complete a like-kind
exchange involving the Replacement Property on or before November 3, 2000,
although there can be no assurance that such an exchange will be completed.
The discussions contained in this document includes forward-looking
statements. Such statements involve a number of risks and uncertainties,
including but not limited to those discussed above and those identified from
time to time in the Company's filings with the Securities and Exchange
Commission. These risks and uncertainties could cause actual results to differ
materially from those projected. Readers are cautioned not to place undue
reliance on these forward-looking statements. The Company assumes no obligation
to update these forward-looking statements to reflect events or circumstances
arising after the date hereof.
Item 7 Exhibit and Financial Statements
(a)(b) Financial Statements and PRO FORMA financial information of
business acquired
The financial statements and pro forma financial information required
by this item will be filed by amendment within sixty days of the date of this
report.
(c) Exhibits
Exhibit No. Title
----------- -----
2 Asset Purchase Agreement dated November 4, 1999
10.1 Assignment and Assumption Agreement dated November 4, 1999
10.2 Bill of Sale and General Assignment of Assets dated
November 4, 1999
10.3 Assignment of Trademarks dated November 4, 1999
10.4 Assignment of Copyrights dated November 4, 1999
10.5 Asset Acquisition and Exchange Cooperation Agreement dated
November 4, 1999
10.6 Promissory Note dated November 4, 1999
10.7 Security Agreement dated November 4, 1999
10.8 Intellectual Property License Agreement dated November 4,
1999
10.9 Assignment Agreement dated November 4, 1999
10.10 Bill of Sale and General Assignment of Assets dated November
4, 1999
10.11 Assignment of Trademarks dated November 4, 1999
10.12 Assignment of Copyrights dated November 4, 1999
<PAGE>
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 hereunto duly authorized.
ASA INTERNATIONAL LTD.
By: /S/ TERRENCE C. MCCARTHY
------------------------------
Terrence C. McCarthy,
Vice President and Treasurer
Date: November 16, 1999
EXHIBIT 2
TABLE OF CONTENTS
PAGE
ARTICLE I - THE ACQUISITION.................................................1
1.1 Purchase of Assets..................................................4
1.2 Consideration for Assets............................................4
1.3 Sales Taxes.........................................................4
1.4 Allocation..........................................................4
1.5 Closing.............................................................5
1.6 Non-Assignment or Subcontracting of Certain Assets..................6
ARTICLE II - REPRESENTATIONS AND WARRANTIES OF SELLER.......................6
2.1 Organization of Seller..............................................6
2.2 Due Authorization...................................................6
2.3 Due Execution and Enforceability....................................7
2.4 No Conflict.........................................................7
2.5 Consents and Approvals of Governmental Authorities..................7
2.6 Seller Financial Statements.........................................7
2.7 Ownership and Transfer of Assets....................................8
2.8 Restrictions on Business Activities.................................8
2.9 Capital Equipment and Hard Assets...................................8
2.10 Intellectual Property...............................................8
2.11 Contracts...........................................................9
2.12 Governmental Authorization..........................................9
2.13 Compliance with Applicable Laws....................................10
2.14 Taxes..............................................................10
2.15 Brokers' or Finders' Fees..........................................10
2.16 Representations Complete...........................................10
2.17 Material Adverse Change............................................10
2.18 Litigation.........................................................11
2.19 Knowledge..........................................................11
2.20 Year 2000 Compliance...............................................11
ARTICLE III - REPRESENTATIONS AND WARRANTIES OF BUYER......................11
3.1 Organization, Standing and Power...................................11
3.2 Authority..........................................................11
3.3 Due Execution and Enforceability...................................12
3.4 No Conflict........................................................12
3.5 Representations Complete...........................................12
ARTICLE IV - CONDUCT PRIOR TO THE CLOSING DATE.............................12
4.1 Conduct of Business................................................12
4.2 No Solicitation....................................................14
ARTICLE V - ADDITIONAL AGREEMENTS..........................................15
5.1 Access to Information..............................................15
5.2 Confidentiality....................................................15
5.3 Expenses...........................................................15
5.4 Public Disclosure..................................................15
5.5 Consents...........................................................15
5.6 Best Efforts.......................................................16
5.7 Notification of Certain Matters....................................15
5.8 Additional Documents and Further Assurances........................16
5.9 Tax Returns........................................................16
5.10 Payment of Taxes...................................................16
5.11 Vote in Favor by Michael Meli......................................16
5.12 Employees..........................................................16
5.13 Change of Name.....................................................16
5.14 Section 1031 Exchange..............................................16
5.15 Cooperation and Retention of Records...............................17
5.16 Employee Benefit Plans.............................................17
ARTICLE VI - CONDITIONS TO THE ACQUISITION.................................17
6.1 Conditions to Obligations of Each Party to Effect the Acquisition..17
6.2 Additional Conditions to Obligations of Seller.....................17
6.3 Additional Conditions to the Obligations of Buyer..................18
6.4 Effect of Closing..................................................19
ARTICLE VII - SURVIVAL OF REPRESENTATIONS AND WARRANTIES;
INDEMNITY AND ESCROW....................................................20
7.1 Survival of Representations and Warranties.........................20
7.2 Seller and Meli Indemnity; Escrow Arrangements.....................20
7.3 Buyer Indemnity....................................................25
7.4 Third Party Claims.................................................25
7.5 Limitations........................................................25
ARTICLE VIII - TERMINATION, AMENDMENT AND WAIVER...........................26
8.1 Termination........................................................26
8.2 Effect of Termination..............................................26
8.3 Amendment..........................................................26
8.4 Extension; Waiver..................................................27
ARTICLE IX - CERTAIN POST-CLOSING COVENANTS................................27
9.1 Schedule...........................................................27
ARTICLE X - GENERAL PROVISIONS.............................................27
10.1 Attorneys' Fees....................................................27
10.2 Notices............................................................27
10.3 Interpretation.....................................................28
10.4 Counterparts.......................................................29
10.5 Entire Agreement...................................................29
10.6 Severability.......................................................29
10.7 Other Remedies.....................................................29
10.8 Governing Law......................................................29
10.9 Rules of Construction..............................................29
<PAGE>
INDEX OF EXHIBITS
EXHIBIT DESCRIPTION
Exhibit A Form of Instrument of Assumption of Liabilities
Exhibit B Bill of Sale and General Assignment of Seller Assets
Exhibit C Trademark Assignment
Exhibit D Copyright Assignment
Exhibit E Form of Agreement not to Compete
Exhibit F Form of Sublease
Exhibit G Escrow Agent Fee Schedule
<PAGE>
INDEX OF SCHEDULES
SELLER SCHEDULE DESCRIPTION PREPARED BY
<PAGE>
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (the or this "AGREEMENT") is made and entered
into as of November 4, 1999 by and between ASA International Ltd., a Delaware
corporation ("BUYER"); Design Data Systems Corporation, a Florida corporation
("SELLER"); and, with respect to Article VII only, Eastern Bank as Escrow Agent;
and, with respect to Sections 4.2, 5.11 and 5.14 and Article VII only, Michael
Meli ("Meli").
RECITALS
A. The Boards of Directors of each of Seller and Buyer believe it is in the
best interests of each company and its respective stockholders that Buyer
acquire certain of the assets of, and assume certain of the liabilities of,
Seller (the "ACQUISITION"), including certain software technology currently
under development by Seller to be further developed by Buyer in order to improve
the software's suitability for sale to customers.
B. Seller is engaged in the business of designing, developing, licensing,
supporting, maintaining, selling and marketing and implementing software for
commercial enterprises (the "BUSINESS").
C. A portion of the funds otherwise payable by Buyer in connection with the
Acquisition shall be placed in escrow by Buyer as partial security for Seller's
indemnity obligations under this Agreement, and the release of such amount shall
be subject to certain events and conditions.
NOW, THEREFORE, in consideration of the covenants, promises and
representations set forth herein, and for other good and valuable consideration,
the parties agree as follows:
ARTICLE I
THE ACQUISITION
1.1 PURCHASE OF ASSETS.
(a) PURCHASE AND SALE OF ASSETS. On the terms and subject to the
conditions set forth in this Agreement, Seller will sell, convey, transfer,
assign and deliver to Buyer, and Buyer will purchase and acquire from Seller on
the Closing Date (as defined in Section 1.5), all of Seller's rights, title and
interest in and to all of the assets of Seller (collectively the "SELLER
ASSETS") free and clear of all liens, pledges, charges, claims, security
interests or other encumbrances of any sort (collectively, "LIENS"), (excluding
Liens listed on SCHEDULE 2.7), including without limitation, the following
(provided, however, that the Seller Assets shall not include those assets set
forth on SCHEDULE 1.1(A)):
(i) All rights, title and interest in and to (a) the software
designed, developed, maintained, implemented, supported, licensed or sold by
Seller commonly referred to as "SQL*TIME" ("SQL*TIME"), including all released
and unreleased source code and object code versions thereof and all related
documentation and development notes (the "SOFTWARE"), and (b) all other
intellectual property of Seller including databases, market information,
research and development, patents, patent applications, copyrights, copyright
registration applications, trademarks and service marks and related
applications, trade names, trade secrets, proprietary information, technology
rights and licenses, proprietary rights and processes, know-how, research and
development in progress, and any and all other intellectual property including,
without limitation, all things authored, discovered, developed, made, perfected,
improved, designed, engineered, devised, acquired, produced, conceived or first
reduced to practice by Seller, or that are relevant to an understanding or to
the development of the Business or to the performance by the products of the
Business of their intended functions or purposes, whether tangible or
intangible, in any stage of development, including without limitation
enhancements, designs, technology, improvements, inventions, works of
authorship, formulas, processes, routines, subroutines, techniques, concepts,
object code, flow charts, diagrams, coding sheets, source code, listings and
annotations, programmers' notes, information, work papers, work product and
other materials of any types whatsoever, and all rights of any kind in or to any
of the foregoing (collectively, with the Software, "INTELLECTUAL PROPERTY");
(ii) All rights, title and interest in and to all end-user
software licenses (any such contracts to be listed on SCHEDULE 1.1(A)(II) and to
be referred to the "LICENSE AGREEMENTS") sold by Seller in connection with the
use of the Software;
(iii) All rights, title and interest in and to any contracts for
maintenance in connection with the Software (any such contracts to be listed on
SCHEDULE 1.1(A)(III) and to be referred to as the "MAINTENANCE AGREEMENTS");
(iv) All rights, title and interest in and to any contracts for
implementation of the Software whether arising from License Agreements,
statements of work, purchase orders, work or services orders or other agreements
(any such contracts to be listed on SCHEDULE 1.1(A)(IV) and to be referred to as
the "IMPLEMENTATION AGREEMENTS");
(v) The right, but not the obligation, to employ all employees of
Seller on the Closing Date;
(vi) All accounts receivable of Seller which are outstanding as
of the Closing Date;
(vii) All prepaid expenses relating to Seller as of the Effective
Date;
(viii) All other current assets of Seller as of the Effective
Date;
(ix) All computers, computer equipment and related software owned
by Seller or used in conjunction with all aspects of the Seller business; and
(x) All cash and cash equivalents as of the Closing Date.
(b) ASSETS NOT ACQUIRED. Seller shall retain all assets set forth on
SCHEDULE 1.1(A).
(c) ASSUMPTION OF LIABILITIES. Buyer shall not assume any liabilities
or obligations of Seller except for those liabilities and obligations which
Buyer expressly assumes pursuant to this Section 1.1(c). Without limiting the
foregoing, it is expressly agreed that Buyer shall not assume any liabilities
for payroll, bonus or related obligations accrued prior to the Effective Date,
or taxes thereon, or for employment, income, sales, property or other taxes
incurred or accrued by Seller except as set forth on SCHEDULE 1.1(C) (III).
Seller will indemnify and hold Buyer harmless from and against any and all
losses, costs, expenses, claims, liabilities, deficiencies, judgments and
damages incurred or suffered by Buyer or any of its affiliates related to or
arising out of any liabilities or obligations of Seller, except for those
liabilities or obligations expressly assumed by Buyer in this Section 1.1(c). At
the Closing, Buyer shall assume the following obligations and liabilities of
Seller (collectively, the "ASSUMED LIABILITIES"):
(i) All of Seller's implementation obligations, whether arising
from License Agreements, Maintenance Agreements, Implementation Agreements,
statements of work, purchase orders, work or services orders or other
agreements, that are transferred to Buyer ("IMPLEMENTATION OBLIGATIONS") as of
the Effective Date, provided that Seller identifies on SCHEDULE 1.1(C)(I) each
such Implementation Obligation to Buyer and provides to Buyer on SCHEDULE
1.1(C)(I) the following information for each such Implementation Obligation:
(1) Customer name;
(2) Commencement date and estimated completion dates of
implementation project;
(3) Method of fee calculation (time & materials or fixed price)
and the agreed upon billing rates involved, where
applicable;
(4) Amount, if any, of cash deposits received from customer in
advance of work performed;
(5) Nature of any custom software development involved with the
implementation, excluding normal configuration and
integration to back-end accounting systems; and
(6) Material problems, if any, in connection with the
implementation;
(ii) All of Seller's maintenance and support obligations, whether
arising from License Agreements, Maintenance Agreements, Implementation
Agreements, statements of work, purchase orders, work or service orders or other
agreements, that are transferred to Buyer ("MAINTENANCE OBLIGATIONS") as of the
Effective Date, provided that Seller identifies each such Maintenance Obligation
to Buyer on SCHEDULE 1.1(C)(II) and provides to Buyer on SCHEDULE 1.1(C)(II) the
following information for each such Maintenance Obligation:
(1) Customer name;
(2) Maintenance period and related maintenance fee; and
(3) Any Maintenance Obligations assumed by Seller that are out
of the ordinary course of business; and
(iii) All of Seller's bank debt, accounts payable, equipment
lease obligations, deferred revenue, customer deposits, accrued liabilities and
other liabilities (A) set forth on the September 30, 1999 balance sheet included
in the Seller Financials (as defined below) or (B) incurred in connection with
the Business between the Effective Date and the Closing Date in the ordinary
course of business or (C) set forth on SCHEDULE 1.1(C)(III) or (D) incurred in
connection with the Business prior to the Effective Date in the ordinary course
of business, provided the amount of such liabilities is not material
individually or in the aggregate (collectively, the "Balance Sheet Liabilities")
or (E) payroll obligations after the Effective Date for employees of Seller who
become employees of Buyer; provided, however, that the Balance Sheet Liabilities
shall not include any Transaction Expenses (as defined herein) incurred by
Seller or Meli.
(d) RISK OF LOSS. In the event any of the Seller Assets are
unavailable for delivery to Buyer on the Closing Date as a result of risks for
which such Seller Assets were insured by Seller, Buyer may at its option elect
(i) to require Seller to deliver to Buyer assignments of such Seller's rights
under its insurance policies, if any, applicable to such Seller Assets and to
close on that basis, or (ii) to not close due to the failure of a condition to
closing if the amount of the loss reasonably can be expected to be in excess of
$200,000, unless Seller has used the proceeds of any insurance proceeds to
repair or replace such Assets to Buyer's satisfaction. Seller hereby agrees to
make an assignment of its rights under its insurance policies if Buyer so
elects.
1.2 CONSIDERATION FOR ASSETS. As consideration (the "CONSIDERATION") for
the sale of the Assets to Buyer, in addition to the assumption of the Assumed
Liabilities provided by Section 1.1(c):
(a) at the Closing, on the terms and subject to the conditions set
forth in this Agreement, Buyer shall pay to Seller, by wire transfer of same day
funds, an amount equal to $4,750,000; and
(b) at the Closing, on the terms and subject to the conditions set
forth in this agreement, Buyer shall deposit the sum of $250,000 into escrow
(the "ESCROW AMOUNT") in accordance with Article VII hereof.
1.3 SALES TAXES. Seller shall bear and pay, and, to the extent that Buyer
incurs any, shall reimburse Buyer for, any sales taxes, use taxes, transfer
taxes, documentary charges, recording fees or similar taxes, charges, fees or
expenses ("SALES TAXES") that may become payable in connection with the sale of
the Seller Assets to Buyer. The parties shall cooperate with each other to the
extent reasonably requested and legally permitted to minimize any such Sales
Taxes.
1.4 ALLOCATION. Prior to the Closing, Buyer and Seller shall mutually agree
on the manner in which the consideration referred to in Section 1.2 is to be
allocated among the Seller Assets (the "ALLOCATION"), which Allocation shall be
set forth in SCHEDULE 1.4 as of the Effective Date, subject to adjustment by the
parties to reflect the period between the Effective Date and the Closing Date.
The Allocation shall be conclusive and binding upon Buyer and Seller for all
purposes, and the parties agree that all tax returns and reports (including
Internal Revenue Service ("IRS") Form 8594) and all financial statements shall
be prepared in a manner consistent with (and the parties shall not otherwise
file a tax return position inconsistent with) the Allocation unless required by
the IRS or state taxing authority. The Allocation shall be prepared in a manner
consistent with Section 1060 of the Internal Revenue Code of 1986, as amended
(the "CODE"), and the income tax regulations promulgated thereunder.
1.5 CLOSING.
(a) CLOSING. Unless this Agreement is earlier terminated pursuant to
Section 8.1, the closing of the transactions contemplated by this Agreement (the
"CLOSING") shall be held at the offices of Stroock & Stroock & Lavan LLP, 100
Federal Street, Boston, MA 02110 at 10:00 a.m. on the date which is two business
days following satisfaction or waiver of the last of the conditions to the
Acquisition as set forth in Article VI hereof, or on such other time and/or date
as to which the parties agree, but no earlier than September 30, 1999 and no
later than November 4, 1999 (the actual date on which the Closing occurs is
referred to herein as the "CLOSING DATE"), and shall be effective as of
September 30, 1999 (the "Effective Date").
(b) DELIVERY. At the Closing:
(i) Buyer shall deliver to Seller an Instrument of Assignment and
Assumption of Liabilities in substantially the form of EXHIBIT A hereto by which
Seller shall assign the Seller Assets to Buyer and Buyer shall assume the
Assumed Liabilities as of the Closing;
(ii) Seller shall deliver to Buyer all bills of sale,
endorsements, assignments, consents to assignments to the extent obtained and
other instruments and documents as Buyer may reasonably request to sell, convey,
assign, transfer and deliver to Buyer good title to all the Seller Assets free
and clear of any and all Liens, including, without limitation, a Bill of Sale
and General Assignment of Seller Assets in substantially the form attached
hereto as EXHIBIT B;
(iii) Seller shall deliver to Buyer a Trademark Assignment in
substantially the form attached hereto as EXHIBIT C;
(iv) Seller shall deliver to Buyer a Copyright Assignment in
substantially the form attached hereto as EXHIBIT D; and
(v) Seller and Buyer shall deliver or cause to be delivered to
one another such other instruments and documents reasonably necessary or
appropriate to evidence the due execution, delivery and performance of this
Agreement.
(c) TAKING OF NECESSARY ACTION; FURTHER ACTION. If, at any time after
the Closing Date, any further action is necessary or desirable to carry out the
purposes of this Agreement and to vest Buyer with full right, title and
possession to all Seller Assets, the officers and directors of Seller are fully
authorized in the name Seller or otherwise to take, and will take, all such
lawful and necessary and/or desirable action.
1.6 NON-ASSIGNMENT OR SUBCONTRACTING OF CERTAIN ASSETS. Notwithstanding
anything to the contrary in this Agreement, to the extent that the assignment or
subcontracting hereunder of any of the Assets shall require the consent of any
other party (or in the event that any of the same shall be nonassignable or
unable to be subcontracted), neither this Agreement nor any action taken
pursuant to its provisions shall constitute an assignment or subcontract or an
agreement to assign or subcontract if such assignment or subcontract or
attempted assignment or subcontract would constitute a breach thereof or result
in the loss or diminution thereof, provided, however, that in each such case,
Seller and Buyer shall each use its reasonable commercial efforts to obtain the
consent of such other party to an assignment to Buyer. If such consent is not
obtained by the Closing Date, Seller shall cooperate with Buyer in any
arrangement designed for Buyer to perform Seller's obligations with respect to
such Asset after the Closing Date and for Buyer to receive the benefits under
any such Asset after the Closing Date, which arrangements may include
enforcement, for the account and benefit of Buyer of any and all rights of
Seller against any person or entity arising out of the breach or cancellation by
such person or entity or otherwise, all of such actions of Seller to be at the
direction and expense of Buyer. The Provisions of this Section 1.6 shall not be
deemed to modify Buyer's obligations pursuant to Section 1.1(c).
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth on a schedule to this Agreement, Seller represents and
warrants to Buyer that:
2.1 ORGANIZATION OF SELLER. Seller is a corporation duly incorporated and
validly existing under the laws of the State of Florida and has full corporate
power and authority to carry on the Business as it is now being conducted and to
own the Seller Assets. Seller is duly qualified or licensed to do business as a
foreign corporation in good standing in the states of Florida, North Carolina
and Colorado, which are the only jurisdictions in which the Seller owns or
leases real estate or employs employees. Seller has authorized 500 shares of
Common Stock, $1.00 par value, 500 of which are issued and outstanding and owned
by Meli. Except as set forth on SCHEDULE 2.1, there are no other shares of
capital stock authorized, issued or outstanding, nor are there any options, or
other rights to acquire any capital stock of Seller outstanding.
2.2 DUE AUTHORIZATION. Seller has all requisite corporate power and
authority to execute and deliver this Agreement, and each document, instrument
or agreement contemplated hereby, including but not limited to the documents
delivered at Closing, and to perform its obligations hereunder and thereunder.
The execution, delivery and performance of this Agreement and each document,
instrument or agreement executed pursuant to this Agreement by Seller and the
consummation of the transactions contemplated hereby and thereby have been duly
authorized by all necessary corporate action. This Agreement and each document,
instrument or agreement executed pursuant to this Agreement by Seller, including
but not limited to the documents delivered at Closing, have been or will be duly
executed and delivered by Seller and constitute the valid and binding obligation
of Seller, enforceable in accordance with their respective terms except as such
enforceability may be limited by bankruptcy or similar laws and general
principles of equity.
2.3 DUE EXECUTION AND ENFORCEABILITY. This Agreement, and each document,
instrument or agreement executed pursuant to this Agreement by Seller, including
but not limited to the documents delivered at Closing, have been or will be duly
executed and delivered by Seller, and assuming due authorization, execution and
delivery by Buyer, if required, this Agreement and each document, instrument or
agreement executed pursuant to this Agreement by Seller, including but not
limited to the documents delivered at Closing, constitute the legal, valid and
binding obligations of Seller, enforceable against Seller in accordance with
their terms, subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other federal or state laws affecting the rights
of creditors and the effect or availability of rules of law governing specific
performance, injunctive relief or other equitable remedies (regardless of
whether any such remedy is considered in a proceeding at law or equity).
2.4 NO CONFLICT. The execution and delivery of this Agreement, and each
document, instrument or agreement executed pursuant to this Agreement, including
but not limited to the documents delivered at Closing, and the performance of
Seller's obligations hereunder and thereunder, (i) are not in violation or
breach of, and will not conflict with or constitute a default under, any of the
terms of the certificate of incorporation or bylaws of Seller or, to the best of
Seller's knowledge, any contract, agreement or commitment binding upon Seller or
any of the Seller Assets; and (ii) to the best of Seller's knowledge, will not
conflict with or violate any applicable law, rule, regulation, judgment, order
or decree of any government, governmental instrumentality or court having
jurisdiction over Seller or any of the Seller Assets.
2.5 CONSENTS AND APPROVALS OF GOVERNMENTAL AUTHORITIES. To the best of
Seller's knowledge, no consent, approval or authorization of, or declaration,
filing or registration with, any governmental or regulatory authority is
required to be made or obtained by Seller in connection with the execution,
delivery and performance of this Agreement and each document, instrument and
agreement executed pursuant to this Agreement.
2.6 SELLER FINANCIAL STATEMENTS.
(a) SCHEDULE 2.6 sets forth Seller's reviewed balance sheets and
income statements as of and for the years ended December 31, 1998 and 1997, and
Seller's September 30, 1999 unaudited balance sheet and income statement (the
"SELLER FINANCIALS"). To the best of Seller's knowledge, the Seller Financials
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis throughout the periods indicated. The Seller
Financials present fairly the operating results of the Business during the
periods indicated therein. For the nine months ended September 30, 1999,
revenues recognized by Seller were $4,899,234.19 and net income before taxes was
$6,314.28, except that the Seller Financials are unaudited and are subject to
normal recurring year-end adjustments which are not expected to be material in
amount. Notwithstanding the foregoing, Buyer and Seller acknowledge that
Seller's December 31, 1998 financial statements are currently being audited, and
are therefore subject to normal, recurring year-end audit adjustments. September
30, 1999 is referred to herein as the "BALANCE SHEET DATE."
(b) All accounts receivable of Seller have arisen from bona fide
transactions by Seller in the ordinary course of its business. All accounts
receivable reflected in the Seller Financials, taken as a whole, are good and
collectible in the ordinary course of business at the aggregate recorded amounts
thereof, net of any applicable allowance for doubtful accounts reflected in the
Seller Financials, and all accounts receivable to be reflected on the books and
records of Seller as of the Closing Date, taken as a whole, will be good and
collectible in the ordinary course of business at the aggregate recorded amounts
thereof, net of any applicable allowance for doubtful accounts, which allowances
will be determined on a basis consistent with the basis used in determining the
allowances for doubtful accounts reflected in the Seller Financials.
2.7 OWNERSHIP AND TRANSFER OF ASSETS.
(a) OWNERSHIP. Except as set forth on SCHEDULE 2.7, Seller owns all
rights, title and interest in and to the Seller Assets free and clear of any
Liens, and has the rights to sell, assign, transfer, license and deliver, as
applicable, such Seller Assets as contemplated herein.
(b) EFFECTIVE TRANSFER. By means of this Agreement, together with the
documents, instruments and agreements contemplated hereby, Seller will transfer
to Buyer good and marketable title to all Seller Assets. The Seller Assets sold
to Buyer pursuant to this Agreement and the documents, instruments and
agreements contemplated hereby and thereby, will transfer all necessary assets
and intellectual property rights required by Buyer to conduct the Business.
2.8 RESTRICTIONS ON BUSINESS ACTIVITIES. Except as set forth on SCHEDULES
2.10(A) AND 2.10(B), there is no agreement, commitment, judgment, injunction,
order or decree binding upon Seller, the Seller Assets or, to the best knowledge
of Seller, any employee of Seller, which has or could reasonably be expected to
have the effect of prohibiting or impairing in any material respect any use by
Buyer of the Seller Assets following the Closing in the manner generally used
prior to the Closing Date.
2.9 CAPITAL EQUIPMENT AND HARD ASSETS. To Seller's knowledge, all tangible
assets and equipment of Seller other than those listed on SCHEDULE 1.1(A) are in
good condition and repair, reasonable wear and tear excepted, and are adequate
for the uses to which they are being put or would be put in the ordinary course
of business consistent with industry standards and will be transferred to Buyer
without any Liens. Seller does not warrant that its equipment complies with Year
2000 requirements.
2.10 INTELLECTUAL PROPERTY.
(a) Except as set forth in SCHEDULE 2.10(A): Seller owns all rights,
title and interest in and to the Intellectual Property, and the conduct of the
activities of the Business currently and in the past does not conflict with and
has not conflicted with Intellectual Property rights of others. All Intellectual
Property used or held for use in the conduct of the activities of the Business
owned by Seller is so owned free and clear of all Liens and no other person,
including without limitation any present or former employee, officer or director
of Seller, has any right whatsoever therein. Neither Seller, nor to Seller's
knowledge, any present or former employee thereof, has violated or, by
conducting the activities of the Business in the ordinary course consistent with
past practice would violate, any intellectual property rights whatsoever of any
other person or entity. Seller does not have any obligation to compensate any
person or entity for the use of any Intellectual Property relating to the Seller
Assets. Except for License Agreements granted in the ordinary course of business
or except as set forth on SCHEDULE 2.10(A), Seller has not granted to any person
or entity any license, option or other rights to use in any manner any
Intellectual Property whether requiring the payment of royalties or not.
(b) Except as set forth on SCHEDULE 2.10(B): Seller has all right,
title and interest in and to the Software. No person or entity other than Seller
owns any right, title or interest in the Software including, without limitation,
any right to manufacture, use, copy, distribute or sublicense any object code or
source code thereof, except as a result of License Agreements granted by Seller
in the ordinary course of business. The Software is (i) not subject to any
Liens, (ii) not subject to any pending or, to Seller's best knowledge,
threatened challenge of infringement of the rights of others, nor to the best
knowledge of Seller is there any basis for a challenge of infringement of any
such rights of others, and (iii) freely transferable and assignable to Buyer.
2.11 CONTRACTS. SCHEDULE 2.11 accurately lists all of the contracts to be
assigned to Buyer in connection with the Acquisition (the "ASSIGNED CONTRACTS").
To the best of Seller's knowledge, each of the Assigned Contracts is a legal,
binding and enforceable obligation by or against Seller, subject to the effect
of applicable bankruptcy, insolvency, reorganization, moratorium or other
similar federal or state laws affecting the rights of creditors and the effect
or availability of rules of law governing specific performance, injunctive
relief or other equitable remedies (regardless of whether any such remedy is
considered in a proceeding at law or in equity). To the best of Seller's
knowledge, Seller has not breached, violated or defaulted under, or received
notice that it has breached, violated or defaulted under, any of the terms or
conditions of any agreement required to be set forth in SCHEDULE 2.11. Each
Assigned Contract is in full force and effect and is not subject to any default
thereunder of which Seller has knowledge by any party obligated to Seller
pursuant thereto. Seller has obtained, or will obtain subsequent to the Closing
Date, all necessary consents, waivers and approvals of parties to any Assigned
Contract as are required to assign all rights and benefits thereunder to Buyer
as of the Closing.
2.12 GOVERNMENTAL AUTHORIZATION. SCHEDULE 2.12 accurately lists each
material consent, license, permit, grant or other authorization issued to Seller
by each court, administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign (each a "GOVERNMENTAL ENTITY")
(i) pursuant to which Seller currently operates or holds any interest in any of
the Seller Assets or (ii) to the best of Seller's knowledge, which is required
for the operation of the activities of the Business or the holding of any such
interest (herein collectively called "AUTHORIZATIONS"), which Authorizations are
in full force and effect and constitute all Authorizations required to permit
Seller to operate or conduct the activities of the Business or hold any interest
in the Seller Assets. No Governmental Entity has at any time notified Seller of
any challenge or question regarding the legal right of Seller to manufacture,
offer or sell any of the products of the Business, including the Seller Assets,
in the present manner or style thereof.
2.13 COMPLIANCE WITH APPLICABLE LAWS. To the best of Seller's knowledge,
Seller has complied with all laws, regulations, rules and orders (including
those relating to environmental matters) of each Governmental Entity applicable
to it. Seller has not received any written notice of any asserted violation of
any such laws, regulations, rules or orders. Seller has not received any written
notice that any investigation or review by any Governmental Entity of Seller or
with respect to the Business is pending or that any such investigation or review
is contemplated, except where the outcome of such investigation or review would
not have a material adverse effect on the business or financial condition of
Seller or the Business.
2.14 TAXES. Except as otherwise provided for by this Agreement, Seller has
(a) timely filed within the time the period for filing or any extension granted
with respect thereto, all federal, state, local and foreign tax returns, reports
and estimates ("RETURNS") which it is required to file, and (b) paid any and all
taxes ("TAXES") it is required to pay in connection with the taxable periods to
which such Returns relate. There are (and immediately following the Closing
there will be) no Liens or similar encumbrances on the Seller Assets relating or
pertaining to taxes, except with respect to taxes not yet due and payable.
Seller has no knowledge of any basis for the assertion of any material claims
which, if adversely determined, would result in a Lien or other encumbrance on
the Seller Assets or otherwise materially and adversely affect Buyer or the
Seller Assets.
2.15 BROKERS' OR FINDERS' FEES. Except as disclosed in SCHEDULE 2.15,
Seller is not a party to, or in any way obligated under, any contract or
outstanding claim for the payment of any broker's or finder's fee in connection
with the origin, negotiation, execution or performance of this Agreement, the
nonpayment of which could result in the placement of a lien or other encumbrance
on the Seller Assets, or a claim against Buyer or its affiliates.
2.16 REPRESENTATIONS COMPLETE. To the best of Seller's knowledge, none of
the representations or warranties made by Seller (as modified by the Disclosure
Schedules), nor any statement made in any Exhibit or certificate furnished by
Seller pursuant to this Agreement, contains or will contain at the Closing Date,
any untrue statement of a material fact, or omits or will omit at the Closing
Date to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which made,
not misleading. There is no fact, circumstance or condition of any kind or
nature whatsoever known to Seller which reasonably would be expected to have a
material adverse effect on Seller, the Business or the Seller Assets ("Material
Adverse Effect") that has not been set forth in this Agreement.
2.17 MATERIAL ADVERSE CHANGE. Between the Balance Sheet Date and the date
hereof, (a) to the best of Seller's knowledge, there has not been any change in
or effect (or any development that is reasonably likely to result in any change
or effect) that has resulted in or could reasonably be expected to result in a
Material Adverse Effect and (b) Seller has not taken any actions of a type
referred to in Section 4.1 that would have required the consent of Buyer if such
action were to have been taken during the period between the date hereof and the
Closing Date.
2.18 LITIGATION. There is no suit, action or proceeding pending in
connection with Seller or the Business or the Seller Assets, in which Seller has
been served, nor is there any judgment, decree, injunction or order of any
Governmental Entity or arbitrator outstanding against Seller or the Seller
Assets that would have, individually or in the aggregate, a Material Adverse
Effect. Seller has not received any written communication threatening
litigation.
2.19 KNOWLEDGE. Wherever used in this Agreement, the term "to the best of
Seller's knowledge" or any similar terms shall mean those matters of which Meli,
Bonnie Sikes or Donna Karlesky has actual knowledge.
2.20 YEAR 2000 COMPLIANCE.
(a) In all material respects: All features and functionality in the
version 4.9 and the current version 5.0 of SQL*TIME software containing or
calling on a calendar function including, without limitation, any function
indexed to the CPU clock, and any function providing specific dates or days, or
calculating spans of dates or days, shall record, store, process, provide and,
where appropriate, insert, true and accurate dates and calculations for dates in
spans including and following January 1, 2000; and version 4.9 and the current
version 5.0 of SQL*TIME software have no lesser functionality with respect to
records containing dates both, or either, before or after January 1, 2000 than
with respect to dates prior to January 1, 2000 only.
(b) Seller has not made any material representations or warranties to
any third party specifically relating to Year 2000, except to the extent set
forth in Section 2.20(a) hereof.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF BUYER
Buyer represents and warrants to Seller as follows:
3.1 ORGANIZATION, STANDING AND POWER. Buyer is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware. Buyer has the corporate power to own its properties and to carry on
its business as now being conducted and is duly qualified to do business and is
in good standing in each jurisdiction in which the failure to be so qualified
would have a material adverse effect on the ability of Buyer to consummate the
transactions contemplated hereby.
3.2 AUTHORITY. Buyer has all requisite corporate power and authority to
execute and deliver this Agreement, and each document, instrument or agreement
contemplated hereby, including, but not limited to the documents delivered at
Closing, and to perform its obligations hereunder and thereunder. The execution
and delivery of this Agreement, and each document, instrument or agreement
executed pursuant to this Agreement by Buyer and the consummation of the
transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Buyer. This Agreement and each document,
instrument or agreement executed pursuant to this Agreement by Buyer, including
but not limited to the documents delivered at Closing, have been duly executed
and delivered by Buyer and constitutes the valid and binding obligation of
Buyer, enforceable in accordance with its terms except as such enforceability
may be limited by bankruptcy or similar laws and general principles of equity.
3.3 DUE EXECUTION AND ENFORCEABILITY. This Agreement, and each document,
instrument or agreement executed pursuant to this Agreement by Buyer, including
but not limited to the documents delivered at Closing, have been duly executed
and delivered by Buyer, and assuming due authorization, execution and delivery
by Seller, if required, this Agreement and each document, instrument or
agreement executed pursuant to this Agreement by Buyer, including but not
limited to the documents delivered at Closing, constitute the legal, valid and
binding obligations of Buyer, enforceable against Buyer in accordance with their
terms, subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium or other federal or state laws affecting the rights
of creditors and the effect or availability of rules of law governing specific
performance, injunctive relief or other equitable remedies (regardless of
whether any such remedy is considered in a proceeding at law or equity).
3.4 NO CONFLICT. The execution and delivery of this Agreement, and each
document, instrument or agreement executed pursuant to this Agreement, including
but not limited to the documents delivered at Closing, and the performance of
Buyer's obligations hereunder and thereunder, (i) are not in violation or breach
of, and will not conflict with or constitute a default under, any of the terms
of the certificate of incorporation or bylaws of Buyer or any contract,
agreement or commitment binding upon Buyer, or (ii) will not conflict with or
violate any applicable law, rule, regulation, order or degree of any government,
governmental instrumentality or court having jurisdiction over Buyer.
3.5 REPRESENTATIONS COMPLETE. None of the representations or warranties
made by Buyer, nor any statement made in any Exhibit or certificate furnished by
Buyer pursuant to this Agreement, contains or will contain at the Closing Date,
any untrue statement of a material fact, or omits or will omit at the Closing
Date to state any material fact necessary in order to make the statements
contained herein or therein, in the light of the circumstances under which made,
not misleading.
ARTICLE IV
CONDUCT PRIOR TO THE CLOSING DATE
4.1 CONDUCT OF BUSINESS. During the period from the date of this Agreement
and continuing until the earlier of the termination of this Agreement or the
Closing Date, Seller agrees that it will (except to the extent that Buyer shall
otherwise consent in writing) carry on its business in the usual, regular and
ordinary course in substantially the same manner as heretofore conducted, to pay
its debts and Taxes when due, to pay or perform other obligations when due, and,
to the extent consistent with such business, use all reasonable efforts
consistent with past practice and policies to preserve intact Seller's present
business organizations, keep available the services of its present officers and
key employees and preserve their relationships with customers, suppliers,
distributors, licensors, licensees, and others having business dealings with it,
all with the goal of preserving unimpaired the Seller Assets, including without
limitation, goodwill of the Business at the Closing Date. Seller shall promptly
notify Buyer of any event or occurrence or emergency not in the ordinary course
of business, and any event which could have a Material Adverse Effect. Except as
expressly contemplated by this Agreement, without the prior written consent of
Buyer, which consent shall and be unreasonably withheld or delayed, Seller shall
not, except in the ordinary course of business consistent with past practice, do
any of the following:
(a) Enter into any commitment or transaction not in the ordinary
course of business;
(b) Transfer to any person or entity any rights to the Seller Assets
other than the granting of end-user Software licenses;
(c) Enter into or amend any agreements pursuant to which any other
party is granted marketing, distribution or similar rights of any type or scope
with respect to any products of Seller;
(d) Amend or otherwise modify (or agree to do so), or violate the
terms of the agreements set forth or described in any of the Schedules hereto;
(e) Commence any litigation;
(f) Acquire or agree to acquire by merging or consolidating with, or
by purchasing a substantial portion of the assets of, or by any other manner,
any business or any corporation, partnership, association or other business
organization or division thereof, or otherwise acquire or agree to acquire any
assets which are material, individually or in the aggregate;
(g) Sell, lease, license or otherwise dispose of any of its properties
or Seller Assets other than the granting of end-user Software licenses;
(h) Incur any indebtedness for borrowed money or guarantee any such
indebtedness or issue or sell any debt securities of Seller or guarantee any
debt securities of others;
(i) Adopt or amend any employee benefit plan, or enter into any
employment contract, pay or agree to pay any special bonus or special
remuneration to any director or employee, or increase the salaries or wage rates
of its employees;
(j) Revalue any of the Seller Assets, including without limitation
writing down the value of inventory or writing off notes or accounts receivable;
(k) Enter into any strategic alliance or joint marketing arrangement
or agreement;
(l) Enter into any license agreement with respect to any intellectual
property of any third party for the purpose of its use with the Intellectual
Property;
(m) Hire or fire any employees (and notice of all such hirings or
firings shall be given to Buyer); or
(n) Agree in writing or otherwise to take any of the actions described
in Sections 4.1(a) through (m) above, or take (or agree in writing to take) any
other action that would prevent Seller from performing or cause Seller not to
perform its covenants hereunder.
4.2 NO SOLICITATION. Until the earlier of (i) the Closing, and (ii) the
date of termination of this Agreement, Seller and all of Seller's officers,
directors, stockholders, agents, representatives and affiliates will not
directly or indirectly take any of the following actions with any party other
than Buyer and its designees:
(a) solicit, encourage, initiate or participate in any negotiations or
discussions with respect to any offer or proposal to acquire all or any portion
of Seller's business and properties or capital stock whether by merger, purchase
of Seller Assets, tender offer or otherwise,
(b) except as required by law (in the opinion of outside counsel),
including fiduciary duties required by law, disclose any information not
customarily disclosed to any person other than its attorneys or financial
advisors concerning Seller's business and properties or afford to any person or
entity access to its properties, books or records, or
(c) assist or cooperate with any person to make any proposal to
purchase all or any part of Seller's capital stock or Seller Assets, other than
selling products of Seller in the ordinary course of business.
ARTICLE V
ADDITIONAL AGREEMENTS
5.1 ACCESS TO INFORMATION. Seller shall afford Buyer and its accountants,
counsel and other representatives, full access during normal business hours upon
reasonable prior notice during the period prior to the Closing Date to (a) all
of Seller's properties, books, contracts, commitments and records, (b) the
employees, customers and suppliers of Seller and (c) all other information
concerning the business, properties and personnel (subject to restrictions
imposed by applicable law) of Seller as Buyer may reasonably request. Seller
agrees to maintain and retain any and all information regarding its business
operations on or prior to the Closing Date necessary for Buyer to calculate the
availability to it of future tax credits for research activities under Section
41 of the Code. Seller agrees to provide to Buyer and its accountants, counsel
and other representatives copies of internal financial statements promptly upon
request. Buyer shall conduct its investigation of Seller in such a manner so as
not to unreasonably interfere with Seller's conduct of the Business. No
information or knowledge obtained in any investigation pursuant to this Section
5.1 shall affect or be deemed to modify any representation or warranty contained
herein or the conditions to the obligations of the parties to consummate the
Acquisition.
5.2 CONFIDENTIALITY. Each of the parties hereto hereby agrees to keep such
information or knowledge obtained in any investigation pursuant to Section 5.1,
or pursuant to the negotiation and execution of this Agreement or the
effectuation of the transactions contemplated hereby, confidential; provided,
however, that the foregoing shall not apply to information or knowledge which
(a) a party can demonstrate was already lawfully in its possession prior to the
disclosure thereof by the other party, (b) is generally known to the public and
did not become so known through any violation of law or this Agreement, (c)
became known to the public through no fault of such party, (d) is later lawfully
acquired by such party from other sources, (e) is required to be disclosed by
order of court or government agency with subpoena powers or (f) which is
disclosed in the course of any litigation between any of the parties hereto.
5.3 EXPENSES. Whether or not the Acquisition is consummated, all fees and
expenses incurred in connection with the Acquisition including, without
limitation, all legal, accounting, financial advisory, consulting and all other
fees and expenses of third parties ("TRANSACTION EXPENSES") incurred by Seller
or Meli in connection with the negotiation and effectuation of the terms and
conditions of this Agreement and the transactions contemplated hereby, shall be
the obligation of and paid by Seller out of the cash portion of Consideration
received by Seller pursuant to Section 1.2(a). Buyer shall pay for all of its
Transaction Expenses.
5.4 PUBLIC DISCLOSURE. Unless otherwise required by law or this Agreement,
prior to the Closing Date, no disclosure (whether or not in response to an
inquiry) of the subject matter of this Agreement shall be made by Seller or
Buyer unless approved by the other party.
5.5 CONSENTS. Seller shall use its reasonable efforts to obtain any
consents as may be required by the Assigned Contracts in connection with the
Acquisition so as to transfer to Buyer all rights of Seller thereunder as of the
Closing.
5.6 REASONABLE COMMERCIAL EFFORTS. Subject to the terms and conditions
provided in this Agreement, each of the parties hereto shall use its reasonable
commercial efforts to take promptly, or cause to be taken promptly, all actions,
and to do promptly, or cause to be done promptly, all things necessary, proper
or advisable under applicable laws and regulations: to consummate and make
effective the transactions contemplated hereby, to obtain all necessary waivers,
consents and approvals and to effect all necessary registrations and filings,
and to remove any injunctions or other impediments or delays, legal or
otherwise, in order to consummate and make effective the transactions
contemplated by this Agreement for the purpose of securing to the parties hereto
the benefits contemplated by this Agreement.
5.7 NOTIFICATION OF CERTAIN MATTERS. Seller shall give prompt notice to
Buyer, and Buyer shall give prompt notice to Seller, of (i) the occurrence or
non-occurrence of any event, the occurrence or non-occurrence of which is likely
to cause any representation or warranty of Seller or Buyer, respectively,
contained in this Agreement to be untrue or inaccurate at or prior to the
Closing Date, and (ii) any failure of Seller or Buyer, as the case may be, to
comply with or satisfy any covenant, condition or agreement to be complied with
or satisfied by it hereunder; PROVIDED, HOWEVER, that the delivery of any notice
pursuant to this Section 5.7 shall not limit or otherwise affect any remedies
available to the party receiving such notice.
5.8 ADDITIONAL DOCUMENTS AND FURTHER ASSURANCES. Each party hereto, at the
request of another party hereto, shall execute and deliver such other
instruments and do and perform such other acts and things as may be necessary or
desirable for effecting completely the consummation of this Agreement and the
transactions contemplated hereby.
5.9 TAX RETURNS. Seller shall be responsible for and pay when due (i) all
of Seller's Taxes attributable to or levied or imposed upon the Seller Assets
relating or pertaining to the period (or that portion of any period) ending on
or prior to the Effective Date and (ii) all Taxes attributable to, levied or
imposed upon, or incurred in connection with the Seller's business operations.
Seller shall continue to timely file within the time period for filing, or any
extension granted with respect thereto, all Returns required to be filed in
connection with the Seller Assets and any portion of any such Returns connected
therewith shall be true and correct and completed in accordance with applicable
laws.
5.10 PAYMENT OF TAXES. As of the Closing, Seller shall have (i) paid all
Taxes it is required to pay as of such time and (ii) withheld with respect to
its employees, and paid to the appropriate taxing authority, all federal and
state income taxes, FICA, FUTA and other Taxes required to be withheld as of
such time. All Taxes that become due or payable with respect to Seller's
operation of the Business prior to the Effective Date shall be the
responsibility of and shall be paid by Seller on a timely basis, and Seller
shall be entitled to all tax benefits or credits arising out of such pre-closing
operations.
5.11 VOTE IN FAVOR BY MICHAEL MELI. Subject to the terms and conditions
hereof Michael Meli, as a stockholder of the Seller, hereby agrees to vote in
favor of the Acquisition.
5.12 EMPLOYEES. At least (10) days prior to the Closing, Buyer shall
provide a written list to Seller setting forth any employees of Seller to whom
Buyer does not intend to make offers of employment.
5.13 CHANGE OF NAME. On or before thirty (30) days following the Closing
Date, Seller shall change its name to a name not resembling Design Data Systems
Corporation.
5.14 SECTION 1031 EXCHANGE. Seller and Meli acknowledge that Buyer may seek
to have the purchase of the Seller Assets hereunder qualify as a "like-kind
exchange" under the provisions of Section 1031 of the Internal Revenue Code of
1986, as amended (the "Code"). In connection therewith, Seller and Meli agree to
execute all documents and to take all actions reasonably requested by Buyer to
assist Buyer in its pursuit of a "like-kind exchange" under the provisions of
Section 1031 of the Code in connection with the purchase of the Seller Assets,
provided, however, that Seller and Meli shall have no liability to Buyer in the
event such treatment is not available to Buyer with respect to Buyer's purchase
of the Seller Assets.
5.15 COOPERATION AND RECORDS RETENTION Seller and Buyer shall (i) each
provide the other with such assistance as may reasonably be requested by them in
connection with the preparation of any tax return, statement, report, form or
other document (hereinafter collectively a "Tax Return"), or in connection with
any audit or other examination by any taxing authority or any judicial or
administrative proceedings relating to liability for taxes, (ii) until the fifth
anniversary of the Closing Date, each retain and provide the other, with any
records or other information which may be relevant to any such Tax Return, audit
or examination, proceeding or determination, or any other reasonable business
purpose or any other legal proceeding, and (iii) each provide the other with any
final determination of any such audit or examination, proceeding or
determination that affects any amount required to be shown on any Tax Return of
the other for any period.
5.16 EMPLOYEE BENEFIT PLANS. Buyer agrees to adopt, as of the Closing Date,
Seller's Section 125 plan, 401(k) plan, and medical plan (the "Benefit Plans")
as of the Closing Date.
ARTICLE VI
CONDITIONS TO THE ACQUISITION
6.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY TO EFFECT THE ACQUISITION. The
respective obligations of each party to this Agreement to effect the Acquisition
shall be subject to the satisfaction at or prior to the Closing Date of the
following conditions:
(a) NO INJUNCTIONS OR RESTRAINTS; ILLEGALITY. No temporary restraining
order, preliminary or permanent injunction or other order issued by any court of
competent jurisdiction or other legal restraint or prohibition preventing the
consummation of the Acquisition shall be in effect, nor shall any proceeding
brought by an administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
be pending; nor shall there be any action taken, or any statute, rule,
regulation or order enacted, entered, enforced or deemed applicable to the
Acquisition, which makes the consummation of the Acquisition illegal.
6.2 ADDITIONAL CONDITIONS TO OBLIGATIONS OF SELLER. The obligations of
Seller to consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing, by
Seller:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of Buyer in this Agreement shall be true and correct on and as of the
Closing Date as though such representations and warranties were made on and as
of such time, and Buyer shall have performed and complied with all covenants,
obligations and conditions of this Agreement required to be performed and
complied with by them as of the Closing Date.
(b) CERTIFICATE OF BUYER. Seller shall have been provided with a
certificate duly executed on behalf of Buyer to the effect that, as of the
Closing Date:
(i) all representations and warranties made by Buyer in this
Agreement are true and complete; and
(ii) all covenants, obligations and conditions of this Agreement
to be performed by Buyer on or before such date have been so performed,
(c) GOVERNMENTAL APPROVALS. Any and all consents, waivers and
approvals required from any governmental entity deemed necessary by Seller to
effect the Acquisition shall have been timely obtained.
6.3 ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF BUYER. The obligations of
Buyer to consummate and effect this Agreement and the transactions contemplated
hereby shall be subject to the satisfaction at or prior to the Closing Date of
each of the following conditions, any of which may be waived, in writing,
exclusively by Buyer:
(a) REPRESENTATIONS, WARRANTIES AND COVENANTS. The representations and
warranties of Seller in this Agreement shall be true and correct on and as of
the Closing Date as though such representations and warranties were made on and
as of such time, and Seller shall have performed and complied with all
covenants, obligations and conditions of this Agreement required to be performed
and complied with by them as of the Closing Date.
(b) CERTIFICATE OF SELLER. Buyer shall have been provided with a
certificate executed on behalf of Seller by its Chief Executive Officer to the
effect that, as of the Closing Date:
(i) all representations and warranties made by Seller in this
Agreement are true and complete; and
(ii) all covenants, obligations and conditions of this Agreement
to be performed by Seller on or before such date have been so performed.
(c) CLAIMS. There shall not have occurred any claims (whether or not
asserted in litigation) which may materially and adversely affect the
consummation of the transactions contemplated hereby or the Business, the Seller
Assets or financial condition of Seller or Buyer.
(d) THIRD PARTY CONSENTS. Seller shall have obtained and provided
Buyer any and all consents, waivers, and approvals required from third parties
relating to the Assigned Contracts so as to assign all rights of Seller
thereunder to Buyer as of the Closing.
(e) GOVERNMENTAL APPROVALS. Any and all consents, waivers and
approvals required from any governmental entity deemed necessary by Buyer to
effect the Acquisition shall have been timely obtained.
(f) NO INJUNCTIONS OR RESTRAINTS ON CONDUCT OF BUSINESS. No temporary
restraining order, preliminary or permanent injunction or other order issued by
any court of competent jurisdiction or other legal or regulatory restraint or
provision challenging Buyer's proposed acquisition of the Seller Assets, or
limiting or restricting Buyer's conduct or operation of the Business (or its own
business) following the Acquisition shall be in effect, nor shall any proceeding
brought by an administrative agency or commission or other governmental
authority or instrumentality, domestic or foreign, seeking any of the foregoing
be pending.
(g) NO MATERIAL ADVERSE CHANGES. There shall not have occurred any
material adverse change in the Business, the Seller Assets or the results of
operations or financial condition of Seller.
(h) EMPLOYMENT AND NON-COMPETITION AGREEMENTS. The persons set forth
in SCHEDULE 6.3(H) shall have entered into Employment and Non-Competition
Agreements with Buyer in forms acceptable to Buyer to become effective
concurrently with the Closing.
(i) THIRD PARTY RIGHTS. No third party shall have any right of any
nature whatsoever (including, without limitation, any right to receive royalty
payments) in respect of any of the Seller Assets, except as stated in SCHEDULE
6.3(I).
(j) VOTE IN FAVOR OF ACQUISITION BY MICHAEL MELI. Michael Meli, as a
member of the Board of Directors of Seller and a stockholder of the Seller,
shall have voted in favor of the Acquisition in both such capacities.
(k) COMPLETION OF BUYER DUE DILIGENCE. Buyer shall have satisfactorily
completed (in Buyer's judgement) its due diligence review of Seller and the
Seller Assets in connection with the Acquisition.
(l) AGREEMENT NOT TO COMPETE. Seller shall have entered into an
Agreement Not to Compete with Buyer in the form attached hereto as EXHIBIT E.
(m) NO CLAIMS. There shall not have occurred any claims (whether or
not asserted in litigation) which may materially and adversely affect the
consummation of the transactions contemplated hereby, the Seller Assets or the
Business.
(n) BANK DEBT. Buyer shall have received from Seller a statement of
Seller's bank debt outstanding as of the Closing Date, which amount shall (i)
have been incurred for expenses of Seller incurred in the ordinary course of
business and (ii) be acceptable to Buyer.
(o) LEASE. Buyer and Meli shall have entered into a lease for the
premises at 13830 58th Street N., Suite 401, Clearwater, Florida, in the form
attached hereto as EXHIBIT F.
6.4 EFFECT OF CLOSING. Except with respect to conditions to be satisfied
following the Closing as set forth in this Agreement or otherwise in writing
between the parties, each of the conditions set forth in Sections 6.1, 6.2 or
6.3 shall be deemed to be satisfied upon the Closing.
ARTICLE VII
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNITY AND ESCROW
7.1 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Seller's representations
and warranties in this Agreement or in any instrument delivered pursuant to this
Agreement shall survive the Acquisition and continue until one (1) year
following the Closing Date (the "EXPIRATION DATE"); PROVIDED, HOWEVER, that the
representations and warranties set forth in Section 2.14 shall survive until the
expiration of the applicable statute of limitations with respect thereto. All of
Buyer's representations and warranties contained in or in any instrument
delivered pursuant to this Agreement shall survive the Acquisition and continue
until the Expiration Date.
7.2 SELLER AND MELI INDEMNITY; ESCROW ARRANGEMENTS.
(a) SELLER AND MELI INDEMNITY. Seller and Meli jointly and severally
agree to indemnify and hold Buyer and its officers, directors and affiliates
(the "INDEMNIFIED PARTIES") harmless against all claims, losses, liabilities,
damages, deficiencies, costs and expenses, including reasonable attorneys' fees
and expenses of investigation, (hereinafter individually a "LOSS" and
collectively "LOSSES") incurred by Buyer, its officers, directors, or affiliates
directly or indirectly which exceed in the aggregate $75,000, as a result of (i)
any inaccuracy or breach of a representation or warranty of Seller contained in
this Agreement, or (ii) any failure by the Company to perform or comply with any
covenant contained in this Agreement; provided, however, that the $75,000
limitation shall not apply to Losses based upon Seller's failure to pay any
Taxes or an alleged breach of Section 2.14.
(b) ESCROW FUND. As security for the indemnity provided for in this
Section 7.2 and by virtue of this Agreement, at the Closing, Buyer shall deposit
the Escrow Amount with Eastern Bank (or other institution acceptable to Buyer
and Seller as Escrow Agent) (the "ESCROW AGENT"), such deposit to constitute an
escrow fund together with any interest earned thereon (the "ESCROW FUND"), to be
governed by the terms set forth herein. Seller may not receive any payment from
the Escrow Fund unless and until Officer's Certificates (as defined in paragraph
(e) below) identifying Losses in the aggregate exceeding $75,000 (the "BASKET
AMOUNT") have been delivered to the Escrow Agent as provided in paragraph (e)
below, in which case Buyer shall be entitled to recover only those Losses
exceeding the Basket Amount.
(c) DISTRIBUTION OF ESCROW FUNDS. The Escrow Agent shall deliver to
the Seller, within ten (10) days after the end of the Escrow Period (as defined
below), an amount equal to the Escrow Amount, less (i) any amount that has been
paid out of the Escrow Fund pursuant to this Article VII and (ii) any amount
that is then in dispute with respect to claims set forth in one or more
Officer's Certificates, then thereafter on the date after any such claims are
resolved, such portion of the Escrow Fund as is not required to satisfy such
claim. The period from the Closing Date to the date that one (1) year after the
Closing Date is hereafter referred to as the "ESCROW PERIOD."
(d) PROTECTION OF ESCROW FUND. The Escrow Agent shall hold and
safeguard the Escrow Fund during the Escrow Period and thereafter, if necessary,
shall treat such fund as a trust fund in accordance with the terms of this
Agreement and not as the property of Buyer and shall hold and dispose of the
Escrow Fund only in accordance with the terms hereof.
(e) CLAIMS UPON ESCROW FUND. Subject to subsection (f) below, thirty
(30) days after receipt by the Escrow Agent at any time on or before the last
day of the Escrow Period of a certificate signed by any officer of Buyer (an
"OFFICER'S CERTIFICATE"): (A) stating that Buyer has paid or properly accrued or
reasonably anticipates that it will have to pay or accrue Losses with respect to
an Indemnity Matter (as defined below), and (B) specifying in reasonable detail
the individual items of Losses included in the amount so stated, the date each
such item was paid or properly accrued, or the basis for such anticipated
liability, and the nature of the misrepresentation, breach of warranty or
covenant to which such item is related, and (C) a request that the Escrow Agent
deliver to Buyer the relevant dollar amount out of the Escrow Fund, the Escrow
Agent shall deliver to Buyer out of the Escrow Fund, as promptly as practicable,
the dollar amount from the Escrow Fund with a value equal to such Losses. For
purposes of this Agreement, "INDEMNITY MATTER" shall mean any matter for which
any Indemnified Party is entitled to indemnification pursuant to SECTION 7.2(A).
(f) OBJECTIONS TO CLAIMS. At the time of delivery of any Officer's
Certificate to the Escrow Agent, a duplicate copy of such certificate shall be
delivered to Seller, and for a period of thirty (30) days after such delivery,
the Escrow Agent shall make no delivery to Buyer of any Escrow Amounts pursuant
to SECTION 7.2(E) hereof unless the Escrow Agent shall have received written
authorization from the Seller to make such delivery. After the expiration of
such thirty (30) day period, the Escrow Agent shall make delivery of the dollar
amount from Escrow Fund in accordance with SECTION 7.2(E) hereof; PROVIDED,
HOWEVER, that no such payment or delivery may be made if the Seller shall object
in a written statement to the claim made in the Officer's Certificate, and such
statement shall have been delivered to the Escrow Agent prior to the expiration
of such thirty (30) day period.
(g) RESOLUTION OF CONFLICTS; ARBITRATION.
(i) In case Seller shall object in writing to any claim or claims
made in (A) any Officer's Certificate or (B) any claim for indemnification made
directly to Seller or Meli during the Escrow Period, Seller and Buyer shall
attempt in good faith to agree upon the rights of the respective parties with
respect to each of such claims. If Seller and Buyer should so agree, a
memorandum setting forth such agreement shall be prepared and signed by both
parties and shall be furnished to the Escrow Agent. The Escrow Agent shall be
entitled to rely on any such memorandum and distribute dollar amounts from the
Escrow Fund in accordance with the terms thereof.
(ii) If no such agreement can be reached within thirty (30) days
of (A) Escrow Agent's receipt of Seller's objection, or (B) Seller's receipt of
any claim during the Escrow Period, then such dispute shall be submitted for
arbitration unless the amount of the damage or Loss is at issue in pending
litigation with a third party, in which event arbitration shall not be commenced
until such amount is ascertained or both parties agree to arbitration; and in
either such event the matter shall be settled by arbitration conducted by one
arbitrator mutually agreeable to Buyer and Seller. In the event that within
thirty (30) days after submission of any dispute to arbitration, Buyer and
Seller cannot mutually agree on one arbitrator, Buyer and Seller shall each
select one arbitrator, and the two arbitrators so selected shall select a third
arbitrator. The arbitrator or arbitrators, as the case may be, shall set a
limited time period and establish procedures designed to reduce the cost and
time for discovery while allowing the parties an opportunity, adequate in the
sole judgement of the arbitrator or majority of the three arbitrators, as the
case may be, to discover relevant information from the opposing parties about
the subject matter of the dispute. The arbitrator or a majority of the three
arbitrators, as the case may be, shall rule upon motions to compel or limit
discovery and shall have the authority to impose sanctions, including attorneys'
fees and costs, to the extent as a competent court of law or equity, should the
arbitrators or a majority of the three arbitrators, as the case may be,
determine that discovery was sought without substantial justification or that
discovery was refused or objected to without substantial justification. The
decision of the arbitrator or a majority of the three arbitrators, as the case
may be, as to the validity and amount of any claim in such Officer's Certificate
or claim during the Escrow Period shall be binding and conclusive upon the
parties to this Agreement. Such decision shall be written and shall be supported
by written findings of fact and conclusions which shall set forth the award,
judgment, decree or order awarded by the arbitrator(s).
(iii) Judgment upon any award rendered by the arbitrator(s) may
be entered in any court having jurisdiction. Any such arbitration shall be held
in New York City, New York, under the rules then in effect of the American
Arbitration Association. The arbitrator(s) shall determine how all expenses
relating to the arbitration shall be paid, including without limitation, the
respective expenses of each party, the fees of each arbitrator and the
administrative fee of the American Arbitration Association.
(h) ESCROW AGENT'S DUTIES.
(i) The Escrow Agent shall be obligated only for the performance
of such duties as are specifically set forth herein, and as set forth in any
additional written escrow instructions which the Escrow Agent may receive after
the date of this Agreement which are signed by an officer of Buyer and Seller,
and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed to be genuine and to have been signed or
presented by the proper party or parties. The Escrow Agent shall not be liable
for any act done or omitted hereunder as Escrow Agent while acting in good faith
and in the exercise of reasonable judgment, and any act done or omitted pursuant
to the advice of counsel shall be conclusive evidence of such good faith.
(ii) The Escrow Agent is hereby expressly authorized to disregard
any and all warnings given by any of the parties hereto or by any other person,
excepting only orders or process of courts of law, and is hereby expressly
authorized to comply with and obey final orders, judgments or decrees of any
court. In case the Escrow Agent obeys or complies with any such final order,
judgment or decree of any court, the Escrow Agent shall not be liable to any of
the parties hereto or to any other person by reason of such compliance,
notwithstanding any such order, judgment or decree being subsequently reversed,
modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.
(iii) The Escrow Agent shall not be liable in any respect on
account of the identity, authority or rights of the parties executing or
delivering or purporting to execute or deliver this Agreement or any documents
or papers deposited or called for hereunder.
(iv) The Escrow Agent shall not be liable for the expiration of
any rights under any statute of limitations with respect to this Agreement or
any documents deposited with the Escrow Agent.
(v) In performing any duties under the Agreement, the Escrow
Agent shall not be liable to any party for damages, losses, or expenses, except
for negligence or willful misconduct on the part of the Escrow Agent. The Escrow
Agent shall not incur any such liability for (A) any act or failure to act made
or omitted in good faith, or (B) any action taken or omitted in reliance upon
any instrument, including any written statement of affidavit provided for in
this Agreement that the Escrow Agent shall in good faith believe to be genuine,
nor will the Escrow Agent be liable or responsible for forgeries, fraud,
impersonations, or determining the scope of any representative authority. In
addition, the Escrow Agent may consult with the legal counsel in connection with
Escrow Agent's duties under this Agreement and shall be fully protected in any
act taken, suffered, or permitted by him/her in good faith in accordance with
the advice of counsel. The Escrow Agent is not responsible for determining and
verifying the authority of any person acting or purporting to act on behalf of
any party to this Agreement.
(vi) If any controversy arises between the parties to this
Agreement, or with any other party, concerning the subject matter of this
Agreement, its terms or conditions, the Escrow Agent will not be required to
determine the controversy or to take any action regarding it. The Escrow Agent
may hold all documents and amounts in the Escrow Fund and may wait for
settlement of any such controversy by final appropriate legal proceedings or
other means as, in the Escrow Agent's discretion, the Escrow Agent may be
required, despite what may be set forth elsewhere in this Agreement. In such
event, the Escrow Agent will not be liable for damage. Furthermore, the Escrow
Agent may at its option, file an action of interpleader requiring the parties to
answer and litigate any claims and rights among themselves. The Escrow Agent is
authorized to deposit with the clerk of the court all documents and amounts in
the Escrow Fund, except all cost, expenses, charges and reasonable attorney fees
incurred by the Escrow Agent due to the interpleader action and which the
parties jointly and severally agree to pay. Upon initiating such action, the
Escrow Agent shall be fully released and discharged of and from all obligations
and liability imposed by the terms of this Agreement.
(vii) The parties and their respective successors and assigns
agree jointly and severally to indemnify and hold Escrow Agent harmless against
any and all losses, claims, damages, liabilities, and expenses, including
reasonable costs of investigation, counsel fees, including allocated costs of
in-house counsel and disbursements that may be imposed on Escrow Agent or
incurred by Escrow Agent in connection with the performance of his/her duties
under this Agreement, including but not limited to any Litigation arising from
this Agreement or involving its subject matter other than arising out of its
negligence or willful misconduct.
(viii) The Escrow Agent may resign at any time upon giving at
least thirty (30) days written notice to the parties; PROVIDED, HOWEVER, that no
such resignation shall become effective until the appointment of a successor
escrow agent which shall be accomplished as follows: the parties shall use their
best efforts to mutually agree on a successor escrow agent within thirty (30)
days after receiving such notice. If the parties fail to agree upon a successor
escrow agent within such time, the Escrow Agent shall have the right to appoint
a successor escrow agent. The successor escrow agent shall execute and deliver
an instrument accepting such appointment and it shall, without further acts, be
vested with all the estates, properties, rights, powers, and duties of the
predecessor escrow agent as if originally named as escrow agent. Upon
appointment of a successor escrow agent, the Escrow Agent shall be discharged
from any further duties and liability under this Agreement.
(i) LOCATION OF ESCROW FUND. The Escrow Agent shall hold the Escrow
Fund in an interest-bearing bank account.
(j) FEES. All fees of the Escrow Agent for performance of its duties
hereunder shall be paid by Buyer in accordance with the standard fee Schedule of
the Escrow Agent attached hereto as EXHIBIT G. It is understood that the fees
and usual charges agreed upon for services of the Escrow Agent shall be
considered compensation for ordinary services as contemplated by this Agreement.
In the event that the conditions of this Agreement are not promptly fulfilled,
or if the Escrow Agent renders any service not provided for in this Agreement,
or if the parties request a substantial modification of its terms, or if any
controversy arises, or if the Escrow Agent is made a party to, or intervenes in,
any litigation pertaining to the Escrow Fund or its subject matter, the Escrow
Agent shall be reasonably compensated for such extraordinary services and
reimbursed for all costs, attorney's fees, including allocated costs of in-house
counsel, and expenses occasioned by such default, delay, controversy or
litigation.
(k) CONSEQUENTIAL DAMAGES. In no event shall the Escrow Agent be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if the Escrow Agent
has been advised of the likelihood of such loss or damage and regardless of the
form of action.
(l) SUCCESSOR ESCROW AGENTS. Any corporation into which the Escrow
Agent in its individual capacity may be merged or converted or with which it may
be consolidated, or any corporation resulting from any merger, conversion or
consolidation to which the Escrow Agent in its individual capacity shall be a
party, or any corporation to which substantially all the corporate trust
business of the Escrow Agent in its individual capacity may be transferred,
shall be the Escrow Agent under this Agreement without further act.
7.3 BUYER INDEMNITY. Buyer shall indemnify and hold Seller and its
officers, directors and affiliates (the "SELLER PARTIES") harmless against all
Losses incurred by them directly or indirectly which exceed in the aggregate
$75,000 as a result of (i) any inaccuracy or breach of a representation or
warranty or Buyer contained in this Agreement, or (ii) any failure by Buyer to
perform or comply with any covenant contained in this Agreement.
7.4 THIRD PARTY CLAIMS. In the event that a party seeking indemnity
pursuant to this Agreement ("INDEMNITEE") shall become aware of a third-party
claim with respect to any matter as to which the other party ("INDEMNITOR") has
agreed to indemnify Indemnitee under the provisions of this Agreement (a "THIRD
PARTY CLAIM"), Indemnitee shall give notice thereof in writing to Indemnitor
together, in each instance, with a statement of such information respecting such
Third Party Claim as Indemnitee shall then have. Upon notice by Indemnitor of
its request to contest a Third Party Claim delivered to Indemnitee within twenty
(20) calendar days from the date of receipt by Indemnitor of notice of the Third
Party Claim, Indemnitor, may assume the right to contest and defend by all
appropriate legal or other proceedings the Third Party Claim with respect to
which it has been called upon to indemnify Indemnitee under the provisions of
this Agreement. If Indemnitor assumes such defense, Indemnitee shall have the
right to participate in, but not control, the defense thereof and to employ
counsel, at its own expense, separate from the counsel employed by Indemnitor.
If Indemnitor shall have assumed the defense of any claim, Indemnitee shall not
admit any liability with respect to, or settle, compromise or discharge, such
claim without Indemnitor's prior written consent. In no event may Indemnitee
settle any claim without the written consent of Indemnitor.
7.5 LIMITATIONS. Notwithstanding anything else in this Agreement, except as
provided herein:
(a) No claim for indemnification may be made by an Indemnified Party
more than one (1) year following the Closing Date; provided, however, that (i)
claims related to an alleged breach of the representations and warranties of
Seller set forth in SECTION 2.14 may be made during the applicable statute of
limitations period; and
(b) The maximum aggregate amount for all Losses for which Seller and
Meli shall indemnify the Indemnified Parties pursuant to this Article VII shall
be Two Million Five Hundred Thousand Dollars ($2,500,000).
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
8.1 TERMINATION. Except as provided in Section 8.2 below, this Agreement
may be terminated and the Acquisition abandoned at any time prior to the Closing
Date:
(a) by mutual consent of Seller and Buyer;
(b) by Buyer or Seller if: (i) through no fault of the terminating
party, the Closing has not occurred by November 4, 1999; (ii) there shall be a
final nonappealable order of a federal or state court in effect preventing
consummation of the Acquisition; or (iii) there shall be any statute, rule,
regulation or order enacted, promulgated, issued or deemed applicable to the
Acquisition by any Governmental Entity that would make consummation of the
Acquisition illegal;
(c) by Buyer if there shall be any action taken, or any statute, rule,
regulation or order enacted, promulgated, issued or deemed applicable to the
Acquisition by any Governmental Entity, which would: (i) prohibit Buyer's
ownership or operation of all or a material portion of the Business or the
Seller Assets, or (ii) compel Buyer to dispose of or hold separate all or a
portion of the Business or the Seller Assets or other businesses or Seller
Assets of Buyer as a result of the Acquisition;
(d) by Buyer if it is not in material breach of its obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of
Seller and such breach has not been cured within five (5) business days after
written notice to Seller (provided that, no cure period shall be required for a
breach which by its nature cannot be cured);
(e) by Seller if it is not in material breach of its obligations under
this Agreement and there has been a material breach of any representation,
warranty, covenant or agreement contained in this Agreement on the part of Buyer
and such breach has not been cured within five (5) business days after written
notice to Buyer (provided that, no cure period shall be required for a breach
which by its nature cannot be cured).
8.2 EFFECT OF TERMINATION. In the event of termination of this Agreement as
provided in Section 8.1, this Agreement shall forthwith become void and there
shall be no liability or obligation on the part of Buyer or Seller, or their
respective officers, directors or stockholders, provided that each party shall
remain liable for any breaches of this Agreement prior to its termination; and
provided further that, the provisions of Sections 4.2, 5.2, 5.3, 5.4 and Article
X of this Agreement shall remain in full force and effect and survive any
termination of this Agreement.
8.3 AMENDMENT. This Agreement may be amended by the parties hereto at any
time by execution of an instrument in writing signed on behalf of each of the
parties hereto.
8.4 EXTENSION; WAIVER. At any time prior to the Closing Date, Buyer on the
one hand, and Seller, on the other, may, to the extent legally allowed, (i)
extend the time for the performance of any of the obligations of the other party
or parties hereto, (ii) waive any inaccuracies in the representations and
warranties made to such party or parties contained herein or in any document
delivered pursuant hereto, and (iii) waive compliance with any of the agreements
or conditions for the benefit of such party contained herein. Any agreement on
the part of a party hereto to any such extension or waiver shall be valid only
if set forth in an instrument in writing signed on behalf of such party or
parties.
ARTICLE IX
CERTAIN POST-CLOSING COVENANTS
9.1 SCHEDULE. Buyer and Seller agree that the matters set forth on SCHEDULE
9 shall be completed following the Closing as set forth therein.
ARTICLE X
GENERAL PROVISIONS
10.1 ATTORNEYS' FEES. Subject to the provision of Section 7.2, if any party
to this Agreement brings an action against another party to this Agreement to
enforce its rights under this Agreement, the prevailing party in such action
shall be entitled to recover its reasonable costs and expenses, including
attorneys' fees and costs incurred in connection with such action, including the
appeal of such action.
10.2 NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally or by commercial
delivery service, or mailed by registered or certified mail (return receipt
requested) or sent via telecopy (with acknowledgment of complete transmission)
to the parties at the following addresses (or at such other address for a party
as shall be specified by like notice):
(a) if to Buyer, to:
ASA International, Ltd.
10 Speen Street
Framingham, MA 01701
Attention: Alfred C. Angelone
Telecopy No.: (508) 626-0644
with a copy to:
Stroock & Stroock & Lavan LLP
100 Federal Street, 33rd Floor
Boston, MA 02110
Attention: Paul D. Broude, Esquire
Telecopy No.: (617) 330-5111
(b) if to Seller, to;
Design Data Systems Corporation
13830 58th Street N., Suite 401
Clearwater, Florida 33760
Attention: Michael Meli
Telecopy No.: (813) 539-0646
with a copy to:
Brian C. Salvagni, Esq.
2242 Violet Court, Suite 1000
Avon, Ohio 44011
Telecopy No.: (440) 808-8160
and
John J. Agliano, Esq.
Annis, Mitchell, Cockey, Edwards & Roehn, P.A.
201 N. Franklin Street, Suite 2200
Tampa, Florida 33602
Telecopy No.: (813) 223-9067
(c) if to Escrow Agent, to:
Eastern Bank
53 State Street
Boston, MA 02109
Attention: John R. O'Brien, Vice President
Telecopy No.: (617) 263-2531
10.3 INTERPRETATION. When a reference is made in this Agreement to
Schedules or Exhibits, such reference shall be to a Schedule or Exhibit to this
Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement.
10.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement and
shall become effective when one or more counterparts have been signed by each of
the parties and delivered to the other party, it being understood that all
parties need not sign the same counterpart.
10.5 ENTIRE AGREEMENT. This Agreement and the Schedules and Exhibits
hereto: (a) constitute the entire agreement among the parties with respect to
the subject matter hereof and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter
hereof; (b) are not intended to confer upon any other person any rights or
remedies hereunder, unless expressly provided otherwise; and (c) shall not be
assigned by operation of law or otherwise except as otherwise specifically
provided; provided, however, that Buyer may assign this Agreement to either (i)
a subsidiary of Buyer or (ii) a Qualified Intermediary in connection with a
transaction intended to qualify under Section 1031 of the Internal Revenue Code
of 1986, as amended.
10.6 SEVERABILITY. In the event that any provision of this Agreement or the
application thereof, becomes or is declared by a court of competent jurisdiction
to be illegal, void or unenforceable, the remainder of this Agreement will
continue in full force and effect and the application of such provision to other
persons or circumstances will be interpreted so as reasonably to effect the
intent of the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and enforceable provision
that will achieve, to the extent possible, the economic, business and other
purposes of such void or unenforceable provision.
10.7 OTHER REMEDIES. Except as otherwise provided herein, any and all
remedies herein expressly conferred upon a party will be deemed cumulative with
and not exclusive of any other remedy conferred hereby, or by law or equity upon
such party, and the exercise by a party of any one remedy will not preclude the
exercise of any other remedy.
10.8 GOVERNING LAW AND JURISDICTION. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Massachusetts,
regardless of the laws that might otherwise govern under applicable principles
of conflicts of laws thereof. The parties agree that, subject to the provisions
of Section 7.2(g) hereof, the courts of the State of New York and the federal
courts located therein shall have exclusive jurisdiction over the resolution of
any disputes between the parties, and each party waives any objections based on
jurisdiction, venue, forum non conviens or similar matters, and consents to
service of process as provided by the rules of the State of New York.
10.9 RULES OF CONSTRUCTION. The parties hereto agree that they have been
represented by counsel during the negotiation and execution of this Agreement
and, therefore, waive the application of any law, regulation, holding or rule of
construction providing that ambiguities in an agreement or other document will
be construed against the party drafting such agreement or document.
<PAGE>
IN WITNESS WHEREOF, ASA International, Ltd. and Design Data Systems
Corporation have caused this Agreement to be signed by their duly authorized
respective officers, all as of the date first written above.
ASA INTERNATIONAL, LTD.
By: /S/ ALFRED C. ANGELONE
Name: ALFRED C. ANGELONE
Title: CHIEF EXECUTIVE OFFICER
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI, PRESIDENT
Name: MICHAEL R. MELI
Title: PRESIDENT
/S/ MICHAEL MELI
Michael Meli, with respect to Sections 4.2,
5.11 and 5.14 and Article VII
WITH RESPECT TO ARTICLE VII ONLY:
EASTERN BANK
By: /S/ TREVOR J. BLOOM
Name: TREVOR J. BLOOM
Title: ASSISTANT VICE PRESIDENT
EXHIBIT 10.1
ASSIGNMENT AND ASSUMPTION AGREEMENT
This ASSIGNMENT AND ASSUMPTION AGREEMENT is made, executed and delivered as
of the 4 day of November 1999 by and between ASA International, Ltd., a Delaware
corporation (the "Buyer"), and Design Data Systems Corporation, a Florida
corporation (the "Seller").
W I T N E S S E T H
WHEREAS, by Bill of Sale being executed and delivered by the Seller to the
Buyer simultaneously herewith pursuant to an Asset Purchase Agreement between
the Seller and the Buyer dated November 4, 1999 (the "Agreement"), the Seller is
selling, conveying, assigning, transferring and delivering to the Buyer or its
assignee all of the Seller Assets (capitalized terms used but not otherwise
defined herein shall have the meanings set forth in the Agreement), for the
consideration, in the amount and upon the terms and subject to the conditions
contained in the Agreement; and
WHEREAS, in consideration therefor, the Agreement requires that the Buyer
undertake to assume and to agree to perform, pay or discharge the Assumed
Liabilities.
NOW, THEREFORE,
1. The Seller hereby sells, conveys, assigns, transfers and delivers the
Seller Assets (excluding the Replacement Property, as defined in the Assignment
dated November 4, 1999 by and among Seller, Buyer and SQL Acquisition LLC) and
in consideration of such sale, conveyance, assignment, transfer and delivery,
the Buyer hereby undertakes, assumes and agrees to perform, to the extent not
heretofore performed, the Assumed Liabilities, as described in Section 1.1(c) of
the Agreement.
2. The assumption by the Buyer of an obligation of the Seller shall not be
construed to defeat, impair or limit, in any way, any rights, or remedies of the
Buyer to contest or dispute in good faith the validity or amount thereof.
3. Other than as specifically set forth above, the Buyer assumes no
liability of the Seller of any kind, character or description, including without
limitation, liabilities based on tort, contract or other claims.
4. Buyer agrees to defend, indemnify and hold Seller, and its directors,
officers, stockholders, agents, employees or consultants, harmless against and
in respect of any loss, cost, expense (including expenses of investigation),
claim, liability, deficiency, judgment or damage, including reasonable legal and
accounting fees and expenses incurred by Seller, its officers, directors,
stockholders, agents, employees or consultants, by reason of Buyer's failure to
satisfy or discharge in a timely manner any of the Assumed Liabilities. This
provision does not affect Buyer's rights and remedies, including without
limitation Buyer's indemnification rights pursuant to the Agreement.
5. This Agreement shall be enforceable against and inure to the benefit of
the successors and assigns of the Buyer and shall be enforceable against and
inure to the benefit of the successors and assigns of the Seller.
6. This Agreement shall be governed by and construed in accordance with the
laws of the Commonwealth of Massachusetts without regard to its conflicts of law
rules.
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by
the duly authorized officers of the Buyer and the Seller as of the date first
above written to be effective as of the 30th day of September, 1999.
ASA INTERNATIONAL, LTD.
By: /S/ ALFRED C. ANGELONE
Name: ALFRED C. ANGELONE
Title: CHIEF EXECUTIVE OFFICER
Attest:
By: /S/ BRIAN SALVAGNI
Name: BRIAN SALVAGNI
Title: _______________________________
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI, PRESIDENT
Name: MICHAEL R. MELI
Title: PRESIDENT
Attest:
By: /S/ BRIAN SALVAGNI
Name: BRIAN SALVAGNI
Title: _______________________________
EXHIBIT 10.2
BILL OF SALE AND GENERAL ASSIGNMENT OF ASSETS
KNOW ALL MEN AND WOMEN BY THESE PRESENTS THAT:
Design Data Systems Corporation, a Florida corporation ("Seller"), pursuant
to that certain Asset Purchase Agreement dated as of November 4, 1999 (the
"Agreement"), by and between the Seller and ASA International Ltd., a Delaware
corporation ("Buyer"), for and in consideration of good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
does hereby grant, bargain, sell, convey, transfer, assign, set over and deliver
to Buyer, its successors and assigns, all of Seller's right, title and interest
in and to all of the Seller Assets (excluding the Replacement Property, as
defined in the Assignment dated November 4, 1999 by and among Seller, Buyer and
SQL Acquisition LLC.) Capitalized terms used but not otherwise defined herein
shall have the meanings set forth in the Agreement.
TO HAVE AND TO HOLD all of the properties, assets and rights granted and
transferred hereby, with the appurtenances thereof, unto Buyer, its successors
and assigns forever, for their own use and benefit.
For the consideration aforesaid, Seller hereby constitutes and appoints
Buyer, its successors and assigns, the true and lawful attorney or attorneys of
Seller, with full power of substitution, for Seller and in its name and stead,
or otherwise, but on behalf and for the benefit of Buyer, its successors and
assigns, to demand and receive from time to time, any and all properties hereby
given, granted, bargained, sold, assigned, transferred, conveyed, set over,
confirmed and delivered and give receipts and releases for and in respect of the
same and any part thereof, and from time to time to institute and prosecute in
the name of Seller or otherwise, but for the benefit of Buyer, its successors
and assigns, any and all proceedings at law, in equity or otherwise, which
Buyer, its successors or assigns, may deem proper in order to collect, assert or
enforce any claim, right or title of any kind in and to the properties hereby
given, granted, bargained, sold, assigned, transferred, set over, conformed,
delivered or conveyed, and to defend or compromise any or all actions, suits or
proceedings in respect of any said properties and do all such acts and things in
relation thereto as Buyer, its successors and assigns, shall deem advisable,
Seller hereby declaring that the appointment made and the powers hereby granted
are coupled with an interest and are and shall be irrevocable by Seller in any
manner and for any reason.
Seller for itself and its successors and assigns, does hereby covenant with
Buyer, its successors and assigns, that Seller and its successors and assigns
will do, execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered all such further acts, deeds, bills of sale,
transfers, assignments and conveyances, powers of attorney, conveying and
confirming unto Buyer, its successors and assigns, all and singular, the
properties hereby granted, sold, assigned, transferred, conveyed and delivered
as Buyer, its successors or assigns, shall reasonably require, provided,
however, that the Buyer, its successors and assigns shall prepare all necessary
documentation in conformity with the terms and conditions of the Agreement at
Buyer's expense.
<PAGE>
This Bill of Sale and General Assignment of Assets may be executed in one
or more counterparts, each of which shall be an original, but which together
shall constitute one and the same instrument.
IN WITNESS WHEREOF, ASA International, Ltd. and Design Data Systems
Corporation have each caused this instrument to be signed in its name by its
duly authorized officer to be effective as of the 30 day of September, 1999.
ASA INTERNATIONAL, LTD.
By: /S/ ALFRED C. ANGELONE
Name: ALFRED C. ANGELONE
Title: CHIEF EXECUTIVE OFFICER
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI
Name: MICHAEL R. MELI
Title: PRESIDENT
<PAGE>
CERTIFICATION
COMMONWEALTH OF )
MASSACHUSETTS
) ss.
COUNTY OF SUFFOLK )
On this 4th day of November, 1999, before me, the undersigned, a Notary
Public for the Commonwealth of Massachusetts, personally appeared Michael R.
Meli, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed the foregoing instrument as President of
the corporation named therein, and acknowledged to me that he executed the same
as his voluntary act on behalf of such corporation with authority to do so for
the purposes therein set forth.
/S/ VIRGINIA A. THOMPSON,
---------------------------------------
Notary Public
My Commission expires: November 23, 2001
EXHIBIT 10.3
ASSIGNMENT OF TRADEMARKS
WHEREAS, Design Data Systems Corporation, a Florida corporation, having its
principal place of business at 13830 58th Street N., Suite 410, Clearwater,
Florida ("Assignor"), is the owner of the trademarks/service marks as listed on
SCHEDULE A attached hereto; and
WHEREAS, ASA International Ltd, a Delaware corporation, having its
principal place of business at 10 Speen Street, Framingham, Massachusetts
("Assignee"), is desirous of acquiring said trademarks/service marks together
with the good will of the business with which said trademark/service marks are
used and which are symbolized by said marks and any and all registrations and
applications for registration of said marks;
NOW, THEREFORE, be it known that for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Assignor, Assignor
has, subject to the penultimate paragraph hereof, assigned and by these
presents, does hereby sell, transfer, convey and assign unto Assignee the entire
right, title, and interest in and to said marks, all registrations and all
applications for registration of said marks, including without limitation the
right to recover for past infringement of said marks, and the good will of the
business in connection with which said marks are used and which are symbolized
by said marks (excluding marks constituting part of the Replacement Property, as
defined in the Assignment dated November 4, 1999 by and among Seller, Buyer and
SQL Acquisition LLC.)
Assignor hereby covenants and represents that the execution, delivery and
performance of this Trademark Assignment by Assignor has been duly and validly
authorized by all necessary corporate action and this Trademark Assignment has
been duly and validly executed and delivered by Assignor and constitutes a valid
and legally binding agreement of Assignor, enforceable against Assignor in
accordance with its terms. The execution, delivery and performance of this
Trademark Assignment does not conflict with, result in a breach of, or
constitute a default under any applicable law, judgment, order, injunction,
decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby further covenants and agrees that Assignor will communicate
to Assignee, its successors, legal representatives and assignees, any facts
known to Assignor respecting said marks, and at Assignee's sole expense testify
in any legal proceeding, sign all lawful papers, execute all applications for
registration, make all rightful oaths, and generally do everything possible to
aid the said Assignee, its successors, legal representatives and assigns, to
obtain and enforce proper protection for said marks in all countries.
<PAGE>
Assignor and Assignee agree that, notwithstanding any other provision of
this Trademark Assignment, this Trademark Assignment shall be effective on and
after September 30, 1999.
IN WITNESS WHEREOF, this Assignment of Trademarks is executed at Boston,
Massachusetts, this 4 th day of November, 1999.
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI, PRESIDENT
Name: MICHAEL R. MELI
Title: PRESIDENT
ATTEST:
By: /S/ BRIAN SALVAGNI
Name: BRIAN SALVAGNI
Title: __________________________________
<PAGE>
CERTIFICATION
COMMONWEALTH OF )
MASSACHUSETTS
) ss.
COUNTY OF SUFFOLK )
On this 4th day of November, 1999, before me, the undersigned, a Notary
Public for the Commonwealth of Massachusetts, personally appeared Michael R.
Meli, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the person who executed the foregoing instrument as President of
the corporation named therein, and acknowledged to me that he executed the same
as his voluntary act on behalf of such corporation with authority to do so for
the purposes therein set forth.
/S/ VIRGINIA A THOMPSON
Notary Public
My Commission expires: November 23, 2001
<PAGE>
SCHEDULE A TO ASSIGNMENT OF TRADEMARKS
EXHIBIT 10.4
ASSIGNMENT OF COPYRIGHTS
WHEREAS, Design Data Systems Corporation, a Florida corporation, having its
principal place of business at 13830 58th Street N., Suite 410, Clearwater,
Florida ("Assignor"), owns all right, title and interest in original works
(whether regarded as literary works or computer programs under applicable law)
relating to certain products designed and manufactured by Assignor, including,
but not limited to, those listed on SCHEDULE A attached hereto (collectively,
the "Work", but excluding works constituting part of the Replacement Property,
as defined in the Assignment dated November 4, 1999 by and among Seller, Buyer
and SQL Acquisition LLC); and
WHEREAS, ASA International Ltd., a Delaware corporation having its
principal place of business at 10 Speen Street, Framingham, Massachusetts
("Assignee"), desires to obtain the entire right, title, and interest in, to and
under the Work including the copyright(s) thereof;
NOW, THEREFORE, for good and valuable consideration paid by the Assignee to
the Assignor simultaneously herewith, pursuant to that certain Asset Purchase
Agreement dated as of November 4, 1999 (the "Agreement"), receipt of which is
hereby acknowledged by the Assignor, and for other good and valuable
consideration, the said Assignor, subject to the penultimate paragraph hereof;
Assignor hereby assigns, transfers and sets over unto the Assignee the
entire right, title, and interest in and to the Work, the entire right, title
and interest in and to any and all statutory or common law copyrights or
copyright registrations covering the Work, including: any and all renewals and
extensions of those copyrights that may be secured under the laws now or
hereafter in force in the United States and throughout the world; any and all
causes of action heretofore accrued in the Assignor's favor for infringement of
the aforesaid copyright(s); and any and all rights, including but not limited
to, the rights to reproduce the Work in copies or other embodiment; to prepare
derivative works based upon the Work; to distribute copies or other embodiments
of the Work to the public by sale or other transfer of ownership, or by rental,
lease or lending; to perform the Work publicly; and to display the Work
publicly;
To have and to hold the same unto the Assignee, its successors, legal
representatives and assigns, for and during the existence of all copyright(s)
and any and all renewals and extensions thereof absolutely and forever; and
Assignor hereby authorizes and requests the Register of Copyrights of the United
States, and any official of any country or countries foreign to the United
States, and any official of any country or countries foreign to the United
States, whose duty it is to issue copyright registrations or similar indicia of
copyright, to issue such copyright, registrations for said Work to Assignee, its
successors, legal representatives and assigns.
Assignor hereby covenants and represents that the execution, delivery and
performance of this Copyright Assignment by Assignor has been duly and validly
authorized by all necessary corporate action and this Copyright Assignment has
been duly and validly executed and delivered by Assignor and constitutes a valid
and legally binding agreement of Assignor, enforceable against Assignor in
accordance with its terms. The execution, delivery and performance of this
Copyright Assignment does not conflict with, result in a breach of, or
constitute a default under, any applicable law, judgment, order, injunction,
decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby covenants and agrees that Assignor shall forthwith upon
Assignee's written request and at Assignee's sole expense take any and all steps
and execute, acknowledge, and deliver to the Assignee any and all further
instruments and assurances necessary or expedient in order to vest the aforesaid
Work and copyright(s) and causes of action more effectively in the Assignee.
Assignor hereby further covenants and agrees that Assignor will communicate
to the Assignee, its successors, legal representatives and assigns, any facts
known to Assignor respecting said Work and said copyright(s), and at Assignee's
sole expense testify in any legal proceedings, sign all lawful papers, execute
all copyright applications and copyright renewal applications, make all rightful
oaths, and generally do everything possible to aid the said Assignee, its
successors, legal representatives and assigns, to obtain and enforce proper
copyright protection for said Work in all countries.
Assignor hereby constitutes and appoints the Assignee its true and lawful
attorney-in-fact with full power of substitution, in Assignor's name and stead,
but for the Assignee's benefit, to take any and all steps (including proceeding
at law, in equity or otherwise), and to execute, acknowledge and deliver any and
all instruments and assurances necessary or expedient in order to vest the
aforesaid Work and copyright(s) and causes of action more effectively in the
Assignee, or to protect the same, or to enforce any claim or right of any kind
with respect thereto. The Assignor hereby declares that the foregoing power is
coupled with an interest and is irrevocable.
Assignor and assignee agree that, notwithstanding any other provision of
this Copyright Assignment, this Copyright Assignment shall be effective on and
after September 30, 1999.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Copyrights is executed at Boston,
Massachusetts, this 4 day of November, 1999.
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI, PRESIDENT
--------------------------------
Name: MICHAEL R. MELI
Title: PRESIDENT
ATTEST:
By: /S/ BRIAN SALVAGNI
- --------------------------
Name: BRIAN SALVAGNI
Title:
<PAGE>
CERTIFICATION
COMMONWEALTH OF MASSACHUSETTS )
) ss.
COUNTY OF SUFFOLK )
On this 4th day of November, 1999, before me, the undersigned, a Notary
Public for the Commonwealth of Massachusetts, personally appeared Michael
R. Meli, personally known to me (or proved to me on the basis of
satisfactory evidence) to be the person who executed the foregoing
instrument as President of the corporation named therein, and acknowledged
to me that he executed the same as his voluntary act on behalf of such
corporation with authority to do so for the purposes therein set forth.
/S/ VIRGINIA A. THOMPSON
----------------------------
Notary Public
My Commission expires: NOVEMBER 23, 2001
<PAGE>
SCHEDULE A TO ASSIGNMENT OF COPYRIGHTS
EXHIBIT 10.5
ASSET ACQUISITION AND EXCHANGE COOPERATION AGREEMENT
This ASSET ACQUISITION AND EXCHANGE COOPERATION AGREEMENT
("Agreement") is made and entered into as of this 4th day of November, 1999 by
and among ASA International, Ltd., a Delaware corporation, (the "Exchanger"),
SQL Acquisition LLC, a Delaware limited liability company ("SQL"), Fidelity
National 1031 Exchange Services, Inc., a California corporation ("Qualified
Intermediary"), and Pacific American Property Exchange Corporation, a California
corporation and the sole member and manager of SQL ("Pacific").
RECITALS
A. Exchanger presently owns and uses in its business certain assets,
one or more of which may be identified under this Agreement as a Relinquished
Property;
B. Exchanger anticipates transferring the Relinquished Property to a
third party buyer (the "Transferee") pursuant to a purchase and sale agreement
to be entered into between Exchanger and the Transferee (the "Relinquished
Property Transfer Agreement"). Exchanger desires to reserve the ability to
dispose of the Relinquished Property through Qualified Intermediary by effecting
a like-kind exchange (the "Exchange") within the meaning of Section 1031 of the
Internal Revenue Code of 1986, as amended (the "Code");
C. Qualified Intermediary and SQL are willing to assist Exchanger in
completing the Exchange, if Exchanger, in its sole discretion, determines to
effect the same. To that end, SQL is contemporaneously herewith accepting an
assignment of certain of Exchanger's rights under a Replacement Property
Acquisition Agreement pursuant to which SQL will acquire from the Seller (as
defined herein) certain assets, including computer software and intellectual
property, as described in more detail in Exhibit "A" attached hereto (the
"Replacement Property");
D. SQL desires to license the Replacement Property to Exchanger (for
this purpose, "Licensee"), pursuant to a License approved as to form by SQL and
Licensee;
E. SQL will cooperate with financing arranged by Exchanger with the
Prime Lender (if any) and Subordinated Lender (if any) pursuant to the one or
more Acquisition Loans (as defined herein) for the purpose of acquiring the
Replacement Property.
F. If Exchanger elects to effect the Exchange, it may, in its sole
discretion and by written notice to the Qualified Intermediary and SQL,
designate the Replacement Property as "replacement property" (within the meaning
of Treas. Reg. ss 1.1031(k)-1(a)) in connection with the Exchange. In such
event, SQL will cooperate with Exchanger and Qualified Intermediary in order to
complete the Exchange under the terms and conditions provided herein;
G. If Exchanger elects to effect the Exchange, Exchanger shall direct
Qualified Intermediary to: (1) accept an assignment from Exchanger of certain of
Exchanger's rights under the Relinquished Property Transfer Agreement in order
to receive the net purchase price for the Relinquished Property (the "Transfer
Price"); (2) obtain the right to acquire the Replacement Property from SQL; and
(3) pay the Purchase Price (as determined herein) for the Replacement Property
and then transfer, or cause the transfer of, title to and ownership of the
Replacement Property to Exchanger in order to complete the Exchange; and
H. If Exchanger does not elect to effect the Exchange, SQL may dispose
of the Replacement Property pursuant to the terms hereof, or, alternatively, may
retain ownership of the Replacement Property and continue to enforce the terms
of the License, subject to the terms and conditions provided herein.
NOW, THEREFORE, in consideration of the mutual premises set forth
herein, the parties hereby agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms
shall have the meanings provided below:
"Acquisition Cost" shall have the meaning provided in Section 3.2.4.2.
"Acquisition Loan" shall mean the Prime Loan and/or Subordinated Loan,
if any, providing financing for SQL's acquisition of the Replacement Property.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
"Contract Period" shall mean a period of twelve (12) calendar months
commencing when SQL acquires the Replacement Property.
"Excess Amount" shall have the meaning provided in Section 3.2.3.
"Exchange" shall mean the like kind exchange contemplated by this
Agreement.
"Exchanger" shall mean ASA International, Ltd., a Delaware
corporation, whose address is 10 Speen Street, Framingham, MA 01701 and whose
facsimile telephone number is 508-626-0644.
"Exchanger Representative" shall mean Alfred C. Angelone, whose
address is 10 Speen Street, Framinghame, MA 01701 and whose facsimile telephone
number is 508-626-0644, and any other individual from time to time designated in
writing by Exchanger.
"Excluded Costs" shall have the meaning provided in Section 3.2.4.3.
"Fair Market Value" shall have the meaning provided in Section
3.2.4.1.
"Forum State" shall mean the Commonwealth of Massachusetts.
"Indemnified Parties" shall mean (i) Qualified Intermediary, (ii)
Pacific (iii) SQL, and (iv) their respective officers, agents, shareholders,
managers, employees and assigns.
"Lender[s]" shall mean the Prime Lender and Subordinated Lender.
"License" shall mean the license of the Replacement Property by SQL to
Licensee which will be entered into concurrently with SQL's acquisition of the
Replacement Property, the form of which has been approved by SQL, Licensee and
Exchanger.
"Licensee" shall mean ASA International, Ltd., a Delaware corporation.
"Loan Documents" shall collectively refer to (as applicable) the Prime
Loan Promissory Note, Prime Loan Security Agreement, Subordinated Loan
Promissory Note and Subordinated Security Agreement.
"Option Notice" shall have the meaning provided in Section 6.
"Pacific" shall mean Pacific American Property Exchange Corporation, a
California corporation, whose notice address is: 2390 E. Camelback Road, Suite
210, Phoenix, Arizona 85016, Attention: E. Jill Mozer, Vice President.
"Prime Lender" shall mean Eastern Bank.
"Prime Loan" shall mean a loan, if any, from Prime Lender.
"Prime Loan Security Agreement" shall mean the security agreement
between Prime Lender and SQL.
"Prime Loan Promissory Note" shall mean the promissory note signed by
SQL, as borrower, for funds borrowed from Prime Lender.
"Purchase Price" shall have the meaning provided in Section 3.2.2.
"Qualified Intermediary" shall mean Fidelity National 1031 Exchange
Services, Inc., a California corporation, whose notice address is: 2390 E.
Camelback Road, Suite 210, Phoenix, Arizona 85016, Attention: E. Jill Mozer,
Vice President.
"Qualified Intermediary Assignment" shall mean a form of assignment
described in Treas. Reg. ss. 1.1031(k)-1(g)(4)(iv).
"QI Credit Amount" shall mean the aggregate net proceeds received by
the Qualified Intermediary from the sale of any Relinquished Property.
"Relinquished Property" shall mean the real property or properties
identified by Exchanger to be exchanged for the Replacement Property.
"Relinquished Property Transfer Agreement" shall mean the agreement
under which Exchanger intends to effect a disposition of the Relinquished
Property.
"Regulations" shall mean the Treasury Regulations promulgated to
interpret the Code, as they may be amended from time to time.
"Replacement Property" shall have the meaning set forth in paragraph C
of the Recitals.
"Replacement Property Transfer Assignment" shall mean the assignment
and bill of sale executed and delivered by SQL to convey or assign all of its
rights and interests in the Replacement Property to the Exchanger or its
Permitted Assignees.
"Replacement Property Acquisition Agreement" shall mean the written
agreement between Exchanger and Seller dated November 4, 1999, as amended to
date and the related conveyancing instruments, providing for and effecting the
acquisition of the Replacement Property by Exchanger.
"SQL" shall mean SQL Acquisition LLC, a Delaware limited liability
company, whose notice address is: 2390 E. Camelback Road, Suite 210, Phoenix,
Arizona 85016, Attention: E. Jill Mozer.
"Seller" shall mean Design Data Systems Corporation, a Florida
corporation.
"Subordinated Lender" shall mean the Exchanger who provides funds for
SQL to acquire the Replacement Property as provided herein and whose security is
subordinate to that of Prime Lender.
"Subordinated Loan" shall mean the loan, if any, from Subordinated
Lender.
"Subordinated Loan Promissory Note" shall mean the promissory note
signed by SQL, as borrower, for funds borrowed from Subordinated Lender.
"Subordinated Loan Security Agreement" shall mean security agreement
between Subordinated Lender and SQL.
"Termination Events" shall have the meaning provided in Section 4.2.
"Termination Notice" shall have the meaning provided in Section 4.1.
"Termination Sale Notice" shall have the meaning provided in Section
10.1.
"Termination Sale Proceeds" shall have the meaning provided in Section
10.3.
"Transfer Price" shall have the meaning set forth in paragraph G of
the Recitals.
"Transferee" shall mean the person or persons who acquires the
Relinquished Property from Qualified Intermediary.
"Unrelated Liens" shall have the meaning provided in Section 3.3.3.
"Written Authorization" shall mean any written request, demand,
authorization, direction, notice, consent or waiver required or contemplated to
be delivered under this Agreement to SQL or to Qualified Intermediary, which
shall be signed by Exchanger Representative.
2. ACQUISITION OF THE REPLACEMENT PROPERTY.
2.1 ASSIGNMENT OF REPLACEMENT PROPERTY ACQUISITION AGREEMENT.
2.1.1 Upon execution of this Agreement and subject to the
execution by Seller of such documentation as SQL may reasonably require,
Exchanger hereby assigns and SQL accepts the assignment of Exchanger's right and
obligation to acquire the Replacement Property from the Seller pursuant to the
terms of the Replacement Property Acquisition Agreement.
2.1.2 Subject to the terms of the Replacement Property
Acquisition Agreement and this Agreement, SQL shall acquire the Replacement
Property from Seller.
2.1.3 The assignment provided in Section 2.1.1 shall be null
and void in the event SQL does not acquire title to the Replacement Property by
means of the closing procedures provided in the Replacement Property Acquisition
Agreement.
2.2 FINANCING.
2.2.1 In order to finance the acquisition of the Replacement
Property, SQL shall, if necessary, borrow funds from the Prime Lender and, if
necessary, the Subordinated Lender. SQL shall comply with all the terms and
conditions of the Loan Documents and enter into such other agreements and
assignments as may be required thereby.
2.2.2 SQL shall have no obligation to advance any funds
towards the acquisition of the Replacement Property in excess of (i) funds
supplied by Prime Lender or Subordinated Lender or (ii) funds supplied by the
Qualified Intermediary derived from sale of the Relinquished Property.
2.2.3 The terms and conditions of the Prime Loan shall be
negotiated and arranged by Exchanger, at no cost to SQL. The documentation for
the Prime Loan shall be subject to the review and reasonable approval of SQL.
The Loan Documents shall each contain an express waiver by Lender in a form
acceptable to Qualified Intermediary of any right to collect under any legal
theory or claim from any Indemnified Party (other than SQL) any amounts due
under the Loan Documents.
2.3 LICENSE.
2.3.1 Simultaneously with the acquisition of the Replacement
Property, SQL and Licensee shall enter into the License.
2.3.2 The terms and conditions of the License shall be
arranged by Exchanger at no cost to SQL. The License documentation shall be
subject to the review and reasonable approval of SQL. The License documentation
shall contain an express waiver by Licensee of any right to assert or pursue any
claim under any legal theory against any Indemnified Party (other than SQL)
under the License and an indemnification of each Indemnified Party by Licensee
of any claim asserted by Seller or any other third party against SQL under the
License. The form of such waiver and indemnification shall be approved by SQL
and Qualified Intermediary.
2.4 LICENSE ASSIGNMENT. At the written direction of
Exchanger, if Exchanger elects to dispose of the Relinquished Property as part
of an Exchange, SQL shall execute and deliver the Replacement Property Transfer
Assignment to Exchanger.
3. EXCHANGE COOPERATION.
3.1 TRANSFER OF RELINQUISHED PROPERTY; QUALIFIED INTERMEDIARY
ASSIGNMENT.
3.1.1 If Exchanger elects to dispose of the Relinquished
Property as part of the Exchange, then Exchanger shall direct the Qualified
Intermediary to deliver to SQL in exchange for the Replacement Property an
amount equal to the lesser of (i) the net QI Credit Amount or (ii) the Purchase
Price.
3.1.2 Prior to the delivery of such amount to SQL, Exchanger
shall assign to the Qualified Intermediary its rights under this Agreement to
acquire the Replacement Property pursuant to a form of assignment described in
Regulations ss 1.1031(k)-1(g)(4)(iv). The assignment shall provide for SQL to
deliver all of the title to and ownership of the Replacement Property held by
SQL directly to Exchanger without the need for the Qualified Intermediary to
take title thereto. SQL agrees to consent to the Qualified Intermediary
Assignment.
3.2 TRANSFER OF REPLACEMENT PROPERTY BY SQL; PURCHASE PRICE.
3.2.1 Upon receipt of the consideration provided for in
Section 3.1.2 hereof from the Qualified Intermediary, and consistent with the
Qualified Intermediary Assignment, SQL shall deliver to the Qualified
Intermediary or, upon the direction of the Qualified Intermediary, to Exchanger
the Replacement Property Transfer Assignment.
3.2.2 The Purchase Price for the Replacement Property shall
equal its "Fair Market Value," as hereinafter defined.
3.2.3 If, in connection with the Exchange, the Purchase
Price exceeds the aggregate amount of the QI Credit Amount received by SQL from
the Qualified Intermediary (such excess hereinafter referred to as the "Excess
Amount"), Exchanger shall pay to SQL the Excess Amount, in immediately available
funds, upon delivery of the Replacement Property Transfer Assignment.
3.2.4 For purposes of this Agreement, the following
definitions shall apply:
3.2.4.1 "Fair Market Value" of the Replacement Property
shall mean the fair market value determined by a nationally recognized appraiser
as may be agreed to by Exchanger and SQL (the "Appraiser"); provided, however,
that if the Replacement Property is purchased from SQL within twelve (12) months
after the date on which SQL acquired the Replacement Property, then the "Fair
Market Value" shall be deemed to equal its "Acquisition Cost" as hereinafter
defined.
3.2.4.2 "Acquisition Cost" shall mean the sum of (i) the
purchase price paid by SQL to the Seller to acquire the Replacement Property;
(ii) all sales, transfer or similar taxes, and all charges and closing costs
paid by SQL in connection with its purchase of the Replacement Property; (iii)
all interest, charges and other fees (including pre-payment fees in connection
with mandatory pre-payments) under the Loan Documents which are not paid
pursuant to the License or otherwise reimbursed to SQL by Exchanger, and (iv)
any and all unreimbursed costs, liabilities and expenses (including any state or
local transfer, excise taxes, use tax or other tax) of any kind incurred by SQL
in connection with the acquisition, ownership, or operation of the Replacement
Property, the disposition of the Replacement Property, as contemplated herein,
or the completion of the Exchange, except for "Excluded Costs" as defined below.
3.2.4.3 "Excluded Costs" shall mean the sum of ONLY: (i)
professional fees and administrative costs and fees (including overhead costs)
incurred by SQL in connection with the transactions contemplated hereunder or
its organization or operation (but not including any such fees that SQL is
entitled to be indemnified for under any other provision of this Agreement);
(ii) all principal and any penalties paid or accrued under the Loan Documents
(other than penalties attributable to any default by Licensee under the
License), (iii) any claims or losses incurred by SQL as to which Exchanger is
expressly excused from reimbursing SQL under a separate provision hereof and
(iv) any and all income taxes and similar taxes based upon or measured by SQL's
income. The foregoing notwithstanding, any professional fees and costs incurred
by SQL in connection with, or as a result of, a default under or breach of this
Agreement by Exchanger or a default under or breach of the License by Licensee
shall not be considered "Excluded Costs" hereunder.
3.2.5 If Fair Market Value hereunder is to be determined by
an appraisal, Exchanger shall be solely responsible for timely retaining the
Appraiser and paying all of the Appraiser's fees and expenses. If Fair Market
Value hereunder is to be determined by reference to Acquisition Costs, SQL shall
provide Exchanger with an accounting thereof at least five (5) days prior to the
closing date for the transfer of the Replacement Property.
3.2.6 Exchanger shall have no right to receive, control,
pledge, borrow, assign or otherwise obtain the benefits of any portion of any
Exchange funds held by Qualified Intermediary except to have such Exchange funds
applied to acquire the Replacement Property in accordance with this Agreement.
3.3 ADDITIONAL DELIVERY; LIENS.
3.3.1 At such time as SQL delivers the Replacement Property
Assignment to Exchanger pursuant to Section 3.2.1 hereof, SQL shall also deliver
to Exchanger (i) any insurance proceeds pertaining to the Replacement Property
which SQL may have received, except to the extent such proceeds have been
reinvested or otherwise applied as required under the Loan Documents, and (ii)
assignments of any insurance proceeds pertaining to the Replacement Property
which SQL may be entitled to receive but has not received.
3.3.2 The Replacement Property delivered by SQL pursuant to
Section 3.2.1 hereof shall be subject to such liens, encumbrances or
restrictions as may exist at the date the Exchange is completed, including the
liens and encumbrances created under the Security Agreement and any lien or
encumbrance arising because of any default by Licensee under the License or any
breach by Exchanger of this Agreement; provided, however, that the Replacement
Property shall be free and clear of any Unrelated Liens. In addition, SQL shall
assign to Exchanger all representations, warranties and covenants from the
Seller pertaining to the Replacement Property which have been obtained by SQL
and all of its rights and obligations under the License. "Unrelated Liens" shall
mean any liens, encumbrances or restrictions created or suffered to exist by SQL
with respect to the Replacement Property except for any lien (i) any lien
specifically authorized or contemplated in this Agreement, the Promissory Note
or Security Agreement or (ii) which arises as a result of Licensee's default
under or breach of the License or Exchanger's default under this Agreement.
3.3.3 Without limiting the generality of the foregoing, the
term "Unrelated Liens" shall include any liens, encumbrances or restrictions (i)
created by SQL for money borrowed (other than the Acquisition Loan); (ii)
created by SQL or suffered by SQL in connection with its activities in any
respect not pertaining to the Replacement Property or this Agreement; or (iii)
created by SQL in violation or breach of this Agreement, the Promissory Note,
Security Agreement, or the License. Unrelated Liens do not include any lien or
encumbrance arising from acts or omissions of Seller or the Licensee or any lien
or encumbrance in existence at the time SQL acquired its interest in the
Replacement Property.
3.4 REPRESENTATIONS AND WARRANTIES; TITLE. Except as expressly
provided herein, SQL shall not be obligated to make any representations and
warranties to Exchanger in connection with the transfer of the Replacement
Property pursuant to Section 3.2 hereof. Without limiting the generality of the
foregoing and except as prohibited by law, Exchanger shall be required to accept
the Replacement Property pursuant to Section 3.2 hereof regardless of (i)
defects in title or encumbrances, other than Unrelated Liens; (ii) any
unfavorable tax rulings; or (iii) any other matter or condition affecting or
relating to the Replacement Property or the right or power of Exchanger to take
or maintain possession of and operate the Replacement Property, except for
Unrelated Liens.
3.5 TERMINATION OF EXCHANGE COOPERATION REQUIREMENT. Unless this
Agreement is earlier terminated by the parties hereto, the obligation of SQL and
Qualified Intermediary to cooperate in the completion of the Exchange pursuant
to this Section 3 shall terminate upon the first to occur of: (i) the date on
which Exchanger, through the Qualified Intermediary, completes the acquisition
of the Replacement Property as Replacement Property in the Exchange and pays to
SQL any Excess Amount under Section 3.2 hereof or (ii) the date on which SQL
transmits a valid Exchange Termination Notice pursuant to Section 4.1 hereof.
The foregoing notwithstanding, if any further action on SQL's part is necessary
or desirable to carry out the purposes of this Agreement after Exchanger
acquires the Replacement Property, SQL will take all such further actions
(including the execution and delivery of further instruments or documents) as
Exchanger may reasonably request, at the sole cost and expense of Exchanger
(other than SQL's internal administrative costs, including overhead, which costs
shall be borne by SQL).
3.6 TAX CONSEQUENCES. Neither party hereto shall assume
responsibility for the income tax consequences to the other party arising out of
the Exchange contemplated by this Agreement. Exchanger acknowledges that it has
consulted with its own advisors with respect to the tax and other legal aspects
of the Exchange and has not relied upon SQL or its advisors for any tax or legal
advice. Notwithstanding the foregoing, Exchanger shall not be excused from
indemnifying the Indemnified Parties as separately required herein for certain
transfer taxes and other non-income taxes.
3.7 EXCHANGER REPRESENTATIVE; WRITTEN AUTHORIZATION. Whenever
Exchanger has under this Agreement any right to make any election or give any
direction to SQL or Qualified Intermediary, SQL and Qualified Intermediary are
hereby authorized and directed to accept any Written Authorization delivered to
SQL or Qualified Intermediary from Exchanger Representative to the extent such
Written Authorization is consistent with the terms of this Agreement. SQL and
Qualified Intermediary may assume, without liability for error, that any fact or
statement set forth in any Written Authorization is correct. The identity of any
person or the date any instrument or writing required or contemplated to be
given under this Agreement to SQL or to Qualified Intermediary may be proved to
SQL and Qualified Intermediary in any reasonable manner either of them deems
sufficient.
4. EXCHANGER'S FAILURE TO CONSUMMATE EXCHANGE.
4.1 TERMINATION NOTICE. If SQL continues to hold any interest in
the Replacement Property after the occurrence of either of the below-described
"Termination Events," then SQL and Qualified Intermediary may, in their sole
discretion, by written notice to Exchanger sent by either of SQL or Qualified
Intermediary at any time within thirty (30) days after the occurrence of the
Termination Event (the "Termination Notice"), terminate their respective
obligations to complete the Exchange contemplated herein and may also, in their
sole discretion, invoke the remedies and indemnity provisions set forth in
Section 10 hereof.
4.2 TERMINATION EVENTS. For purposes hereof, the following events
shall be considered "Termination Events" hereunder:
4.2.1 if SQL holds an interest in the Replacement Property
as of a date which is ten (10) days prior to the stated maturity date of any
Prime Loan (or the equivalent date under any and all refinancings, renewals,
extensions or modifications thereof); or
4.2.2 if Exchanger or any successor or assign shall be
dissolved or liquidated, shall make an assignment for the benefit of creditors,
shall file a petition in bankruptcy, shall be adjudicated insolvent or bankrupt,
shall petition or apply to any tribunal for any receiver or trustee, shall
commence any proceeding relating to itself under any bankruptcy, reorganization,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, shall have commenced against it any such proceeding which remains
undismissed for a period of ninety (90) days, shall indicate its consent to,
approval of or acquiescence in any such proceeding or shall suffer the
appointment of any receiver of or trustee for it or for substantially all of its
property which shall continue undischarged for a period of ninety (90) days; or
4.2.3 if Licensee shall default under terms of the License
and such default shall remain uncured for more than thirty (30) days after
notice from SQL to Licensee; or
4.2.4 or if the Contract Period has ended.
5. SQL FAILURE TO COMPLETE EXCHANGE. If (i) SQL or any successor
thereof, shall be dissolved or liquidated, shall make an assignment for the
benefit of creditors, shall file a petition in bankruptcy, shall be adjudicated
insolvent or bankrupt, shall petition or apply to any tribunal for any receiver
or trustee, shall commence any proceeding relating to itself under any
bankruptcy, reorganization, readjustment of debt, dissolution or liquidation law
or statute of any jurisdiction, shall have commenced against it any such
proceeding which remains undismissed for a period of ninety (90) days, shall
indicate its consent to, approval of or acquiescence in any such proceeding or
shall suffer the appointment of any receiver of or trustee for it or any
substantial part of its property which shall continue undischarged for a period
of ninety (90) days, or (ii) SQL shall fail to consummate its obligations as
provided in Section 3 hereof with respect to the transfer of the Replacement
Property to Exchanger, then in each such event, Exchanger shall be entitled, in
its sole discretion, by written notice to SQL, to the remedies provided in
Section 11 hereof.
6. EXCHANGER'S PURCHASE OPTION. At any time prior to the occurrence of
a Termination Event, Exchanger shall have the right, upon delivery of written
notice to SQL (the "Option Notice"), to purchase the Replacement Property from
SQL for cash in an amount equal to the "Fair Market Value" as determined under
Section 3.2 hereof as of the date of the Option Notice.
In the event Exchanger exercises its option hereunder, the Option
Notice shall set forth a date no later than ten (10) business days after the
date of such notice for a closing at which SQL shall transfer and assign all
right, title and interest in and to the Replacement Property held by SQL to
Exchanger. Exchanger shall have the obligation to accept at such closing the
Replacement Property held by SQL, as provided in Section 3.4 hereof.
7. REPRESENTATIONS AND WARRANTIES OF SQL. SQL hereby represents and
warrants to Exchanger as follows:
7.1 DUE ORGANIZATION; AUTHORITY; ENFORCEABILITY. SQL is a
Delaware limited liability company, duly organized, and validly existing under
the laws of the state of its formation, with the power and authority to make,
execute, deliver and perform its obligations under this Agreement and all of the
transactions contemplated under this Agreement and has taken all necessary
action to authorize the execution, delivery and performance of this Agreement.
This Agreement constitutes a valid and binding obligation of SQL, enforceable
against SQL in accordance with its terms, subject, as to enforcement to
bankruptcy, insolvency, reorganization, moratorium and other laws of general
applicability relating to or affecting creditors' rights and to general
equitable principles.
7.2 CONFLICT WITH EXISTING LAWS OR CONTRACT. The execution and
delivery of this Agreement, and all related documents, and the performance of
its obligations hereunder and thereunder by SQL (i) does not conflict with or
result in a breach of or constitute a default under any of the terms, conditions
or provisions of the articles of incorporation or bylaws (or, as applicable, the
certificate of formation or operating agreement) of SQL or of any agreement or
instrument to which SQL is a party or by which SQL is bound or any order or
decree applicable to SQL, or (ii) will not result in the creation or imposition
of any lien (except for the lien contemplated the Loan Documents) any of SQL's
assets or property, which would materially and adversely affect the ability of
SQL to execute and deliver this Agreement and perform its obligations hereunder;
and SQL has obtained all consents, approvals, authorizations or orders of any
court or governmental agency or body, if any, required for the execution and
delivery by SQL of this Agreement.
7.3 LEGAL ACTION AGAINST SQL. There are no judgments, orders, or
decrees of any kind against SQL unpaid or unsatisfied of record nor any legal
action, suit or other legal or administrative proceeding pending or to SQL's
knowledge threatened against SQL, before any court or administrative agency
which has, or is likely to have, any material or adverse effect on the business
or assets or the condition, financial or otherwise, of SQL or which prevents the
ability of SQL to perform hereunder.
7.4 BANKRUPTCY OR DEBT OF SQL; FINANCIAL CONDITION. SQL has not
filed any petition seeking or acquiescing in any reorganization, arrangement,
composition, readjustment, liquidation, dissolution or similar relief under any
law relating to bankruptcy or insolvency, nor has any such petition been filed
against SQL. No general assignment of SQL's property has been made for the
benefit of creditors, and no receiver, master, liquidator or trustee has been
appointed for SQL or any of its property. SQL is not insolvent and the
consummation of the transactions contemplated by this Agreement shall not render
SQL insolvent. SQL will have as of the time of execution of this Agreement
sufficient financial resources to meet its obligations hereunder.
7.5 STATUS OF SQL. SQL is not the agent or partner of Exchanger.
7.6 SQL OWNERSHIP. SQL is a single member limited liability
company, the sole member and manager of which is Pacific.
8. REPRESENTATIONS AND WARRANTIES OF EXCHANGER. Exchanger hereby
represents and warrants to SQL and Qualified Intermediary as follows:
8.1 DUE ORGANIZATION; AUTHORITY; ENFORCEABILITY. Exchanger is an
entity of the form specified in the preamble to this Agreement and is duly
organized, validly existing and in good standing under the laws of the state of
its formation, with the power and authority to make, execute, deliver and
perform its respective obligations under this Agreement and all of the
transactions contemplated under this Agreement and has taken all necessary
corporate action to authorize the execution, delivery and performance of this
Agreement. This Agreement constitutes a valid and binding obligation of
Exchanger, enforceable against Exchanger in accordance with its terms, subject,
as to enforcement to bankruptcy, insolvency, reorganization, moratorium and
other laws of general applicability relating to or affecting creditors' rights
and to general equitable principles.
8.2 CONFLICT WITH EXISTING LAWS OR CONTRACT. The execution and
delivery of this Agreement, and all related documents and the performance of its
obligations hereunder and thereunder by Exchanger (i) does not conflict with or
result in a breach of or constitute a default under any of the terms, conditions
or provisions of certificate of incorporation or bylaws of Exchanger or of any
agreement or instrument to which Exchanger is a party or by which Exchanger is
bound or any order or decree applicable to Exchanger, or (ii) will not result in
the creation or imposition of any lien on any of the assets or property of
Exchanger which would materially and adversely affect the ability of Exchanger
to execute and deliver this Agreement and perform its obligations hereunder; and
Exchanger has obtained all consents, approvals, authorizations or orders of any
court or governmental agency or body, if any, required for the execution and
delivery by Exchanger of this Agreement.
8.3 LEGAL ACTION AGAINST EXCHANGER. There are no judgments,
orders or decrees of any kind against Exchanger unpaid or unsatisfied of record
nor any legal action, suit or other legal or administrative proceeding pending
or, to Exchanger's knowledge, threatened against Exchanger before any court or
administrative agency which has, or is likely to have, any material or adverse
effect on the business or assets or the condition, financial or otherwise, of
Exchanger which prevents the ability of Exchanger to perform hereunder.
8.4 BANKRUPTCY OR DEBT OF EXCHANGER; FINANCIAL CONDITION.
Exchanger has not filed any petition seeking or acquiescing in any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any law relating to bankruptcy or insolvency, nor has
any such petition been filed against Exchanger. No general assignment of
Exchanger's property has been made for the benefit of creditors, and no
receiver, master, liquidator or trustee has been appointed for Exchanger or any
of its property. Exchanger is not insolvent and the consummation of the
transactions contemplated by this Agreement shall not render Exchanger
insolvent. Exchanger will have as of the time of execution of this Agreement
sufficient financial resources to meet its obligations hereunder.
9. SURVIVAL. Subject to the provisions of Section 14.2 hereof, each
and every representation and warranty made by SQL or Exchanger shall survive the
execution and delivery of this Agreement for a period of two years after the
date this Agreement terminates pursuant to Section 3.5 hereof.
10. REMEDIES OF SQL.
10.1 TERMINATION SALE. If at any time within thirty (30) days
after receipt by Exchanger of a Termination Notice pursuant to Section 4.1
hereof, SQL sends to Exchanger a written notice (the "Termination Sale Notice")
stating that SQL proposes to dispose of the Replacement Property, then SQL shall
undertake to sell the Replacement Property in conformity with the termination
sale procedures set forth in this Section. Upon such sale, if the Termination
Sale Proceeds (defined hereinafter) are less than the Acquisition Costs (as
defined in Section 3.2 hereof), then Exchanger shall pay to SQL within ten (10)
days after the sale or deemed sale, in immediately available funds, an amount
equal to such deficiency as liquidated termination damages hereunder. If the
Termination Sale Proceeds exceed the Acquisition Costs, SQL shall retain any
such excess.
10.2 TERMINATION SALE PROCEDURE. The termination sale procedures
for the Replacement Property as follows:
10.2.1 SQL shall provide written notice to at least three
investment bankers or business brokers in the software industry that the
Replacement Property is available for sale and engage the services of at least
one such investment banker or broker to sell the Replacement Property in a
manner customary for such sales;
10.2.2 SQL shall make the Replacement Property reasonably
available for inspection by prospective purchasers, subject to the rights of the
licensee under the License;
10.2.3 SQL shall accept the highest all cash offer received
for the Replacement Property, provided that a bona fide offer is received (i)
within one hundred and eighty (180) days after the date of the engagement of an
investment banker or a broker as provided in subsection 10.2.1, and that any
offer accepted is consummated by the successful offeror within one hundred and
eighty (180) days after the date of acceptance; and
10.2.4 If SQL shall not have received a bona fide offer for
the Replacement Property as contemplated in subsection 10.2.3 or any such offer
received is not consummated within one hundred and eighty (180) days after
acceptance, SQL shall be entitled to cause the Replacement Property to be sold
at an auction sale for the highest all cash bid received.
10.3 TERMINATION SALE PROCEEDS. The term "Termination Sale
- -Proceeds" shall mean the net cash proceeds actually received by SQL at the
completion of the sale of the Replacement Property in accordance with the above
procedures, after deduction of the sum of (i) all fees, taxes, charges and other
costs incurred by SQL in connection with such sale but not deducted from the
proceeds received by it at closing and (ii) all amounts required to be paid to
remove any liens, encumbrances or restrictions (other than Unrelated Liens)
required to be removed under the terms of any sale of the Replacement Property.
In the event no offers or bids are received for the Replacement Property, or if
for any reason the Replacement Property cannot be sold despite the good faith
effort of SQL to do so, the Termination Sale Proceeds shall be deemed zero and
the charges and costs incurred by SQL in trying to sell the Replacement Property
shall be added to the deficiency referred to in this Section 10.
10.4 SQL'S RIGHT TO RETAIN PROPERTY. Notwithstanding anything
herein to the contrary, SQL shall not be obligated to sell the Replacement
Property after sending a Termination Notice and may elect to retain such
property, free and clear of all obligations under this Agreement.
11. REMEDIES OF EXCHANGER. If SQL shall fail to consummate its
obligations as provided in Section 5 hereof and such failure shall continue,
then Exchanger, upon delivery of written notice to SQL, may terminate its
obligation to complete the Exchange and sell the Replacement Property without
regard to this Agreement and (1) have recourse to a suit in equity for specific
performance of the obligation of SQL to transfer the Replacement Property to it,
in exchange for the Qualified Intermediary Credit Amount and the payment, if
any, required under Section 3.2 hereof, free and clear of all Unrelated Liens,
and/or (2) recover any damages against SQL as provided under law. The parties
agree that the Replacement Property is unique.
12. FEES PAYABLE TO SQL QUALIFIED INTERMEDIARY. SQL and Qualified
Intermediary shall be entitled to receive from Exchanger certain fees for their
respective services in connection with the Exchange as set forth in that certain
fee letter of even date transmitted by Exchanger to Qualified Intermediary.
13. RELEASES, ACKNOWLEDGMENTS AND INDEMNITIES.
13.1 QUALIFICATION OF EXCHANGE UNDER I.R.C. SECTION 1031.
EXCHANGER HEREBY ACKNOWLEDGES THAT QUALIFIED INTERMEDIARY, PACIFIC, AND SQL ARE
NOT ACTING AS EXCHANGER'S TAX ADVISOR OR LEGAL COUNSEL AND THAT NO INDEMNIFIED
PARTY WARRANTS OR REPRESENTS THAT THE TRANSACTION UNDER THIS AGREEMENT WILL
QUALIFY FOR NONRECOGNITION OF GAIN OR LOSS UNDER SECTION 1031 OF THE INTERNAL
REVENUE CODE. EXCHANGER ACKNOWLEDGES THAT EXCHANGER OBTAINED SEPARATE,
INDEPENDENT ADVICE FROM AN ATTORNEY OR TAX ADVISOR CONCERNING THE REQUIREMENTS
FOR A LIKE-KIND EXCHANGE UNDER SECTION 1031. EXCHANGER FURTHER ACKNOWLEDGES AND
AGREES THAT EXCHANGER HAS NOT RELIED UPON ANY CONVERSATIONS WITH, OR ADVICE OF,
ANY AGENT OR EMPLOYEE OF ANY INDEMNIFIED PARTY REGARDING THE TAX CONSEQUENCES OF
THE EXCHANGE.
13.2 LIMITATION ON DAMAGES. IF QUALIFIED INTERMEDIARY OR SQL
BREACHES ANY OF THEIR RESPECTIVE DUTIES TO EXCHANGER UNDER THIS AGREEMENT OR ANY
ACT OF QUALIFIED INTERMEDIARY OR SQL CONSTITUTES GROSS NEGLIGENCE OR WILFUL
MISCONDUCT, EXCHANGER AGREES FOR ITSELF AND ITS ASSIGNS THAT UNDER NO
CIRCUMSTANCES SHALL QUALIFIED INTERMEDIARY OR SQL BE LIABLE FOR PUNITIVE,
EXEMPLARY, CONTRACT OR CONSEQUENTIAL DAMAGES, OR FOR ANY LOST PROFITS INCURRED
BY EXCHANGER OR FOR ANY INCOME TAXES, INTEREST OR PENALTIES INCURRED BY
EXCHANGER. THE SOLE AND EXCLUSIVE DAMAGES FOR WHICH QUALIFIED INTERMEDIARY OR
SQL SHALL BE HELD LIABLE UNDER THIS AGREEMENT SHALL BE EQUAL TO DOUBLE THE SUM
OF (I) THE FEES AND EXPENSE REIMBURSEMENTS PAID BY EXCHANGER TO QUALIFIED
INTERMEDIARY UNDER THIS AGREEMENT PLUS (II) THE INTEREST EARNINGS RETAINED (IF
ANY) BY QUALIFIED INTERMEDIARY OR SQL ON ANY EXCHANGE ACCOUNT FUNDS ARISING
UNDER THIS AGREEMENT. EXCHANGER AGREES TO PROMPTLY NOTIFY QUALIFIED INTERMEDIARY
OR SQL OF ANY COMPLAINT OR CLAIM EXCHANGER INTENDS TO ASSERT AGAINST QUALIFIED
INTERMEDIARY OR SQL, AND EXCHANGER AGREES TO NOT ASSERT ANY CLAIM AGAINST
QUALIFIED INTERMEDIARY OR SQL AFTER THE PASSAGE OF ONE YEAR AFTER THE
TERMINATION OF THIS AGREEMENT. EXCHANGER AGREES THAT THE FOREGOING LIMITATION ON
THE TYPE AND AMOUNT OF DAMAGES RECOVERABLE FROM QUALIFIED INTERMEDIARY AND SQL
AND THE LIMITATION OF THE TIME WITHIN WHICH ANY CLAIM OR DISPUTE MAY BE ASSERTED
AGAINST QUALIFIED INTERMEDIARY AND SQL IS FAIR AND REASONABLE IN LIGHT OF THE
SCOPE OF THE RESPONSIBILITY OF QUALIFIED INTERMEDIARY UNDER THIS AGREEMENT AND
THE LIMITED AMOUNT OF THE FEES EARNED BY QUALIFIED INTERMEDIARY AND SQL.
EXCHANGER ACKNOWLEDGES THAT QUALIFIED INTERMEDIARY AND SQL CONSIDERS THIS
PROVISION MATERIAL AND WOULD NOT HAVE BEEN WILLING TO ENTER INTO THIS AGREEMENT
IN THE ABSENCE OF SUCH LIMITATIONS. EXCHANGER ACKNOWLEDGES THAT THE LIMITATIONS
CONTAINED HEREIN HAVE BEEN NEGOTIATED, AT ARMS LENGTH, BETWEEN THE QUALIFIED
INTERMEDIARY AND SQL AND THE EXCHANGER.
IF EXCHANGER ASSERTS ANY CLAIM AGAINST QUALIFIED INTERMEDIARY AND
SQL AND IF THE CLAIM CANNOT BE SETTLED THROUGH NEGOTIATIONS, EXCHANGER AND
QUALIFIED INTERMEDIARY AND SQL AGREE FIRST TO TRY IN GOOD FAITH TO SETTLE THE
CLAIM OR CONTROVERSY BY MEDIATION ADMINISTERED BY THE AMERICAN ARBITRATION
ASSOCIATION UNDER ITS COMMERCIAL MEDIATION RULES BEFORE RESORTING TO LITIGATION.
ANY MEDIATION SESSIONS SHALL BE HELD IN THE CITY IN WHICH THE REGIONAL OFFICE OF
QUALIFIED INTERMEDIARY IS LOCATED WHERE THIS AGREEMENT IS BEING ADMINISTERED.
13.3 ADDITIONAL INDEMNIFICATION OF INDEMNIFIED PARTIES.
13.3.1 Exchanger shall defend, indemnify and hold harmless
each Indemnified Party from and against any claim, including, without
limitation, costs and expenses of defending or settling disputed
claims at litigation or on appeal, and attorney's fees incurred by any
Indemnified Party, that arise from or in connection with any
representation, warranty, covenant, obligation or liability of
Exchanger relating to the Relinquished Property or the Replacement
Property, or their acquisition or conveyance in accordance with the
Replacement Property Acquisition Agreement or Relinquished Property
Transfer Agreement, or any claim arising from entering into a License
at the request of Exchanger, or any claim arising from Qualified
Intermediary's entering into a purchase agreement for property as
requested by Exchanger, any claim or allegation by any buyer, seller,
or any lender, licensee, lien holder or other third party connected
with the Relinquished Property or the Replacement Property.
13.4 Notwithstanding any conflicting term or provision of this
Agreement, Exchanger's indemnification and related covenants and obligations in
this Agreement will:
13.4.1 Survive and continue in effect after the closing, or
delivery of any conveyance document or any termination of this
Agreement (whether from completion of the exchange arrangements
provided for in this Agreement, or otherwise),
13.4.2 Not apply to any claim directly caused by the willful
misconduct, gross negligence, or breach of its duties or
responsibilities under this Agreement by Qualified Intermediary or
SQL.
13.5 EXCHANGER'S RESPONSIBILITIES. Without prejudice to any other
limitation on the duties, responsibilities or obligations under this Agreement
of Qualified Intermediary and SQL, Exchanger and not Qualified Intermediary or
SQL is responsible for:
13.5.1 The sufficiency, accuracy or validity of any document
or instrument arising from or relating to the transaction contemplated
by this Agreement;
13.5.2 The manner of signing of any document or instrument,
except to the extent signed by Qualified Intermediary or SQL;
13.5.3 The identity, authority or rights of any person or
entity signing any document or instrument, other than Qualified
Intermediary and SQL;
13.5.4 Any act or omission of Qualified Intermediary or SQL
unless the act of omission constitutes willful misconduct, gross
negligence, or breach of its duties or responsibilities under this
Agreement by SQL or Qualified Intermediary;
13.5.5 Risk of loss or damage to any Relinquished Property,
the Replacement Property and all other property received by Qualified
Intermediary or under this Agreement, by casualty, act of God, or
otherwise; or
13.5.6 The federal or state income tax aspects of the
transactions contemplated by this Agreement.
13.6 REIMBURSEMENTS. If Qualified Intermediary or SQL makes any
advances or incurs any expenses (other than those overhead expenses incurred in
acting as a Qualified Intermediary or SQL) under this Agreement or incurs any
out-of-pocket expense because it is a party to any litigation in connection with
this Agreement, or if Qualified Intermediary or SQL is compelled to pay money on
account of this Agreement, whether for breach of contract, injury to person or
property, fines or penalties under any law, or otherwise, except in the case of
the willful misconduct, gross negligence, or breach of the duties or
responsibilities under this Agreement by Qualified Intermediary or SQL,
Exchanger shall, on demand, pay to Qualified Intermediary or to SQL, with
interest at a rate not to exceed the then current prime rate, the amount of all
those expenses, advances or payments made by Qualified Intermediary or SQL, plus
all out-of-pocket expenses and reasonable outside attorney's fees incurred by
Qualified Intermediary or SQL.
13.7 NO UNLAWFUL ACTIONS. Qualified Intermediary and SQL shall
not be required to sign any agreement or participate in any transaction that, in
the reasonable opinion of Qualified Intermediary, would require Qualified
Intermediary or SQL to engage in any unlawful or fraudulent action or would be
unduly burdensome to Qualified Intermediary or SQL.
13.8 SURVIVAL OF WARRANTIES. All representations, warranties,
indemnities and limitations on the liability of Qualified Intermediary and/or
SQL set forth in or otherwise made pursuant to this Agreement will survive and
remain in effect after the closing and the delivery of conveyancing documents,
and will not be merged, and will survive the termination of this Agreement.
13.9 ATTORNEY'S FEES. If any legal action or proceeding is
commenced by any party in order to enforce this Agreement or any provision of
this Agreement or in connection with any alleged dispute, breach, default or
misrepresentation in connection with any provision in this Agreement, the
prevailing party will be entitled to recover reasonable attorneys' fees and
costs incurred in connection with that action or proceeding, including costs of
pursuing or defending any legal action, discovery or negotiation and preparation
of any settlement arrangements, in addition to any other relief as may be
granted.
13.10 NOTICES. Any request, notice or other communication to be
given under this Agreement must be in writing and delivered personally or by
messenger, private mail, courier service, facsimile or sent by registered,
certified mail, return receipt requested, or postage prepaid, as follows:
To Exchanger: ASA International, Ltd.
10 Speen Street
Framington, MA 01701
Attention: Alfred C. Angelone
Facsimile: (508) 626-0644
with a copy to: Stroock & Stroock & Lavan LLP
100 Federal Street, 33rd Floor
Boston, MA 02110
Attention: Paul D. Broude, Esquire
To Qualified Intermediary,
Pacific or SQL: 2390 East Camelback Road, Suite 210
Phoenix, AZ 85016
Attention: E. Jill Mozer
Facsimile: (602) 224-8815
All notices will be considered effective (i) upon receipt, if delivered
personally or by messenger or private mail courier, (ii) on the business day of
successful transmission by facsimile, (iii) otherwise on the third business day
after deposit in the US mail, postage prepaid or (iv) the next business day
after deposit with a nationally recognized overnight courier service. Any party
may change its address or facsimile number by a communication in accordance
herewith.
14. MISCELLANEOUS.
14.1 WAIVER. No failure or delay on the part of any party in
exercising any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power or remedy hereunder. The remedies provided hereunder are
cumulative.
14.2 AMENDMENTS. No amendment, modification, termination or
waiver of this Agreement or any provision hereof nor any consent to any
departure herefrom shall be effective unless the same is in writing and signed
by the party to be bound thereby and then any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
14.3 GOVERNING LAW. This agreement and all rights and obligations
of the parties hereunder shall be governed by and be construed and enforced in
accordance with the laws of the Forum State. Each party hereby consents to the
jurisdiction of the courts of the Forum State.
14.4 ASSIGNMENT. This Agreement shall bind and inure to the
benefit of the parties hereto and their respective successors and assigns.
Neither party shall have the right to assign any of its rights or interests
herein without the prior written consent of the other party, and under no
circumstances shall SQL, Qualified Intermediary or Pacific assign or attempt to
assign their respective interests hereunder to a person that would be a
"disqualified person" within the meaning of Treasury Regulation '1.1031(k)-l(k).
No person not a party hereto is intended to be benefitted hereby.
14.5 SEVERABILITY. Any provision hereof which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without affecting the
validity or enforceability of the remainder of this Agreement or the
enforceability of such provision in any other jurisdiction.
14.6 CAPTIONS. Captions and headings used herein are included for
convenience of reference only and shall not constitute a part hereof.
14.7 ENTIRE AGREEMENT. This Agreement constitutes the entire
Agreement between the parties and supersedes any contemporaneous or previous
written or oral agreements, representations or undertakings concerning the
matters and arrangements provided for in this Agreement. No supplement,
modification or amendment to this Agreement will be binding unless signed by all
parties to this Agreement. A waiver of any provisions of this Agreement will not
be considered a waiver of any other provision, whether or not similar, nor will
any waiver on one occasion constitute a continuing or permanent waiver.
14.8 INCONSISTENT ACTION BY SQL. SQL agrees that it will not take
any actions with respect to the Replacement Property or the Relinquished
Property which are not consistent with the provisions of this Agreement, the
Loan Documents and the License. SQL further agrees that at no time during the
term of this Agreement shall it make an assignment for the benefit of creditors,
file a petition in bankruptcy, petition or apply to any tribunal for any
receiver or trustee or commence any proceeding relating to itself under any
bankruptcy, reorganization, dissolution or liquidation law or statute of any
jurisdiction or otherwise indicate its consent to, approval of or acquiescence
of any such proceeding.
14.9 COUNTERPARTS. This Agreement may be executed in
counterparts, each of which shall be deemed an original and all of which shall
constitute but one and the same instrument.
14.10 CONSTRUCTION; RECITALS. In all cases, the language in all
parts of this Agreement shall be construed simply, according to its fair
meaning, and not strictly for or against any parts. The Recitals are hereby
incorporated into this Agreement.
IN WITNESS WHEREOF, Exchanger, Qualified Intermediary, Pacific
and SQL each have caused this Agreement to be duly executed pursuant to proper
authorization as of the day and year first above written.
ASA INTERNATIONAL, LTD., a Delaware corporation
By: /S/ ALFRED C. ANGELONE
-----------------------
Printed Name: ALFRED C. ANGELONE
------------------
Its: CHIEF EXECUTIVE OFFICER
-----------------------
SQL Acquisition LLC, a Delaware limited liability company
By: Pacific American Property Exchange Corporation, a California
corporation, Manager and Member
By: /S/ E. JILL MOZER
--------------------
E. Jill Mozer, Vice President
Fidelity National 1031 Exchange Services, Inc., a California corporation
By: /S/ E. JILL MOZER
-----------------
E. Jill Mozer, Vice President
Pacific American Property Exchange Corporation, a California corporation
By: /S/ E. JILL MOZER
------------------
E. Jill Mozer, Vice President
<PAGE>
LIST OF EXHIBITS
A - Replacement Property Description
<PAGE>
EXHIBIT "A"
REPLACEMENT PROPERTY DESCRIPTION
EXHIBIT 10.6
PROMISSORY NOTE
$4,300,000 NOVEMBER 4, 1999
FOR VALUE RECEIVED, the undersigned, SQL Acquisition LLC, a Delaware
limited liability company ("Borrower"), promises to pay ASA International Ltd.,
a Delaware corporation ("Payee"), or order, the principal amount of Four Million
Three Hundred Thousand Dollars ($4,300,000), plus interest thereon at a fixed
rate equal to 6.18% per annum. Interest shall in all cases be calculated on the
basis of actual days elapsed and a 365 day year.
All outstanding principal and any accrued but unpaid interest
hereunder shall be due and payable on the earlier of (a) November 3, 2000 or (b)
the date specified by written notice from Borrower to Payee (in either event,
the "Maturity Date"). The Borrower shall, upon execution of this Note, prepay
interest in the amount of Two Hundred Sixty Six Thousand Dollars ($266,000),
representing interest for the period from November 4, 1999 through November 3,
2000 (the "Prepaid Interest").
This Note is the Note referred to in Section 2.2.2 of the Asset
Acquisition and Exchange Agreement of even date herewith (the "Exchange
Agreement") by and among Borrower, Payee, Fidelity National 1031 Exchange
Services, Inc., and Pacific American Property Exchange Corporation ("Pacific").
This Note is secured by a pledge of certain intellectual property of
Borrower pursuant to a Security Agreement between Borrower and Payee of even
date herewith (the "Security Agreement").
Any payments, including any prepayments, received by Payee on account
of this Note prior to demand or acceleration shall be applied first, to any
costs, expenses or charges then owed Payee by Borrower in respect of this Note,
second, to accrued and unpaid interest, and third, to the unpaid principal
balance. No Prepaid Interest shall be refundable in the event this Note is
prepaid prior to November 3, 2000. Any payments received after demand or
acceleration shall be applied in such manner as Payee may, in its sole
discretion, determine.
Payee, at its option, may declare the entire unpaid balance of this
Note and all accrued and unpaid interest thereon to be immediately due and
payable without demand, notice or protest (which are hereby waived) upon the
failure of Borrower to pay principal or interest of this Note within ten (10)
days of the due date.
No delay or omission by Payee in exercising or enforcing any of
Payee's powers, rights, privileges or remedies hereunder shall operate as a
waiver thereof on that occasion or on any other occasion. No waiver of any
default hereunder shall operate as a waiver of any other default hereunder, nor
as a continuing waiver.
Borrower will pay on demand all reasonable costs and expenses of
collection, including reasonable attorneys' fees incurred or paid by Payee in
enforcing this Note on default.
<PAGE>
This Note shall be binding upon Borrower and each endorser and
guarantor hereof and upon their respective successors, and shall inure to the
benefit of Payee and its successors, endorsees and assigns. This Note may not be
amended except by an instrument in writing signed by Borrower and Payee.
This Note shall not be prepaid or assigned by Borrower without the
prior written consent of Payee.
This Note shall be governed by and construed in accordance with the
laws of the State of Delaware.
Notwithstanding anything to the contrary in Note, this is a
non-recourse obligation with respect to Pacific. Payee's sole source for
repayment or performance of the obligations contained in the Note is Borrower
and the collateral which is the subject of the Security Agreement. Neither
Pacific nor its directors, officers or assigns shall have personal liability for
the repayment of any amounts evidenced by the Note or for the performance or
observance of any covenant, indemnification, or condition contained herein. No
personal deficiency judgment shall be sought or entered against Pacific as a
result of any default under this Note.
Any dispute between the parties arising out of or related to this
Agreement shall be settled in accordance with the provisions of the Exchange
Agreement.
IN WITNESS WHEREOF, Borrower has caused this Note to be executed as of
the date first written above.
SQL ACQUISITION LLC
By: /S/ E. JILL MOZER
---------------------------
Title: PRESIDENT
-------------------------
Exhibit 10.7
SECURITY AGREEMENT
THIS AGREEMENT is dated as of November 4, 1999, and is entered into by
and between SQL Acquisition LLC, a Delaware limited liability company with a
principal place of business 2390 East Camelback Road, Suite 210, Phoenix,
Arizona 85016 (the "Debtor") and ASA International Ltd., a Delaware corporation
with a principal place of business at 10 Speen Street, Framingham, Massachusetts
01701 (the "Secured Party").
NOW THEREFORE, in consideration of the provisions herein contained,
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties hereto agree as follows:
1. CREATION OF SECURITY INTEREST
The Debtor hereby grants to the Secured Party a security interest in
the collateral described in Section 2 below to secure the payment of the
Debtor's Obligations to the Secured Party described in Section 3 below.
2. COLLATERAL
The property which is subject to the security interest created by this
Agreement consists of the following (hereinafter referred to as the
"Collateral"):
All right, title and interest of Debtor in and to (a) the software
previously designed, developed, maintained, implemented, supported, licensed or
sold by Design Data Systems Corporation ("DDS") commonly referred to as
"SQL*TIME" ("SQL*TIME"), including all released and unreleased source code and
object code versions thereof and all related documentation and development notes
(the "Software"), and (b) all other intellectual property of DDS specifically
related to the Software, including databases, market information, research and
development, patents, patent applications, copyrights, copyright registration
applications, trademarks and service marks and related applications, trade
names, trade secrets, proprietary information, technology rights and licenses,
proprietary rights and processes, know-how, research and development in
progress, and any and all other intellectual property including, without
limitation, all things authored, discovered, developed, made, perfected,
improved, designed, engineered, devised, acquired, produced, conceived or first
reduced to practice by DDS, or that are relevant to an understanding or to the
development of the Software or to the performance by the Software of its
intended functions or purposes, whether tangible or intangible, in any stage of
development, including without limitation enhancements, designs, technology,
improvements, inventions, works of authorship, formulas, processes, routines,
subroutines, techniques, concepts, object code, flow charts, diagrams, coding
sheets, source code, listings and annotations, programmers' notes, information,
work papers, work product and other materials of any types whatsoever, and all
rights of any kind in or to any of the foregoing (collectively, with the
Software, "Intellectual Property", and being the same Intellectual Property
acquired by SQLALLC from DDS on this date).
The Debtor shall permit the Secured Party and/or its agents and
representatives to inspect the Collateral upon request during the Debtor's
normal business hours and upon reasonable notice to the Debtor.
3. DEBTOR'S OBLIGATIONS
This Agreement secures the payment of all amounts and performance of
all obligations of the Debtor (the "Obligations") as provided in (i) the License
granted pursuant that certain License Agreement of even date herewith between
the Debtor and the Secured Party (the "License Agreement"); and (ii) that
certain Promissory Note in the principal amount of $4,300,000 from the Debtor to
the Secured Party, dated the date hereof (the "Note").
4. COVENANTS OF DEBTOR
(a) The places where all records relating to the Collateral are
presently kept, and the Debtor's only places of business, are listed on Schedule
A hereto. The Debtor shall notify Secured Party not less than five (5) days
before any change is intended to be made in the foregoing addresses.
(b) The Debtor shall at all reasonable times and from time to time
upon due notice allow the Secured Party, by or through any of its officers,
agents, attorneys or accountants, to examine or inspect the Collateral wherever
located and to examine, inspect and make extracts from the Debtor's books and
records. The Debtor shall do, make, execute and deliver all such additional and
further acts, things, deeds, assurances and instruments as Secured Party may
reasonably require, to vest more completely in and assure to Secured Party its
rights hereunder and in or to the Collateral.
(c) The Debtor shall not sell, encumber, grant a security interest in
or dispose of or permit the sale, encumbrance or disposal of any Collateral
without the Secured Party's prior written consent.
(d) The Debtor shall perform any and all steps reasonably requested by
the Secured Party to perfect the Secured Party's security interest in the
Collateral, such as executing and filing financing or continuation statements in
form and substance satisfactory to the Secured Party, executing collateral
assignments of patents and trademarks (including filings at the United States
Patent and Trademark Office), and making notations of such security interest on
certificates of title. The Debtor hereby nominates and appoints the Secured
Party as attorney-in-fact to do all acts and things which the Secured Party may
deem reasonably necessary or advisable to perfect and continue perfected the
security interests created by this Agreement.
(e) The Debtor hereby covenants that (a) the Debtor will promptly pay
any and all taxes, assessments and governmental charges upon the Collateral
prior to the date penalties are attached thereto, except to the extent that such
taxes, assessments and charges shall be contested in good faith by the Debtor;
(b) the Debtor will immediately notify the Secured Party of any event causing a
substantial loss or diminution in the value of all or any material part of the
Collateral and an estimate of the amount of such loss or diminution; and (c) the
Debtor will not use the Collateral in violation of any statute or ordinance and
will keep the Collateral free from any adverse lien, security interest or
encumbrance, except as permitted herein, in good condition and will not waste or
destroy the same.
5. DEFAULT
(a) Upon the occurrence of (i) the failure by the Debtor to observe
any provision or perform any other obligation set forth in this Agreement or the
License Agreement; or (ii) default by Debtor of its obligations in the Note; the
Debtor shall be in default hereunder, and the Secured Party shall be entitled to
any and all remedies available under the Uniform Commercial Code in force in the
Commonwealth of Massachusetts on the date of this Agreement, including, but not
limited to, the repossession, sale or other disposition of all or any portion of
the Collateral. Any sale or other disposition of the Collateral may be at public
or private sale upon such terms and in such manner as the Secured Party
reasonably deems advisable, having due regard to compliance with any statute or
regulation which might affect, limit or apply to the Secured Party's disposition
of the Collateral. The Secured Party may conduct any such sale or other
disposition of the Collateral upon the Debtor's premises. The Secured Party
shall give the Debtor at least the minimum notice required by law of the date,
time and place of any proposed public sale, and of the date after which any
private sale or other disposition of the Collateral may be made. The Secured
Party may purchase the Collateral, or any portion of it, at any such sale.
(b) Notwithstanding anything to the contrary in this Security
Agreement, this is a non-recourse obligation with respect to Pacific. Payee's
sole source for repayment or performance of the obligations contained in the
Note and this Security Agreement is Borrower and the Collateral. Neither Pacific
nor its directors, officers or assigns shall have personal liability for the
repayment of any amounts evidenced by the Note or secured by this Security
Agreement or for the performance or observance of any covenant, indemnification,
or condition contained herein. No personal deficiency judgment shall be sought
or entered against Pacific as a result of any default under this Security
Agreement.
6. GOVERNING LAW/BINDING EFFECT
This Agreement shall be construed according to the laws of the
Commonwealth of Massachusetts and shall be binding upon the successors and
assigns of the Debtor, and shall inure to the benefit of the successors and
assigns of the Secured Party.
7. WAIVERS
The Secured Party shall have the right to enforce any remedies
hereunder alternatively, successively or concurrently. A waiver of any default
of the Debtor shall not be a waiver of any subsequent, similar or other default.
No delay in the exercise of any of the Secured Party's rights or remedies
hereunder shall constitute a waiver of such right or remedy.
8. TERMINATION
This Agreement shall terminate when all of the Obligations have been
paid and the terms and covenants hereof have been performed in full. As soon as
practical following such termination, the Secured Party shall make the
appropriate governmental and regulatory filings (including a filing at the
United States Patent and Trademark Office) to terminate the Secured Party's
security interest in the Collateral.
Notwithstanding anything to the contrary contained herein, this
Agreement may be terminated by the Debtor with the prior consent of the Secured
Party, which consent shall not be unreasonably withheld, provided, however, that
the Debtor substitutes collateral security and/or guaranties for the Obligations
of equal or greater value than the Collateral, and expenses paid in connection
with such substitution (including reasonable legal or other necessary expenses)
shall be paid by the Debtor.
IN WITNESS WHEREOF, this Agreement has been executed by the parties as
of the date first above written.
WITNESS: DEBTOR:
SQL ACQUISITION LLC
/S/ BRIAN SALVAGNI By: /S/ E. JILL MOZER
- ---------------------------- ----------------------
Title: PRESIDENT
-------------------
WITNESS: SECURED PARTY:
ASA INTERNATIONAL LTD.
/S/ PAUL D. BROUDE By: /S/ ALFRED C. ANGELONE
- ---------------------------- -----------------------
Title: CHIEF EXECUTIVE OFFICER
------------------------
<PAGE>
SCHEDULE A
PLACES OF BUSINESS
1. 2390 East Camelback Road, Suite 210
Phoenix, Arizona 85016
EXHIBIT 10.8
INTELLECTUAL PROPERTY LICENSE AGREEMENT
THIS AGREEMENT, made this 4th day of November 1999, by and between SQL
ACQUISITION LLC, a Delaware limited liability company ("SQLALLC"), and ASA
INTERNATIONAL LTD., a Delaware corporation ("ASA").
W I T N E S S E T H:
WHEREAS, ASA, Design Data Systems Corporation ("DDS") and certain
other parties are parties to an Asset Purchase Agreement dated of even date
herewith (the "Acquisition Agreement") pursuant to which ASA has agreed to
acquire certain assets and assumed certain liabilities associated with the
Business (as defined in the Acquisition Agreement) previously conducted by DDS;
and
WHEREAS, ASA has assigned to SQLALLC its rights under the Acquisition
Agreement to acquire certain intellectual property owned by DDS and used in the
conduct of the Business; and
WHEREAS, SQLALLC Fidelity National 1031 Exchange Services, Inc.,
Pacific American Property Exchange Corporation and ASA are parties to an Asset
Acquisition and Exchange Agreement dated of even date herewith (the "Exchange
Agreement); and
WHEREAS, during the term of the Exchange Agreement, SQLALLC and ASA
desire that ASA conduct the Business; and
WHEREAS, to facilitate the conduct of the Business by ASA during the
term of the Exchange Agreement, SQLALLC and ASA desire to enter into this
License Agreement in which SQLALLC grants to ASA a license for the use of
SQLALLC's Intellectual Property (as hereinafter defined);
NOW, THEREFORE, in consideration of the premises and mutual promises
contained in this Agreement, IT IS AGREED:
1. INTELLECTUAL PROPERTY. "Intellectual Property" shall mean
all right, title and interest of SQLALLC in and to (a) the software previously
designed, developed, maintained, implemented, supported, licensed or sold by DDS
commonly referred to as "SQL*TIME" ("SQL*TIME"), including all released and
unreleased source code and object code versions thereof and all related
documentation and development notes (the "Software"), and (b) all other
intellectual property of DDS specifically related to the Software, including
databases, market information, research and development, patents, patent
applications, copyrights, copyright registration applications, trademarks and
service marks and related applications, trade names, trade secrets, proprietary
information, technology rights and licenses, proprietary rights and processes,
know-how, research and development in progress, and any and all other
intellectual property including, without limitation, all things authored,
discovered, developed, made, perfected, improved, designed, engineered, devised,
acquired, produced, conceived or first reduced to practice by DDS, or that are
relevant to an understanding or to the development of the Software or to the
performance by the Software of its intended functions or purposes, whether
tangible or intangible, in any stage of development, including without
limitation enhancements, designs, technology, improvements, inventions, works of
authorship, formulas, processes, routines, subroutines, techniques, concepts,
object code, flow charts, diagrams, coding sheets, source code, listings and
annotations, programmers' notes, information, work papers, work product and
other materials of any types whatsoever, and all rights of any kind in or to any
of the foregoing (collectively, with the Software, "Intellectual Property", and
being the same Intellectual Property acquired by SQLALLC from DDS on this date).
2. GRANT OF LICENSE. SQLALLC hereby grants to ASA and ASA
hereby accepts upon the terms and conditions hereinafter set forth, an
exclusive, royalty-free, worldwide right and license (the "License"), under all
of SQLALLC's rights in and to the Intellectual Property, (a) to use, reproduce,
distribute, publicly perform, display and sell the Intellectual Property, and
(b) to make, have made, use, sell, offer for sale and import any product and
practice any process, subject, however, to the terms and provisions of this
Agreement. The License hereunder includes the right to grant sublicenses. During
the term of the License, SQLALLC shall not use or grant to any other party the
right to use the Intellectual Property for any purpose and SQLALLC shall keep
confidential all of the information contained in the Intellectual Property. Upon
the execution of this Agreement, SQLALLC shall provide ASA with a copy of all
source code for the Software.
3. TERM. The term of this Agreement shall commence on the
date of the execution of this Agreement and shall continue until November 3,
2000, unless this Agreement is terminated pursuant to Section 7.
4. LICENSE FEE. Upon execution of this Agreement, ASA shall
pay SQLALLC a non-refundable license fee for use of the Intellectual Property
during the term of this Agreement in the amount of Two Hundred Eighty Five
Thousand Dollars ($285,000).
5. OWNERSHIP. During the term of this Agreement, all
Intellectual Property shall remain the property of SQLALLC.
6. PROTECTION OF THE INTELLECTUAL PROPERTY. Subject to
Section 2, the parties agree that, during the term of this Agreement, each shall
take all such steps as may be necessary or reasonable to safeguard the
confidentiality of the Intellectual Property and shall not disclose any of the
foregoing to any third party, except for purposes consistent with this
Agreement.
7. TERMINATION. This Agreement, and the License granted
hereby, will terminate upon the earlier of (i) November 4, 2000 or (ii) the date
on which that certain promissory note of even date herewith in the original
principal amount of $4,000,000 from SQLALLC to ASA is paid in full.
8. WARRANTY. SQLALLC represents and warrants to ASA that at
all times during the term of this Agreement (a) SQLALLC has the full right,
power and authority to enter into this Agreement and fully perform its
obligations hereunder, and (b) SQLALLC owns exclusively all right, title and
interest in and to the Intellectual Property.
9. ASSIGNMENT. Neither this Agreement nor any interest
herein may be assigned, in whole or in part, by either party without the prior
written consent of the other party.
10. WAIVER. The failure of either party to insist, in any
one or more instances, upon performance of the terms or conditions of this
Agreement shall not be construed as a waiver or a relinquishment of any right
granted hereunder or of the future performance of any such term, covenant or
condition.
11. NOTICES. Any notice to be given hereunder shall be
deemed sufficient if in writing and delivered in accordance with the notice
provisions of the Exchange Agreement.
12. SEVERABILITY. In the event that any provisions shall be
held to be invalid or unenforceable for any reason whatsoever, it is agreed that
such invalidity or unenforceability shall not affect any other provision of this
Agreement and the remaining covenants, restrictions and provisions hereof shall
remain in full force and effect and that any court of competent jurisdiction may
so modify the objectionable provisions as to make it valid, reasonable and
enforceable.
13. ENTIRE AGREEMENT. This Agreement constitutes the entire
agreement between the parties hereto and supersede all prior agreements,
understandings and arrangements, oral or written, between the parties with
respect to the subject matter hereof.
14. GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware.
15. HEADINGS. The headings of this Agreement are intended
solely for convenience of reference and shall be given no effect in the
construction or interpretation of this Agreement.
16. RELATIONSHIP. Nothing in this Agreement is intended to
or shall (i) establish any agency, partnership or joint venture relationship
between the parties hereto; or (ii) except as otherwise specifically provided,
confer on any person other than the parties, or their authorized assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.
17. DISPUTE RESOLUTION. Any dispute between the parties
arising out of or related to this Agreement shall be settled in accordance with
the provisions of the Exchange Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their duly authorized officers or representatives.
SQL ACQUISITION LLC
By: /S/ E. JILL MOZER, PRESIDENT
----------------------------------
ASA INTERNATIONAL LTD.
By: /S/ ALFRED C. ANGELONE, CEO
----------------------------------
EXHIBIT 10.9
ASSIGNMENT AGREEMENT
This Assignment ("Assignment") is made and entered into on the 4th day
of November, 1999, by and among ASA International, Ltd., a Delaware corporation
("Assignor"), SQL Acquisition LLC, a Delaware limited liability company
("Assignee"), and Design Data Systems Corporation, a Florida corporation
("Seller").
RECITALS
A. Assignor and Seller are parties to a certain Asset Purchase
Agreement dated November 4, 1999, (the "Purchase Agreement"). Capitalized terms
used without definition herein shall have the meanings ascribed to them in the
Purchase Agreement.
B. Assignor desires to assign to Assignee the rights of Assignor under
the Purchase Agreement, to acquire certain software and related intellectual
property described in Exhibit A annexed hereto (the "Replacement Property").
AGREEMENT
NOW, THEREFORE, with reference to the foregoing recitals, and in
consideration of mutual covenants and conditions hereinafter set forth and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Purchase Agreement is hereby modified and supplemented
as follows:
1. ASSIGNMENT AND ASSUMPTION; SELLER'S CONSENT. Assignor assigns to
Assignee all of Assignor's right, title and interest under the Purchase
Agreement, to acquire the Replacement Property. The obligation of Assignor to
deposit funds for the purchase of the of the Replacement Property, as required
under the Purchase Agreement, is assigned to Assignee. Assignee accepts the
assignment. Subject to the provisions of this Assignment, Assignee assumes
Assignor's interests and rights to acquire the Replacement Property from Seller
under the Purchase Agreement. Seller consents to the assignment upon the terms
and conditions set forth in this Assignment. Assignor, Assignee and Seller agree
that the purchase price for the Replacement Property shall be $4,300,000, which
represents a portion of the $4,750,000 to be paid by Assignor pursuant to
Section 1.2(a) of the Purchase Agreement.
2. ASSIGNEE AS BUYER; TRANSFER OF REPLACEMENT PROPERTY. Seller,
Assignor and Assignee acknowledge and agree that Assignee will acquire the
Replacement Property from Seller. The Replacement Property will transfer at the
Closing directly from Seller to Assignee. Any and all bills of sale and related
documents of transfer relating to the Replacement Property shall be executed by
Seller for the direct benefit of Assignee in the form annexed hereto as Exhibits
B, C and D. Thereafter, all parties acknowledge that Assignee is, pursuant to
this instrument, the buyer of the Replacement Property.
3. ASSIGNOR'S RELEASE AND INDEMNITY. Assignor releases, discharges,
holds harmless and indemnifies Assignee from and against any claim, demand,
liability, loss, damage, cost, or expense (collectively, "Claim") in connection
with any matter relating to the Replacement Property or any term, condition, or
instrument referred to in this Assignment.
4. SELLER'S RELEASE. Assignee has not made or assumed and will not
make or assume, nor will Assignee be liable for, any covenant, duty or
obligation of Assignor under the Purchase Agreement that may remain in effect
after the close of the transaction. Seller releases, discharges and holds
harmless Assignee from and against any Claim in connection with any matter
relating to the Replacement Property or any term, condition, or instrument
referred to in this Assignment or otherwise relating to the Exchange. The
Seller's release does not apply to any Claim arising from Assignee's breach of
this Assignment, gross negligence, or willful misconduct. Seller's sole recourse
will be against Assignor with respect to any Claim concerning the Replacement
Property or any performance, agreement, or obligation arising under the Purchase
Agreement, and Seller will retain all of its rights under the Purchase Agreement
unaffected by this Assignment.
5. SELLER'S OBLIGATIONS. Seller is and will remain responsible and
liable to Assignor for the performance of every warranty and obligation of
Seller with respect to the Replacement Property. Assignor will look solely to
Seller and Meli relating to those warranties and obligations. The assignment set
forth in Section 1 above does not affect, limit, modify or impair in any way the
representations, warranties, covenants or indemnifications made by Seller or the
obligations of Seller or Meli under the Purchase Agreement, which will continue
to the benefit of Assignor. Nothing set forth in this Assignment in any way
releases Seller or Meli from any of Seller's or Meli's obligations, liabilities,
indemnifications, covenants, representations or warranties (whether express,
implied in fact or implied at law) made under the Purchase Agreement for the
benefit of Assignor, or under any documents signed in connection with the
Purchase Agreement for the benefit of Assignor. Notwithstanding the foregoing,
Seller shall accept the consideration for the purchase of the Replacement
Property from Assignee and convey the Replacement Property in accordance with
the terms of Section 2.
6. ASSIGNOR'S OBLIGATIONS. Assignor is and will remain responsible and
liable to Seller for the performance of every warranty and obligation of
Assignor with respect to the Replacement Property. Seller will look solely to
Assignor relating to those warranties and obligations. The assignment set forth
in Section 1 above does not affect, limit, modify or impair in any way the
representations, warranties, covenants or indemnifications made by Assignor or
the obligations of Assignor under the Purchase Agreement, which will continue to
the benefit of Seller. Nothing set forth in this Assignment in any way releases
Assignor from any of Assignor's obligations, liabilities, indemnifications,
covenants, representations or warranties (whether express, implied in fact or
implied at law) made under the Purchase Agreement for the benefit of Seller, or
under any documents signed in connection with the Purchase Agreement for the
benefit of Seller.
7. SURVIVAL. The acknowledgments and agreements of Seller, Assignor,
and Assignee set forth in this Assignment will survive the closing.
8. COUNTERPARTS. This Assignment may be signed in counterparts or by
facsimile, each of which will be considered an original, but all of which, when
taken together, will constitute one instrument.
9. LITIGATION. If litigation is commenced between the parties
regarding this Assignment, the prevailing party will be entitled, in addition to
such other relief as may be granted, to reasonable attorney's fees and costs at
trial and on appeal.
EXCEPT AS EXPRESSLY MODIFIED OR AMENDED IN THIS ASSIGNMENT, ALL TERMS AND
CONDITIONS IN THE PURCHASE AGREEMENT REMAIN UNCHANGED.
Assignor:
ASA INTERNATIONAL, LTD., a Delaware corporation
By: /S/ ALFRED C. ANGELONE
------------------------------
Printed Name: ALFRED C. ANGELONE
--------------------
Its: CHIEF EXECUTIVE OFFICER
-----------------------------
Assignee:
SQL Acquisition LLC, a Delaware limited liability company
By: Pacific American Property Exchange Corporation, a California
corporation, Manager and Member
By: /S/ E. JILL MOZER
--------------------------
E. Jill Mozer, Vice President
Seller:
Design Data Systems Corporation, a Florida corporation
By: /S/ MICHAEL R. MELI, PRESIDENT
----------------------------------
Printed Name: MICHAEL R. MELI
------------------------
Its: PRESIDENT
-----------------------------
<PAGE>
EXHIBIT A
REPLACEMENT PROPERTY
"Replacement Property" shall mean (a) the software previously
designed, developed, maintained, implemented, supported, licensed or sold by
Design Data Systems Corporation ("DDS") commonly referred to as "SQL*TIME"
("SQL*TIME"), including all released and unreleased source code and object code
versions thereof and all related documentation and development notes (the
"Software"), and (b) all other intellectual property of DDS specifically related
to the Software, including databases, market information, research and
development, patents, patent applications, copyrights, copyright registration
applications, trademarks and service marks and related applications, trade
names, trade secrets, proprietary information, technology rights and licenses,
proprietary rights and processes, know-how, research and development in
progress, and any and all other intellectual property including, without
limitation, all things authored, discovered, developed, made, perfected,
improved, designed, engineered, devised, acquired, produced, conceived or first
reduced to practice by DDS, or that are relevant to an understanding or to the
development of the Software or to the performance by the Software of its
intended functions or purposes, whether tangible or intangible, in any stage of
development, including without limitation enhancements, designs, technology,
improvements, inventions, works of authorship, formulas, processes, routines,
subroutines, techniques, concepts, object code, flow charts, diagrams, coding
sheets, source code, listings and annotations, programmers' notes, information,
work papers, work product and other materials of any types whatsoever, and all
rights of any kind in or to any of the foregoing.
<PAGE>
EXHIBIT B
BILL OF SALE AND GENERAL ASSIGNMENT OF ASSETS
KNOW ALL MEN AND WOMEN BY THESE PRESENTS THAT:
Design Data Systems Corporation, a Florida corporation ("Seller"), pursuant to
that certain Asset Purchase Agreement dated as of November 4, 1999 (the
"Agreement"), by and between the Seller and ASA International Ltd., a Delaware
corporation ("Buyer"), and that certain Assignment dated as of November 4, 1999
(the "Assignment") by and among Seller, Buyer and SQL Acquisition LLC
("Assignee") for and in consideration of good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, does hereby grant,
bargain, sell, convey, transfer, assign, set over and deliver to Buyer, its
successors and assigns, all of Seller's right, title and interest in and to all
of the Replacement Property (as defined in the Assignment). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Agreement.
TO HAVE AND TO HOLD all of the properties, assets and rights granted and
transferred hereby, with the appurtenances thereof, unto Assignee, its
successors and assigns forever, for their own use and benefit. For the
consideration aforesaid, Seller hereby constitutes and appoints Assignee, its
successors and assigns, the true and lawful attorney or attorneys of Seller,
with full power of substitution, for Seller and in its name and stead, or
otherwise, but on behalf and for the benefit of Assignee, its successors and
assigns, to demand and receive from time to time, any and all properties hereby
given, granted, bargained, sold, assigned, transferred, conveyed, set over,
confirmed and delivered and give receipts and releases for and in respect of the
same and any part thereof, and from time to time to institute and prosecute in
the name of Seller or otherwise, but for the benefit of Assignee, its successors
and assigns, any and all proceedings at law, in equity or otherwise, which
Assignee, its successors or assigns, may deem proper in order to collect, assert
or enforce any claim, right or title of any kind in and to the properties hereby
given, granted, bargained, sold, assigned, transferred, set over, conformed,
delivered or conveyed, and to defend or compromise any or all actions, suits or
proceedings in respect of any said properties and do all such acts and things in
relation thereto as Assignee, its successors and assigns, shall deem advisable,
Seller hereby declaring that the appointment made and the powers hereby granted
are coupled with an interest and are and shall be irrevocable by Seller in any
manner and for any reason.
Seller for itself and its successors and assigns, does hereby covenant with
Assignee, its successors and assigns, that Seller and its successors and assigns
will do, execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered all such further acts, deeds, bills of sale,
transfers, assignments and conveyances, powers of attorney, conveying and
confirming unto Assignee, successors and assigns, all and singular, the
properties hereby granted, sold, assigned, transferred, conveyed and delivered
as Assignee, its successors or assigns, shall reasonably require, provided,
however, that the Assignee, its successors and assigns shall prepare all
necessary documentation in conformity with the terms and conditions of the
Agreement at Assignee's expense.
<PAGE>
This Bill of Sale and General Assignment of Assets may be executed in one or
more counterparts, each of which shall be an original, but which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, SQL Acquisition LLC and Design Data Systems Corporation have
each caused this instrument to be signed in its name by its duly authorized
officer to be effective as of the 30th day of September, 1999.
SQL ACQUISITION LLC
By: ________________________________
Name: ________________________________
Title: ________________________________
DESIGN DATA SYSTEMS CORPORATION
By: ________________________________
Name: ________________________________
Title: ________________________________
<PAGE>
CERTIFICATION
STATE OF )
) ss.
COUNTY OF _________________ )
On this ____ day of __________ 1999, before me, the undersigned, a Notary Public
for the State of ________________, personally appeared ________________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the foregoing instrument as _________________
___________ of the corporation named therein, and acknowledged to me that he
executed the same as his voluntary act on behalf of such corporation with
authority to do so for the purposes therein set forth.
-------------------------------
Notary Public
My Commission expires: ___________________
<PAGE>
EXHIBIT C
ASSIGNMENT OF TRADEMARKS
WHEREAS, Design Data Systems Corporation, a Florida corporation, having its
principal place of business at 13830 58th Street N., Suite 410, Clearwater,
Florida ("Assignor"), is the owner of the trademarks/service marks as listed on
SCHEDULE A attached hereto, which marks constitute part of the Replacement
Property, as defined in the Assignment dated November 4, 1999 by and among
Seller, Buyer and SQL Acquisition LLC); and
WHEREAS, SQL Acquisition LLC, a Delaware limited liability company, having its
principal place of business at 2390 East Camelback Road, Suite 210, Phoenix,
Arizona 85016 ("Assignee"), is desirous of acquiring said trademarks/service
marks together with the good will of the business with which said
trademark/service marks are used and which are symbolized by said marks and any
and all registrations and applications for registration of said marks;
NOW, THEREFORE, be it known that for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Assignor, Assignor
has, subject to the penultimate paragraph hereof, assigned and by these
presents, does hereby sell, transfer, convey and assign unto Assignee the entire
right, title, and interest in and to said marks, all registrations and all
applications for registration of said marks, including without limitation the
right to recover for past infringement of said marks, and the good will of the
business in connection with which said marks are used and which are symbolized
by said marks.
Assignor hereby covenants and represents that the execution, delivery and
performance of this Trademark Assignment by Assignor has been duly and validly
authorized by all necessary corporate action and this Trademark Assignment has
been duly and validly executed and delivered by Assignor and constitutes a valid
and legally binding agreement of Assignor, enforceable against Assignor in
accordance with its terms. The execution, delivery and performance of this
Trademark Assignment does not conflict with, result in a breach of, or
constitute a default under any applicable law, judgment, order, injunction,
decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby further covenants and agrees that Assignor will communicate to
Assignee, its successors, legal representatives and assignees, any facts known
to Assignor respecting said marks, and at Assignee's sole expense testify in any
legal proceeding, sign all lawful papers, execute all applications for
registration, make all rightful oaths, and generally do everything possible to
aid the said Assignee, its successors, legal representatives and assigns, to
obtain and enforce proper protection for said marks in all countries.
Assignor and Assignee agree that, notwithstanding any other provision of this
Trademark Assignment, this Trademark Assignment shall be effective on and after
September 30, 1999.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Trademarks is executed at Boston,
Massachusetts, this 4th day of November, 1999.
DESIGN DATA SYSTEMS CORPORATION
By: ________________________
Name: ________________________
Title: ________________________
ATTEST:
By: ________________________________
Name: ________________________________
Title: ________________________________
<PAGE>
CERTIFICATION
COMMONWEALTH OF )
MASSACHUSETTS
) ss.
COUNTY OF _________________ )
On this ____ day of __________ 1999, before me, the undersigned, a Notary Public
for the Commonwealth of Massachusetts, personally appeared _____________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the foregoing instrument as _________________
___________ of the corporation named therein, and acknowledged to me that he
executed the same as his voluntary act on behalf of such corporation with
authority to do so for the purposes therein set forth.
---------------------------
Notary Public
My Commission expires: ___________________
<PAGE>
EXHIBIT D
ASSIGNMENT OF COPYRIGHTS
WHEREAS, Design Data Systems Corporation, a Florida corporation, having its
principal place of business at 13830 58th Street N., Suite 410, Clearwater,
Florida ("Assignor"), owns all right, title and interest in original works
(whether regarded as literary works or computer programs under applicable law)
relating to certain products designed and manufactured by Assignor, including,
but not limited to, those listed on SCHEDULE A attached hereto (collectively,
the "Work"); and
WHEREAS, SQL Acquisition LLC., a Delaware limited liability company having its
principal place of business at 2390 East Camelback Road, Suite 210, Phoenix,
Arizona 85016 ("Assignee"), desires to obtain the entire right, title, and
interest in, to and under the Work including the copyright(s) thereof , but only
Work constituting part of the Replacement Property, as defined in the Assignment
dated November 4, 1999 by and among Seller, Buyer and SQL Acquisition LLC.
NOW, THEREFORE, for good and valuable consideration paid by the Assignee to the
Assignor simultaneously herewith, pursuant to that certain Assignment Agreement
dated as of November 4, 1999 (the "Agreement"), receipt of which is hereby
acknowledged by the Assignor, and for other good and valuable consideration, the
said Assignor, subject to the penultimate paragraph hereof;
Assignor hereby assigns, transfers and sets over unto the Assignee the entire
right, title, and interest in and to the Work, the entire right, title and
interest in and to any and all statutory or common law copyrights or copyright
registrations covering the Work, including: any and all renewals and extensions
of those copyrights that may be secured under the laws now or hereafter in force
in the United States and throughout the world; any and all causes of action
heretofore accrued in the Assignor's favor for infringement of the aforesaid
copyright(s); and any and all rights, including but not limited to, the rights
to reproduce the Work in copies or other embodiment; to prepare derivative works
based upon the Work; to distribute copies or other embodiments of the Work to
the public by sale or other transfer of ownership, or by rental, lease or
lending; to perform the Work publicly; and to display the Work publicly;
To have and to hold the same unto the Assignee, its successors, legal
representatives and assigns, for and during the existence of all copyright(s)
and any and all renewals and extensions thereof absolutely and forever; and
Assignor hereby authorizes and requests the Register of Copyrights of the United
States, and any official of any country or countries foreign to the United
States, and any official of any country or countries foreign to the United
States, whose duty it is to issue copyright registrations or similar indicia of
copyright, to issue such copyright, registrations for said Work to Assignee, its
successors, legal representatives and assigns.
Assignor hereby covenants and represents that the execution, delivery and
performance of this Copyright Assignment by Assignor has been duly and validly
authorized by all necessary corporate action and this Copyright Assignment has
been duly and validly executed and delivered by Assignor and constitutes a valid
and legally binding agreement of Assignor, enforceable against Assignor in
accordance with its terms. The execution, delivery and performance of this
Copyright Assignment does not conflict with, result in a breach of, or
constitute a default under, any applicable law, judgment, order, injunction,
decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby covenants and agrees that Assignor shall forthwith upon
Assignee's written request and at Assignee's sole expense take any and all steps
and execute, acknowledge, and deliver to the Assignee any and all further
instruments and assurances necessary or expedient in order to vest the aforesaid
Work and copyright(s) and causes of action more effectively in the Assignee.
Assignor hereby further covenants and agrees that Assignor will communicate to
the Assignee, its successors, legal representatives and assigns, any facts known
to Assignor respecting said Work and said copyright(s), and at Assignee's sole
expense testify in any legal proceedings, sign all lawful papers, execute all
copyright applications and copyright renewal applications, make all rightful
oaths, and generally do everything possible to aid the said Assignee, its
successors, legal representatives and assigns, to obtain and enforce proper
copyright protection for said Work in all countries.
Assignor hereby constitutes and appoints the Assignee its true and lawful
attorney-in-fact with full power of substitution, in Assignor's name and stead,
but for the Assignee's benefit, to take any and all steps (including proceeding
at law, in equity or otherwise), and to execute, acknowledge and deliver any and
all instruments and assurances necessary or expedient in order to vest the
aforesaid Work and copyright(s) and causes of action more effectively in the
Assignee, or to protect the same, or to enforce any claim or right of any kind
with respect thereto. The Assignor hereby declares that the foregoing power is
coupled with an interest and is irrevocable.
Assignor and assignee agree that, notwithstanding any other provision of this
Copyright Assignment, this Copyright Assignment shall be effective on and after
September 30, 1999.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Copyrights is executed at Boston,
Massachusetts, this 4th day of November, 1999.
DESIGN DATA SYSTEMS CORPORATION
By: ________________________________
Name: ________________________________
Title: _________________________________
ATTEST:
By:________________________
Name: _____________________
Title:
<PAGE>
CERTIFICATION
COMMONWEALTH OF )
MASSACHUSETTS
) ss.
COUNTY OF _________________ )
On this ____ day of __________ 1999, before me, the undersigned, a Notary Public
for the Commonwealth of Massachusetts, personally appeared _______________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the foregoing instrument as _________________
___________ of the corporation named therein, and acknowledged to me that he
executed the same as his voluntary act on behalf of such corporation with
authority to do so for the purposes therein set forth.
_____________________________
Notary Public
My Commission expires: ___________________
EXHIBIT 10.10
BILL OF SALE AND GENERAL ASSIGNMENT OF ASSETS
KNOW ALL MEN AND WOMEN BY THESE PRESENTS THAT:
Design Data Systems Corporation, a Florida corporation ("Seller"), pursuant to
that certain Asset Purchase Agreement dated as of November 4, 1999 (the
"Agreement"), by and between the Seller and ASA International Ltd., a Delaware
corporation ("Buyer"), and that certain Assignment dated as of November 4, 1999
(the "Assignment") by and among Seller, Buyer and SQL Acquisition LLC
("Assignee") for and in consideration of good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, does hereby grant,
bargain, sell, convey, transfer, assign, set over and deliver to Buyer, its
successors and assigns, all of Seller's right, title and interest in and to all
of the Replacement Property (as defined in the Assignment). Capitalized terms
used but not otherwise defined herein shall have the meanings set forth in the
Agreement.
TO HAVE AND TO HOLD all of the properties, assets and rights granted and
transferred hereby, with the appurtenances thereof, unto Assignee, its
successors and assigns forever, for their own use and benefit. For the
consideration aforesaid, Seller hereby constitutes and appoints Assignee, its
successors and assigns, the true and lawful attorney or attorneys of Seller,
with full power of substitution, for Seller and in its name and stead, or
otherwise, but on behalf and for the benefit of Assignee, its successors and
assigns, to demand and receive from time to time, any and all properties hereby
given, granted, bargained, sold, assigned, transferred, conveyed, set over,
confirmed and delivered and give receipts and releases for and in respect of the
same and any part thereof, and from time to time to institute and prosecute in
the name of Seller or otherwise, but for the benefit of Assignee, its successors
and assigns, any and all proceedings at law, in equity or otherwise, which
Assignee, its successors or assigns, may deem proper in order to collect, assert
or enforce any claim, right or title of any kind in and to the properties hereby
given, granted, bargained, sold, assigned, transferred, set over, conformed,
delivered or conveyed, and to defend or compromise any or all actions, suits or
proceedings in respect of any said properties and do all such acts and things in
relation thereto as Assignee, its successors and assigns, shall deem advisable,
Seller hereby declaring that the appointment made and the powers hereby granted
are coupled with an interest and are and shall be irrevocable by Seller in any
manner and for any reason.
Seller for itself and its successors and assigns, does hereby covenant with
Assignee, its successors and assigns, that Seller and its successors and assigns
will do, execute, acknowledge and deliver, or will cause to be done, executed,
acknowledged and delivered all such further acts, deeds, bills of sale,
transfers, assignments and conveyances, powers of attorney, conveying and
confirming unto Assignee, successors and assigns, all and singular, the
properties hereby granted, sold, assigned, transferred, conveyed and delivered
as Assignee, its successors or assigns, shall reasonably require, provided,
however, that the Assignee, its successors and assigns shall prepare all
necessary documentation in conformity with the terms and conditions of the
Agreement at Assignee's expense.
<PAGE>
This Bill of Sale and General Assignment of Assets may be executed in one or
more counterparts, each of which shall be an original, but which together shall
constitute one and the same instrument.
IN WITNESS WHEREOF, SQL Acquisition LLC and Design Data Systems Corporation have
each caused this instrument to be signed in its name by its duly authorized
officer to be effective as of the 30th day of September, 1999.
SQL ACQUISITION LLC
By: /S/ E. JILL MOZER
-----------------------
Name: E. JILL MOZER
---------------------
Title: PRESIDENT
--------------------
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI, PRESIDENT
-------------------------------
Name: MICHAEL R. MELI
-----------------------------
Title: PRESIDENT
----------------------------
<PAGE>
CERTIFICATION
COMMONWEALTH OF )
MASSACHUSETTS
) ss.
COUNTY OF Suffolk )
On this 4th day of November, 1999, before me, the undersigned, a Notary Public
for the Commonwealth of Massachusetts, personally appeared Michael R. Meli,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the foregoing instrument as President of the
corporation named therein, and acknowledged to me that he executed the same as
his voluntary act on behalf of such corporation with authority to do so for the
purposes therein set forth.
/S/ VIRGINIA A. THOMPSON
-----------------------------
Notary Public
My Commission expires: NOVEMBER 23, 2001
Exhibit 10.11
ASSIGNMENT OF TRADEMARKS
WHEREAS, Design Data Systems Corporation, a Florida corporation, having its
principal place of business at 13830 58th Street N., Suite 410, Clearwater,
Florida ("Assignor"), is the owner of the trademarks/service marks as listed on
SCHEDULE A attached hereto, which marks constitute part of the Replacement
Property, as defined in the Assignment dated November 4, 1999 by and among
Seller, Buyer and SQL Acquisition LLC); and
WHEREAS, SQL Acquisition LLC, a Delaware limited liability company, having its
principal place of business at 2390 East Camelback Road, Suite 210, Phoenix,
Arizona 85016 ("Assignee"), is desirous of acquiring said trademarks/service
marks together with the good will of the business with which said
trademark/service marks are used and which are symbolized by said marks and any
and all registrations and applications for registration of said marks;
NOW, THEREFORE, be it known that for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged by Assignor, Assignor
has, subject to the penultimate paragraph hereof, assigned and by these
presents, does hereby sell, transfer, convey and assign unto Assignee the entire
right, title, and interest in and to said marks, all registrations and all
applications for registration of said marks, including without limitation the
right to recover for past infringement of said marks, and the good will of the
business in connection with which said marks are used and which are symbolized
by said marks.
Assignor hereby covenants and represents that the execution, delivery and
performance of this Trademark Assignment by Assignor has been duly and validly
authorized by all necessary corporate action and this Trademark Assignment has
been duly and validly executed and delivered by Assignor and constitutes a valid
and legally binding agreement of Assignor, enforceable against Assignor in
accordance with its terms. The execution, delivery and performance of this
Trademark Assignment does not conflict with, result in a breach of, or
constitute a default under any applicable law, judgment, order, injunction,
decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby further covenants and agrees that Assignor will communicate to
Assignee, its successors, legal representatives and assignees, any facts known
to Assignor respecting said marks, and at Assignee's sole expense testify in any
legal proceeding, sign all lawful papers, execute all applications for
registration, make all rightful oaths, and generally do everything possible to
aid the said Assignee, its successors, legal representatives and assigns, to
obtain and enforce proper protection for said marks in all countries.
Assignor and Assignee agree that, notwithstanding any other provision of this
Trademark Assignment, this Trademark Assignment shall be effective on and after
September 30, 1999.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Trademarks is executed at Boston,
Massachusetts, this 4th day of November, 1999.
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI, PRESIDENT
--------------------------------
Name: MICHAEL R. MELI
------------------------------
Title: PRESIDENT
-----------------------------
ATTEST:
By: /S/ BRIAN SALVAGNI
------------------------------
Name: BRIAN SALVAGNI
---------------------------
Title:
---------------------------
<PAGE>
CERTIFICATION
COMMONWEALTH OF )
MASSACHUSETTS
) ss.
COUNTY OF SUFFOLK )
On this 4th day of November, 1999, before me, the undersigned, a Notary Public
for the Commonwealth of Massachusetts, personally appeared Michael R. Meli
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the foregoing instrument as President of the
corporation named therein, and acknowledged to me that he executed the same as
his voluntary act on behalf of such corporation with authority to do so for the
purposes therein set forth.
/S/ VIRGINIA A. THOMPSON
---------------------------------
Notary Public
My Commission expires: NOVEMBER 23, 2001
EXHIBIT 10.12
ASSIGNMENT OF COPYRIGHTS
WHEREAS, Design Data Systems Corporation, a Florida corporation, having its
principal place of business at 13830 58th Street N., Suite 410, Clearwater,
Florida ("Assignor"), owns all right, title and interest in original works
(whether regarded as literary works or computer programs under applicable law)
relating to certain products designed and manufactured by Assignor, including,
but not limited to, those listed on SCHEDULE A attached hereto (collectively,
the "Work"); and
WHEREAS, SQL Acquisition LLC., a Delaware limited liability company having its
principal place of business at 2390 East Camelback Road, Suite 210, Phoenix,
Arizona 85016 ("Assignee"), desires to obtain the entire right, title, and
interest in, to and under the Work including the copyright(s) thereof , but only
Work constituting part of the Replacement Property, as defined in the Assignment
dated November 4, 1999 by and among Seller, Buyer and SQL Acquisition LLC.
NOW, THEREFORE, for good and valuable consideration paid by the Assignee to the
Assignor simultaneously herewith, pursuant to that certain Assignment Agreement
dated as of November 4, 1999 (the "Agreement"), receipt of which is hereby
acknowledged by the Assignor, and for other good and valuable consideration, the
said Assignor, subject to the penultimate paragraph hereof;
Assignor hereby assigns, transfers and sets over unto the Assignee the entire
right, title, and interest in and to the Work, the entire right, title and
interest in and to any and all statutory or common law copyrights or copyright
registrations covering the Work, including: any and all renewals and extensions
of those copyrights that may be secured under the laws now or hereafter in force
in the United States and throughout the world; any and all causes of action
heretofore accrued in the Assignor's favor for infringement of the aforesaid
copyright(s); and any and all rights, including but not limited to, the rights
to reproduce the Work in copies or other embodiment; to prepare derivative works
based upon the Work; to distribute copies or other embodiments of the Work to
the public by sale or other transfer of ownership, or by rental, lease or
lending; to perform the Work publicly; and to display the Work publicly;
To have and to hold the same unto the Assignee, its successors, legal
representatives and assigns, for and during the existence of all copyright(s)
and any and all renewals and extensions thereof absolutely and forever; and
Assignor hereby authorizes and requests the Register of Copyrights of the United
States, and any official of any country or countries foreign to the United
States, and any official of any country or countries foreign to the United
States, whose duty it is to issue copyright registrations or similar indicia of
copyright, to issue such copyright, registrations for said Work to Assignee, its
successors, legal representatives and assigns.
Assignor hereby covenants and represents that the execution, delivery and
performance of this Copyright Assignment by Assignor has been duly and validly
authorized by all necessary corporate action and this Copyright Assignment has
been duly and validly executed and delivered by Assignor and constitutes a valid
and legally binding agreement of Assignor, enforceable against Assignor in
accordance with its terms. The execution, delivery and performance of this
Copyright Assignment does not conflict with, result in a breach of, or
constitute a default under, any applicable law, judgment, order, injunction,
decree, rule or regulation, or ruling of any court or governmental
instrumentality, or the articles of incorporation, bylaws or resolutions of the
Board of Directors of Assignor, or conflict with, constitute grounds for
termination of or result in a breach of or constitute a default under any
agreement, instrument, license or permit to which Assignor is or will be
subject.
Assignor hereby covenants and agrees that Assignor shall forthwith upon
Assignee's written request and at Assignee's sole expense take any and all steps
and execute, acknowledge, and deliver to the Assignee any and all further
instruments and assurances necessary or expedient in order to vest the aforesaid
Work and copyright(s) and causes of action more effectively in the Assignee.
Assignor hereby further covenants and agrees that Assignor will communicate to
the Assignee, its successors, legal representatives and assigns, any facts known
to Assignor respecting said Work and said copyright(s), and at Assignee's sole
expense testify in any legal proceedings, sign all lawful papers, execute all
copyright applications and copyright renewal applications, make all rightful
oaths, and generally do everything possible to aid the said Assignee, its
successors, legal representatives and assigns, to obtain and enforce proper
copyright protection for said Work in all countries.
Assignor hereby constitutes and appoints the Assignee its true and lawful
attorney-in-fact with full power of substitution, in Assignor's name and stead,
but for the Assignee's benefit, to take any and all steps (including proceeding
at law, in equity or otherwise), and to execute, acknowledge and deliver any and
all instruments and assurances necessary or expedient in order to vest the
aforesaid Work and copyright(s) and causes of action more effectively in the
Assignee, or to protect the same, or to enforce any claim or right of any kind
with respect thereto. The Assignor hereby declares that the foregoing power is
coupled with an interest and is irrevocable.
Assignor and assignee agree that, notwithstanding any other provision of this
Copyright Assignment, this Copyright Assignment shall be effective on and after
September 30, 1999.
<PAGE>
IN WITNESS WHEREOF, this Assignment of Copyrights is executed at Boston,
Massachusetts, this 4th day of November, 1999.
DESIGN DATA SYSTEMS CORPORATION
By: /S/ MICHAEL R. MELI, PRESIDENT
--------------------------------
Name: MICHAEL R. MELI
-----------------------------
Title: PRESIDENT
----------------------------
ATTEST:
By: /S/ BRIAN SALVAGNI
--------------------------
Name: BRIAN SALVAGNI
------------------------
Title:
<PAGE>
CERTIFICATION
COMMONWEALTH OF )
MASSACHUSETTS
) ss.
COUNTY OF SUFFOLK )
On this 4th day of November, 1999, before me, the undersigned, a Notary Public
for the Commonwealth of Massachusetts, personally appeared Michael R. Meli,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person who executed the foregoing instrument as President of the
corporation named therein, and acknowledged to me that he executed the same as
his voluntary act on behalf of such corporation with authority to do so for the
purposes therein set forth.
/S/ VIRGINIA THOMPSON
-----------------------
Notary Public
My Commission expires: November 23, 2001
