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: May 18, 2000
(Date of earliest event reported: May 17, 2000)
TekInsight.Com, Inc.
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(Exact name of registrant as specified in its charter)
Delaware 1-11568 95-4228470
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
5 Hanover Square New York, NY 10004
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (212) 271-8550
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N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events.
On May 17, 2000, TekInsight.Com, Inc. acquired Big Technologies, Inc.
("Big"), a Boston-based provider of Internet solutions specializing in the
development of e-government sites. The merger was accomplished by merging Big
with and into a wholly-owned subsidiary of TekInsight. The two shareholders of
Big Technologies, Kyle Tager and Andrew Lee, received as consideration in the
merger $1.05 million of common stock of TekInsight (the "Share Consideration"),
based on the average market value of TekInsight's common stock over the five
trading days ending on May 17, 2000 (the "Market Average Price"), $150,000 in
cash and 3.5% of the outstanding common stock of the surviving entity, also
called Big Technologies, Inc. The shareholders can also earn up to $650,000 upon
the surviving company attaining certain revenue levels during the twelve months
ending on the first anniversary of the closing of the merger. Further,
TekInsight has the right until November 30, 2000 to purchase (the "Call Right")
up to $100,000 of the Share Consideration at the Market Average Price, and, to
the extent that TekInsight does not exercise its Call Right, the former Big
shareholders have the right during the month of December 2000 to sell to
TekInsight up to $100,000 of Share Consideration at the Market Average Price.
In connection with the merger, Mr. Tager, formerly the president and
chief executive officer of Big, signed a three-year employment agreement to
continue as president and chief executive officer of the surviving entity.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit 2.1 Agreement and Plan of Merger, dated as of May
17, 2000, among TekInsight.Com, Inc., BigTech
Acquisition Corp. and Big Technologies, Inc.
Exhibit 10.1 Shareholders Agreement, dated as of May 17,
2000, among TekInsight.Com, Inc., Big
Technologies, Inc. and the Shareholders.
Exhibit 10.2 Employment Agreement, dated as of May 17,
2000, between Big Technologies, Inc.,
TekInsight.Com, Inc. and Kyle Tager.
Exhibit 10.3 Form of Non-Compete Agreement to be executed
by Big Technologies, Inc. with certain key
employees.
Exhibit 99.1 Press release dated May 17, 2000.
Exhibit 99.2 Press release dated May 17, 2000.
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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.
Dated: May 18, 2000 TEKINSIGHT.COM, INC.
By:/s/Arion Kalpaxis
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Arion Kalpaxis,
Chief Operating Officer
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EXHIBIT INDEX
Exhibit Number Exhibit Name
Exhibit 2.1 Agreement and Plan of Merger, dated as of May
17, 2000, among TekInsight.Com, Inc., BigTech
Acquisition Corp. and Big Technologies, Inc.
Exhibit 10.1 Shareholders Agreement, dated as of May 17,
2000, among TekInsight.Com, Inc., Big
Technologies, Inc. and the Shareholders.
Exhibit 10.2 Employment Agreement, dated as of May 17,
2000, between Big Technologies, Inc.,
TekInsight.Com, Inc. and Kyle Tager.
Exhibit 10.3 Form of Non-Compete Agreement to be executed
between Big Technologies, Inc. and certain
key employees.
Exhibit 99.1 Press release dated May 17, 2000.
Exhibit 99.2 Press release dated May 17, 2000.
Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER (this "Agreement"), entered into this 17th
day of May, 2000, by and among TEKINSIGHT.COM, INC., a Delaware corporation
("Tek"), having its principal offices at 5 Hanover Square, New York, NY 10004,
BIG TECH ACQUISITION CORP., a Delaware corporation ("Mergerco"), having its
principal offices c/o TekInsight.Com, Inc., 5 Hanover Square, New York, NY
10004; BIG TECHNOLOGIES, INC., a Delaware corporation with its principal office
at 236 Huntington Avenue, #215, Boston, MA 02115 (the "Company"); and Kyle M.
Tager, having an address at 128 Exeter Street, #311, Boston, MA 02116 ("Tager")
and Andrew L. Lee, having an address at 305 W. 86th Street, Apt. 2A, New York,
NY 10025 ("Lee", with each of Tager and Lee being referred to as a "Stockholder"
and collectively as the "Stockholders").
W I T N E S S E T H:
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WHEREAS, the Stockholders are the record and beneficial owners of 100%
of the issued and outstanding shares of the common stock of the Company, $1.00
par value ("the Big Common Stock") and there are (a) no outstanding options and
warrants to purchase Common Stock, (b) no convertible notes, convertible
debentures, shares of convertible preferred stock or other securities
convertible into shares of Big Common Stock, and (c) no other rights and
privileges to receive or acquire shares of Big Common Stock (collectively, the
"Fully Diluted Equity");
WHEREAS, Mergerco is a direct wholly-owned subsidiary of Tek, which has
been formed for the purpose of effecting the Merger (as defined below) of the
Company with and into Mergerco, with Mergerco being the Surviving Corporation
(as defined below) of the Merger, and thereby enabling Tek to acquire all of the
shares of capital stock of the Company as shall represent the Fully Diluted
Equity of the Company at the effective date of the Merger (hereinafter referred
to as the "Stock") pursuant to this Agreement as hereinafter provided for; and
WHEREAS, the Stockholders, the Board of Directors of each of (i) the
Company, (ii) Mergerco and (iii) Tek, with Tek being the sole stockholder of
Mergerco, have all authorized and approved the Merger and the consummation of
the other transactions contemplated by this Agreement, all on the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements herein set forth, the parties hereby covenant and agree
as follows:
1. THE MERGER.
1.1. The Merger. At the time of the Closing on the Closing Date (as
such terms are hereinafter defined) and in accordance with the provisions of
this Agreement and the applicable provisions of the Delaware General Corporation
Law ("DGCL"), the Company shall be merged with and into Mergerco (the "Merger")
in accordance with the terms and conditions of this Agreement and a certificate
of merger to be filed with the Secretary of State of the State of Delaware in
substantially the form of Exhibit A annexed hereto (the "Certificate of
Merger"), with Mergerco as the surviving corporation of such Merger (Mergerco
hereinafter being
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sometimes referred to as the "Surviving Corporation"). Thereupon, the separate
existence of the Company shall cease, and Mergerco, as the Surviving
Corporation, shall continue its corporate existence under the DGCL under the
name "Big Technologies, Inc.".
1.2. Effectiveness of the Merger. As soon as practicable upon or after
the satisfaction or waiver of the conditions precedent set forth in Sections 6
and 7 below, Mergerco and the Company will execute the Certificate of Merger
(subject to such revisions as to form (but not substance) as may be required by
the relevant provisions of the DGCL), and shall file or cause to be filed such
Certificate of Merger with the Secretary of State of the State of Delaware; and
the Merger shall become effective as of the date of the filing of such
Certificate of Merger, which shall occur on the "Closing Date" (as hereinafter
defined), and the Closing shall be deemed to occur as of such Closing Date in
accordance with Section 8 hereof.
1.3. Effect of the Merger. Upon the effectiveness of the Merger: (a)
the Surviving Corporation shall own and possess all assets and property of every
kind and description, and every interest therein, wherever located, and all
rights, privileges, immunities, powers, franchises and authority of a public as
well as of a private nature, of each of Mergerco and the Company (the
"Constituent Corporations"), and all obligations owed to, belonging to or due to
each of the Constituent Corporations, all of which shall be vested in the
Surviving Corporation pursuant to the DGCL, without further act or deed, and (b)
the Surviving Corporation shall be liable for all claims, liabilities and
obligations of each of the Constituent Corporations, all of which shall become
and remain the obligations of the Surviving Corporation pursuant to the DGCL,
without further act or deed.
1.4. Surviving Corporation. Upon the effectiveness of the Merger, the
Certificate of Incorporation, By-Laws, directors and officers of the Surviving
Corporation shall be those of Mergerco as in effect immediately prior to the
effectiveness of the Merger, except that the Certificate of Incorporation shall
be amended to change the name of the Surviving Corporation to "Big Technologies,
Inc."
1.5. Status and Conversion of Securities. At the Closing Date and upon
the effectiveness of the Merger:
(a) Mergerco Stock. Each share of capital stock of the Company
outstanding immediately prior to the effectiveness of the Merger, representing
the Fully Diluted Equity of the Company, shall be canceled and extinguished and
automatically converted into the right to receive that number of shares of
common stock of Tek, par value $.0001 per share ("Tek Common Stock"), found by
(i) dividing (A) $1,050,000 by (B) the Market Average Price of a share of Tek
Common Stock (such number of shares of Tek Common Stock being the "Share Merger
Closing Consideration") and (ii) dividing that number by the number of shares of
the Company's Stock outstanding as of the Closing Date of the Merger. The
"Market Average Price" of each share of Tek Common Stock shall be equal to the
average closing price for one share of Tek Common Stock, as reported by The
Nasdaq SmallCap Market, for the five (5) consecutive trading days ending on the
trading day that immediately precedes the Closing Date of the Merger. Each
Stockholder shall receive his pro rata portion of the Share Closing Merger
Consideration, which shall equal that number of shares of Tek Common Stock set
forth opposite his name on Schedule 1.5 attached hereto. In the event that the
above calculation would produce
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a fraction of a share of Tek Common Stock as part of the Merger Closing
Consideration, such number of shares of Tek Common Stock shall be rounded up to
the nearest whole number of shares of Tek Common Stock.
(b) Cash Merger Consideration. Each Stockholder shall receive his pro
rata share of $150,000 in cash, which amount shall be set forth opposite his
name on Schedule 1.5 to be paid by certified check (the "Cash Merger Closing
Consideration", and, together with the Share Merger Closing Consideration, the
"Merger Closing Consideration").
(c) The Merger Closing Consideration shall be paid and delivered to the
holders of the outstanding Stock upon:
(A) surrender to the Surviving Corporation of the certificates
representing such shares of outstanding Stock (all of which
shall be delivered free and clear of any and all pledges,
liens, claims, charges, options, calls, encumbrances,
restrictions and assessments whatsoever, except any
restrictions which may be created by operation of state or
federal securities laws) at the time and place of the Closing
as provided in Section 8 below; and
(B) delivery to the Surviving Corporation and Tek by the
subject holder of Stock of an appropriate letter confirming
(w) such holder's ownership of his or her Stock free and clear
as aforesaid (which representation and warranty shall survive
the Closing), (x) such information regarding such Stockholder
and his background and financial status as may reasonably be
requested by Tek, (y) such Stockholder's investment intent
with respect to the Tek Common Stock being received by such
Stockholder pursuant to Section 1.5 hereof and (z) such other
representations with respect to the Stockholder's status and
the transfer restrictions applicable to such Tek Common Stock
under Rule 144 and 145 as promulgated by the Securities and
Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended (the "Act").
1.6. Earn-Out. In the event that Mergerco achieves those earnings
targets set forth on Schedule 1.6 attached hereto (the "Milestones"), each
Stockholder shall receive his pro rata share of the Earn-Out Merger
Consideration. The Earn-Out Merger Consideration shall equal the number of
shares of Tek Common Stock equal to (A) $650,000 divided by (B) the Market
Average Price of a share of Tek Common Stock. The Earn-Out Merger Consideration
shall be distributed to the Stockholders in three equal installments, each
distribution to be made within 15 days after the close of each full fiscal
quarter of Mergerco following the Closing Date commencing with the fiscal
quarter ending on September 30, 2000, upon the achievement of each Milestone,
with achievement of the Milestones being determined on a cumulative basis. For
example, if a Milestone is not met for one fiscal quarter or for two fiscal
quarters successively, and as a result no Earn-Out Merger Consideration is paid
for such fiscal quarter or quarters, but the Milestones, on a cumulative basis,
are subsequently met in a succeeding fiscal quarter, then the Stockholders shall
be entitled to the Earn-Out Consideration payable for the fiscal quarters for
which the cumulative Milestones have been met.
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1.7. Liquidation of Shares. During the period from the Closing Date of
the Merger through November 30, 2000, Tek has the right (the "Liquidation
Right"), on written notice to the Shareholders, to repurchase, pro rata from
each Shareholder, up to that aggregate number of the shares of Tek Common Stock
delivered to the Shareholders as the Share Merger Closing Consideration equal to
$100,000 divided by the Market Average Price. However, if Tek has not exercised
its Liquidation Right in full by close of business on November 30, 2000, then
that portion of the Liquidation Right remaining unexercised shall immediately
vest in the Shareholders, and each Shareholder may, on written notice to Tek no
later than December 31, 2000, require Tek to repurchase from him that number of
shares which were not purchased by Tek upon its prior exercise of its
Liquidation Right equal to his pro rata share of $100,000 divided by the Market
Average Price which were not purchased by Tek in its prior exercise of the
Liquidation Right. Any fractional share amounts to be purchased shall be rounded
up to the nearest whole number of shares.
1.8. Books and Records. On the Closing Date, the Company shall deliver
to Tek all of the stock books, records and minute books of the Company, all
financial and accounting books and records of the Company, and all referral,
client, customer and sales records of the Company.
2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY AND THE STOCKHOLDERS.
The Company and each Stockholder severally (and not on behalf of the
other Stockholder) hereby represents and warrants to Mergerco and Tek as
follows:
2.1. Ownership of the Stock.
(a) The number of shares of outstanding Stock, the record owners
thereof, and the record addresses and social security number or tax
identification number of each of the Stockholders, are as set forth on Schedule
2.4 annexed hereto. Each Stockholder is the legal and beneficial owner of his
shares of the Stock, free and clear of all pledges, liens, claims, charges,
options, calls, encumbrances, restrictions and assessments whatsoever, except
any restrictions which may be created by operation of state or federal
securities laws.
(b) Schedule 2.4 accurately sets forth the number of shares of Stock
owned of record and beneficially by each Stockholder, and all of the Stock of
each Stockholder has been duly authorized and validly issued, and is fully paid
and non-assessable.
2.2. Valid and Binding Agreement.
(a) The execution, delivery and performance of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby by the
Company have been duly and validly authorized by the Board of Directors of the
Company and the unanimous vote of the stockholders of the Company. The Company
has the full legal right, power and authority to execute and deliver this
Agreement and, upon obtaining necessary approval of the stockholders of the
Company, will have the full power and authority to perform its obligations
hereunder and to consummate the transactions contemplated hereby. This Agreement
constitutes the legal, valid and binding obligation of the Company, enforceable
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against the Company and the Stockholders in accordance with its terms, except to
the extent limited by bankruptcy, insolvency, reorganization and other laws
affecting creditors' rights generally, and except that the remedy of specific
performance or similar equitable relief is available only at the discretion of
the court before which enforcement is sought.
(b) Each Stockholder has the full legal right, power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby. This Agreement and, when executed and delivered by each
Stockholder who is to become a party thereto, the Employment Agreement, the
Non-Competition Agreement (if applicable to a Stockholder), the Subscription
Agreement, and the Stockholder Agreement (as such terms are hereinafter
defined), constitutes and will constitute the legal, valid and binding
obligations of such Stockholder, enforceable against such Stockholder in
accordance with their respective terms, except to the extent limited by
bankruptcy, insolvency, reorganization and other laws affecting creditors'
rights generally, and except that the remedy of specific performance or similar
equitable relief is available only at the discretion of the court before which
enforcement is sought.
2.3. Organization, Good Standing and Qualification.
(a) The Company: (i) is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware; (ii) has all
necessary corporate power and authority to carry on its business and to own,
lease and operate its properties; and (iii) is not required, by the nature of
its properties or business, to be qualified to do business as a foreign
corporation in any other foreign jurisdiction in which the failure to be so
qualified would have a material adverse effect on the Company or its business or
financial condition.
(b) The Company has no subsidiary corporations.
(c) True and complete copies of the Articles of Incorporation and
By-Laws of the Company (including all amendments thereto), and a correct and
complete list of the officers and directors of the Company, are annexed hereto
as Schedule 2.3.
2.4. Capital Structure; Stock Ownership.
(a) The authorized and outstanding shares of capital stock of the
Company, and the record owners of such shares of capital stock, and all
outstanding options, warrants and other securities convertible, exchangeable or
exercisable for shares of capital stock of the Company are as set forth on
Schedule 2.4 annexed hereto. Other than as set forth on Schedule 2.4, no other
shares of capital
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stock of the Company are issued or outstanding.
(b) Except as set forth in Schedule 2.4 annexed hereto (all of which
agreements and commitments will be terminated and canceled as of the Closing
Date, without any payment by the Company), there are no outstanding
subscriptions, options, rights, warrants, convertible securities or other
agreements or calls, demands or commitments: (i) obligating the Company to
issue, transfer or purchase any shares of its capital stock, or (ii) obligating
the Stockholders to transfer any shares of the Stock owned by such Stockholder.
Other than in respect of the stock purchase rights described in Schedule 2.4
(all of which shall be terminated and canceled as of the Closing Date, without
any payment by the Company), no shares of capital stock of the Company are
reserved for issuance pursuant to stock options, warrants, agreements or other
rights to purchase capital stock.
2.5. Investments. Except as set forth on Schedule 2.5, the Company does
not own, directly or indirectly, any stock or other equity securities of any
corporation or entity, or have any direct or indirect equity or ownership
interest in any person, firm, partnership, corporation, venture or business
other than the business conducted by the Company.
2.6. Financial Information.
(a) The Company has furnished to Tek the unaudited financial
information of the Company as kept by it on its accounting systems (i) for the
fiscal year ended December 31, 1999, (the "1999 Financial Information"); and
(ii) as at March 31, 2000 (the "March 2000 Financial Information"). Such 1999
Financial Information and March 2000 Financial Information are herein
collectively referred to as the "Financial Information".
(b) Except as provided in Schedule 2.6(b), the Financial Information is
complete and correct in all material respects and present fairly the financial
position of the Company as of the dates thereof and for the periods reflected
therein.
(c) Except as expressly set forth in the Financial Information and/or
in the Schedules to this Agreement, to the best knowledge of the Company and the
Stockholders, there are, as at the date hereof, no liabilities or obligations
(including, without limitation, any tax liabilities or accruals) of the Company,
including any contingent liabilities, that are, in the aggregate, material.
(d) The Company has furnished to Tek: (i) a list of any leasehold or
other contractual obligations of the Company to the Stockholders and/or any of
their respective Affiliates on the date hereof; (ii) a list of all obligations
of the Company guaranteed by the Stockholders and/or any of their respective
Affiliates on the date hereof, and the terms of such guarantees; (iii) a list
reflecting the nature and amount of all obligations owed to the Company on the
date hereof by the Stockholders and/or any of their respective Affiliates; and
(iv) a list reflecting the nature and amount of all obligations owed by the
Company on the date hereof to the Stockholders and/or any of their respective
Affiliates. Wherever used in this Agreement, the term "Affiliate" means, as
respects any person or entity, any other person or entity that directly, or
indirectly through one or more intermediaries, controls, is controlled by, or is
under common control with the first person or entity.
2.7. Certain Adverse Changes. The Company and the Stockholders
acknowledge that, since December 31, 1999, there have not been any material or
adverse changes in the financial condition, operations or business of the
Company from that shown in the Financial Information. Except as and to the
extent described in Schedule 2.7 annexed hereto (which Schedule may make
reference to any other Schedule hereto or to any other document(s) referred to
in this Agreement which has heretofore been delivered to Mergerco), since
December 31, 1999, the business of the Company has continued to be operated only
in the ordinary course, and there has not been:
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(a) Any damage, destruction or loss, whether covered by insurance or
not, materially and adversely affecting the business, operations, assets,
properties, financial condition or prospects of the Company; or
(b) Any declaration, setting aside or payment of any dividend or other
distribution with respect to the Stock, any other payment of any kind by the
Company to any of its stockholders or any of their respective Affiliates, any
forgiveness of any debt or obligation owed to the Company by any of its
stockholders or any of their respective Affiliates, or any direct or indirect
redemption, purchase or other acquisition by the Company of any capital stock of
the Company.
2.8. Tax Returns and Tax Audits.
(a) Except as and to the extent disclosed in Schedule 2.8 annexed
hereto: (i) on the date hereof and on the Closing Date, all federal, state and
local tax returns and tax reports required to be filed by the Company on or
before the date of this Agreement or the Closing Date, as the case may be, have
been and will have been timely filed with the appropriate governmental agencies
in all jurisdictions in which such returns and reports are required to be filed;
(ii) all federal, state and local income, franchise, sales, use, property,
excise and other taxes (including interest and penalties and including estimated
tax installments where required to be filed and paid) due from or with respect
to the Company as of the date hereof and as of the Closing Date have been and
will have been fully paid, and appropriate accruals shall have been made on the
Company's books for taxes not yet due and payable; (iii) as of the Closing Date,
all taxes and other assessments and levies which the Company is required by law
to withhold or to collect on or before the Closing Date will have been duly
withheld and collected, and will have been paid over to the proper governmental
authorities to the extent due and payable on or before the Closing Date; and
(iv) there are no outstanding or pending claims, deficiencies or assessments for
taxes, interest or penalties with respect to any taxable period of the Company.
At and after the Closing Date, the Company will have no liability for any
federal, state or local income tax with respect to any taxable period ending on
or before the Closing Date, except as and to the extent disclosed in Schedule
2.8.
(b) There are no audits pending with respect to any federal, state or
local tax returns of the Company, and no waivers of statutes of limitations have
been given or requested with respect to any tax years or tax filings of the
Company.
2.9. Personal Property; Liens. Except as provided in Schedule 2.9
annexed hereto, the Company has and owns good and marketable title to all of its
tangible and intangible personal property, including therein all software,
software developments and related technology, free and clear of all liens,
pledges, claims, security interests and encumbrances whatsoever. All material
items of machinery, equipment, vehicles and other personal property owned or
leased by the Company are listed in Schedule 2.9 annexed hereto, and, except as
and to the extent disclosed in Schedule 2.9, all of such personal property are
in good operating condition and repair (reasonable wear and tear excepted) and
are adequate for their use in the Company's business as presently conducted.
2.10. Real Property.
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(a) The Company neither owns nor has any interest of any kind (whether
ownership, lease or otherwise) in any real property except to the extent of the
Company's leasehold interests under the leases for its business premises, true
and complete copies of which leases (including all amendments thereto) are
annexed hereto as Schedule 2.10 (the "Leases").
(b) The Company is presently in compliance with all of its obligations
under the Leases, and the premises leased thereunder are in good condition
(reasonable wear and tear excepted) and are adequate for the operation of the
Company's business as presently conducted.
2.11. Insurance Policies; Bank Accounts. Schedule 2.11 annexed hereto
contains (i) a true and correct schedule of all insurance policies held by the
Company concerning its business and properties (including but not limited to
professional liability insurance), and (ii) a complete list of all bank accounts
and safe deposit boxes maintained by or on behalf of the Company, with
indication of all persons having signatory, access or other authority with
respect thereto.
2.12. Permits and Licenses. The Company possesses all permits, licenses
and/or franchises, from whatever governmental authorities or agencies (domestic
and/or foreign) requiring the same and having jurisdiction over the Company,
which are necessary in order to operate its business in the manner presently
conducted, all of which permits, licenses and/or franchises are valid, current
and in full force and effect; and none of such permits, licenses or franchises
will be voided, revoked or terminated, or voidable, revocable or terminable,
upon and by reason of the Merger and the change of ownership of the Company
pursuant to this Agreement.
2.13. Contracts and Commitments.
(a) Schedule 2.13 annexed hereto lists all material contracts, leases,
commitments, technology agreements, software development agreements, web design
agreements, hosting agreements, software or technology licenses, consulting
agreements, employment agreements and employment offer letters, indentures and
other agreements to which the Company is a party (collectively, "Material
Contracts"), except that Schedule 2.13 need not list any such agreement that is
listed on any other Schedule hereto, or was entered into in the ordinary course
of the business of the Company and that, in any case: (i) is for the purchase of
supplies or other inventory items in the ordinary course of business; (ii) is
related to the purchase or lease of any capital asset involving aggregate
payments of less than $5,000 per annum; or (iii) may be terminated without
penalty, premium or liability by the Company on not more than thirty (30) days'
prior written notice; provided, however, that Schedule 2.13 shall list all
technology agreements, software or development agreements, web design
agreements, hosting agreements, and software or technology licenses involving
the Company or any Affiliate, regardless of the duration thereof or the amount
of payments called for or required thereunder.
(b) Except as set forth in Schedule 2.13: (i) all Material Contracts
are in full force and effect; (ii) the Company is in compliance with all of its
obligations under the Material Contracts, and has not received any written
notice that any Material Contract is in
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breach or default or is now subject to any condition or event which has occurred
and which, after notice or lapse of time or both, would constitute a default by
any party under any such contract, lease, agreement or commitment; and (iii)
none of the Material Contracts will be voided, revoked or terminated, or become
voidable, revocable or terminable, upon and by reason of the Merger and the
change of ownership of the Company pursuant to this Agreement;
(c) There is no outstanding power of attorney granted by the Company to
any person, firm or corporation for any purpose whatsoever.
2.14. Customers and Suppliers. None of the Company or any Stockholder
has any knowledge of, nor has received any written notice of, any existing,
announced or anticipated changes in the policies of any material clients,
customers or suppliers of the Company which will materially adversely affect the
business presently being conducted by the Company.
2.15. Labor, Benefit and Employment Agreements.
(a) Except as set forth in Schedule 2.15. annexed hereto, the Company
is not a party to (i) any collective bargaining agreement or other labor
agreement, or (ii) any agreement with respect to the employment or compensation
of employee(s). No union is now certified or, to the best of the knowledge of
the Company and the Stockholders, claims to be certified as a collective
bargaining agent to represent any employees of the Company, and there are no
labor disputes existing or, to the best of the knowledge of the Company and the
Stockholders, threatened, involving strikes, slowdowns, work stoppages, job
actions or lockouts of any employees of the Company.
(b) Except as set forth on Schedule 2.15, there are no unfair labor
practice charges or petitions for election pending or being litigated before the
National Labor Relations Board or any other federal or state labor commission
relating to any employees of the Company. The Company has not received any
written notice of any actual or alleged violation of any law, regulation, order
or contract term affecting the collective bargaining rights of employees, equal
opportunities in employment, or employee health, safety, welfare, or wages and
hours.
(c) The Company has never at any time been required to make
contributions to any "multiemployer plan" (as defined in Section 3(37) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA")).
(d) Except as disclosed on Schedule 2.15, the Company does not maintain
or have any liabilities or obligations of any kind with respect to, any bonus,
deferred compensation, pension, profit sharing, retirement or other such benefit
plan, and does not have any potential or contingent liability in respect of any
actions or transactions relating to any such plan other than to make
contributions thereto if, as and when due in respect of periods subsequent to
the date hereof.
(e) Except for the group insurance programs listed in Schedule 2.15,
the Company does not maintain any medical, health, life or other employee
benefit insurance programs or any welfare plans (within the meaning of Section
3(1) of ERISA) for the benefit of
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any current or former employees, and, except as required by law, the Company has
no liability, fixed or contingent, for health or medical benefits to any former
employee.
2.16. No Breach of Statute, Decree or Other Instrument.
(a) Except as set forth in Schedule 2.16 annexed hereto: (i) neither
the execution and delivery of this Agreement by the Company and/or the
Stockholders, nor the performance of or compliance with the terms and provisions
of this Agreement on the part of the Company and/or the Stockholders, will
violate or conflict with any term of the Articles of Incorporation or By-Laws of
the Company or any statute, law, rule, regulation, executive order, decree,
injunction or other order (whether temporary, preliminary or permanent) of any
governmental authority which is in effect and affects the existing business of
the Company, or will at the Closing Date conflict with, result in a breach of,
or constitute a default under, any of the terms, conditions or provisions of any
judgment, order, award, injunction, decree, contract, lease, agreement,
indenture or other instrument to which the Company or the Stockholders is a
party or by which the Company or the Stockholders is bound; (ii) no consent,
authorization, order or approval of or filing with any governmental authority or
agency, or any third party, will be required on the part of the Company or the
Stockholders in connection with the consummation of the Merger and the other
transactions contemplated hereby; and (iii) the Company will not be required,
whether by law, regulation or administrative practice, to reapply for or refile
to obtain any of the licenses, permits or other authorizations presently held by
the Company and required for the operation of its business as conducted on the
date hereof.
(b) In connection with and as respects the Merger, the Company and each
Stockholder has waived any and all rights which he may have (by way of right of
first refusal, right of first offer, or otherwise) to purchase any of the Stock
by reason of the proposed disposition thereof by any Stockholder pursuant to the
Merger.
2.17. Compliance with Laws.
(a) Except as set forth on Schedule 2.17, to the best knowledge of the
Company and the Stockholders, the Company has not, at any time since the
inception of the Company, (i) handled, stored, generated, processed or disposed
of any hazardous substances in violation of any federal, state or local
environmental laws or regulations, (ii) otherwise committed any material
violation of any federal, state or local environmental laws or regulations
(including, without limitation, the provisions of the Environmental Protection
Act and other applicable environmental statutes and regulations) or any material
violation of the Occupational Safety and Health Act, or (iii) been in material
violation of any requirements of its insurance carriers from time to time.
(b) Except as set forth on Schedule 2.17 annexed hereto, neither the
Company nor any of its current officers has received any written notice of
default or violation, nor, to the best knowledge of the Company and the
Stockholders, is the Company in default or violation, with respect to any
judgment, order, writ, injunction, decree, demand or assessment issued by any
court or any federal, state, local, municipal or other governmental agency,
board, commission, bureau, instrumentality or department, domestic or foreign,
relating to any aspect of the Company's business, affairs, properties or assets.
Neither the Company nor any of its current
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officers has received written notice of, been charged with, or is under
investigation with respect to, any violation of any provision of any federal,
state, local, municipal or other law or administrative rule or regulation,
domestic or foreign, relating to any aspect of the Company's business, affairs,
properties or assets, which violation would have a material adverse effect on
the Company, its business or any material portion of its assets.
(c) Schedule 2.17 sets forth the date(s) of the last known audits or
inspections (if any) of the Company conducted by or on behalf of the
Environmental Protection Agency, the Occupational Safety and Health
Administration, and any other governmental and/or quasi-governmental agency
(federal, state and/or local).
2.18. Litigation. Except as disclosed in Schedule 2.18 annexed hereto,
there is no suit, action, arbitration, or legal, administrative or other
proceeding, or governmental investigation (including, without limitation, any
claim alleging the invalidity, infringement or interference of any patent,
patent application, or rights thereunder owned or licensed by the Company)
pending, or to the best knowledge of the Company and the Stockholders,
threatened, by or against the Company or any of its assets or properties.
2.19. Patents, Licenses and Trademarks. Schedule 2.19 annexed hereto
correctly sets forth a list and brief description of the nature and ownership
of: (a) all patents, patent applications, copyright registrations and
applications, registered trade names, and trademark registrations and
applications, both domestic and foreign, which are presently owned, filed or
held by the Company and/or any of its directors, officers, stockholders,
employees, or independent contractors and which in any way relate to or are used
in the business of the Company; (b) all licenses, both domestic and foreign,
which are owned or controlled by the Company and/or any of its directors,
officers, stockholders, employees, or independent contractors and which in any
way relate to or are used in the business of the Company; and (c) all
franchises, licenses and/or similar arrangements granted to the Company by
others and/or to others by the Company. None of the patents, patent
applications, copyright registrations or applications, registered trade names,
trademark registrations or applications, franchises, licenses or other
arrangements set forth or required to be set forth in Schedule 2.19 is subject
to any pending challenge, or threatened challenge known to the Company or the
Stockholders.
2.20. Transactions with Affiliates. Except as disclosed on Schedule
2.20, no material asset employed in the business of the Company is owned by,
leased from or leased to any of the Stockholders of the Company, any of their
respective Affiliates, members of their families or any partnership, corporation
or trust for their benefit, or any other officer, director, employee, or
independent contractors of the Company or any Affiliate of the Company.
2.21. Schedules Incorporated by Reference. The making of any recitation
in any Schedule hereto shall be deemed to constitute a representation and
warranty that such recitation is an accurate statement and disclosure of the
information required by the corresponding Section(s) of this Agreement, as, to
the extent, and subject to the qualifications and limitations, set forth in such
corresponding Section(s).
2.22. Disclosure and Duty of Inquiry. Neither Tek nor Mergerco is or
will be required to undertake any independent investigation to determine the
truth, accuracy and
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completeness of the representations and warranties made by the Company and the
Stockholders in this Agreement.
2.23. Ownership of Tek Common Stock or Other Securities. None of (i)
the Company, (ii) any Stockholder, (iii) the Stockholders taken together, or
(iv) the Company and the Stockholders, taken together, either individually or in
the aggregate own of record or beneficially (as determined in accordance with
the definitions provided under Regulation 13d-3 promulgated under the Exchange
Act) five (5%) percent or more of the outstanding Tek Common Stock (the
"Percentage") on the date hereof, and such ownership by any of such persons and
groups will not equal or exceed the Percentage on the Closing Date.
3. REPRESENTATIONS AND WARRANTIES OF MERGERCO AND TEK.
Mergerco and Tek hereby jointly and severally represent and warrant to
the Company and the Stockholders, as follows:
3.1. Organization, Good Standing and Qualification. (a) Each of
Mergerco and Tek is a corporation duly organized, validly existing and in good
standing under the laws of its state of incorporation, with all necessary power
and authority to execute and deliver this Agreement, to perform its obligations
hereunder, and to consummate the transactions contemplated hereby.
(b) True and complete copies of the Articles of Incorporation and
By-Laws of Mergerco (including all amendments thereto), and a correct and
complete list of the officers and directors of Mergerco to hold office
immediately following completion of the transactions contemplated hereby, are
annexed hereto as Schedule 3.1.
3.2. Authorization of Agreement. The execution, delivery and
performance of this Agreement, the Employment Agreement, the Non-Competition
Agreement (with any Stockholder signatory thereto), and the Stockholder
Agreement, and the consummation of the Merger and the other transactions
contemplated hereby by Mergerco and Tek, have been duly and validly authorized
by the Board of Directors and (as legally required under the DGCL) the sole
stockholder of Mergerco, and by the Boards of Directors of Mergerco and Tek; and
Mergerco and Tek have the full legal right, power and authority to execute and
deliver this Agreement, the Employment Agreement, the Non-Competition Agreement
and the Stockholder Agreement, and to perform their respective obligations
hereunder and thereunder, and to consummate the transactions contemplated hereby
and thereby. No further corporate authorization is necessary on the part of
Mergerco or Tek to consummate the transactions contemplated hereby and thereby.
3.3. Valid and Binding Agreement. This Agreement, the Employment
Agreement, the Non-Competition Agreement, the Lee Non-Competition Agreement and
the Stockholder Agreement constitutes the legal, valid and binding obligation of
Mergerco and/or Tek (if a signatory), enforceable against Mergerco and Tek in
accordance with its terms, and each of this Agreement, the Employment Agreement,
the Non-Competition Agreement (with any Stockholder signatory thereto) and the
Stockholder Agreement, constitutes and will constitute the legal, valid and
binding obligations of the Surviving Corporation and Tek (as the case may be),
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enforceable against the Surviving Corporation and Tek in accordance with their
respective terms, except, in each case, to the extent limited by bankruptcy,
insolvency, reorganization and other laws affecting creditors' rights generally,
and except that the remedy of specific performance or similar equitable relief
is available only at the discretion of the court before which enforcement is
sought.
3.4. No Breach of Statute or Contract. Neither the execution and
delivery of this Agreement by Mergerco or Tek, nor compliance with the terms and
provisions of this Agreement on the part of Mergerco or Tek, will: (a) violate
any statute, law, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) of any governmental
authority which is in effect and which affects Mergerco or Tek; (b) require the
issuance of any authorization, order, consent or approval of or filing with any
governmental authority or agency, or any third party; or (c) conflict with or
result in a breach of any of the terms, conditions or provisions of any
judgment, order, injunction, decree, note, indenture, loan agreement or other
agreement or instrument to which Mergerco or Tek is a party, or by which
Mergerco or Tek is bound, or constitute a default thereunder.
3.5. Capitalization of Tek.
Tek is (i) authorized to issue 100,000,000 shares of Tek Common Stock,
$.0001 par value per share and 10,000,000 shares of Preferred Stock (the
"Preferred Stock"); (ii) 15,913,529 shares of Tek Common Stock were issued and
outstanding at March 31, 2000.
3.6. Tek Common Stock. When issued and delivered pursuant to Section
1.5 above as Merger Closing Consideration, all of the Tek Common Stock so issued
shall have been duly authorized and validly issued, and shall be fully paid and
non-assessable, and shall be free of any pre-emptive rights or other
limitations.
3.7. Investment. Tek will be acquiring ownership of the outstanding
capital stock of the Company for its own account, for investment purposes only,
and not with a view to the resale or distribution thereof.
3.8. Business of Mergerco. Mergerco has been formed solely for the
purposes of consummating the transactions contemplated by this Merger Agreement,
has not conducted and will not conduct any independent business operations until
the Closing Date of the Merger, and at the Closing Date will have no liabilities
(or obligations to assume any liabilities), except those acquired from the
Company.
3.9. Disclosure and Duty of Inquiry. The Company and the Stockholders
are not and will not be required to undertake any independent investigation to
determine the truth, accuracy and completeness of the representations and
warranties made by Mergerco and Tek in this Agreement.
3.10. Due Diligence by Tek and/or Mergerco. Tek and Mergerco (i) have
had reasonable access to the Company's Financial Information, the books and
records available at the Company's offices or as provided by the Company in
response to specific requests of the Stockholders; (ii) the Company permitted
Tek and Mergerco to make such reasonable inspections thereof as they requested;
and (iii) the Stockholders furnished Tek and Mergerco
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with such financial, operating data and other information with respect to the
Company as requested by Tek and/or Mergerco.
3.11. Disclosure Documents. Tek has delivered to the Company and the
Stockholders its Annual Report on Form 10-K for the year ended June 30, 1999,
and all other reports filed by Tek with the Commission under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), since June 30, 1999
(including the Tek Reports on Form 10-Q and Form 8-K), all of which reports are
in proper form and are in compliance with Commission rules and regulations, and
none of which contain material misstatements of material facts or omit such
information as would be necessary to make the information contained therein not
materially misleading (except as otherwise corrected by a subsequent filing
delivered to the Company and the Stockholders). As of their respective dates,
the financial statements of Tek included in such reports (the "Tek Financial
Statements") complied when filed as to form in all material respects with
applicable accounting requirements and with the published rules and regulations
of the Securities and Exchange Commission and NASDAQ with respect thereto, and
were, when filed, in accordance with the books and records of Tek, complete and
accurate in all material respects, and presented fairly the consolidated
financial position and the consolidated results of operations, changes in
stockholders' equity and cash flows of Tek and its subsidiaries as of the dates
and for the periods indicated, in accordance with GAAP, subject in the case of
interim financial statements to normal year-end adjustments and the absence of
certain footnote information.
3.12. Certain Adverse Changes. Tek acknowledges that, since March 31,
2000, there have not been any material or adverse changes in the financial
condition, operations or business of Tek from that shown in the Tek Financial
Statements. Except as and to the extent described in Schedule 3.12 annexed
hereto, since March 31, 2000, the business of Tek has continued to be operated
only in the ordinary course, and there has not been any damage, destruction or
loss, whether covered by insurance or not, materially and adversely affecting
the business, operations, assets, properties, financial condition or prospects
of Tek.
3.13. Tax Returns and Tax Audits.
(a) Except as and to the extent disclosed in Schedule 3.13 annexed
hereto: (i) on the date hereof and on the Closing Date, all federal, state and
local tax returns and tax reports required to be filed by Tek on or before the
date of this Agreement or the Closing Date, as the case may be, have been and
will have been timely filed with the appropriate governmental agencies in all
jurisdictions in which such returns and reports are required to be filed; (ii)
all federal, state and local income, franchise, sales, use, property, excise and
other taxes (including interest and penalties and including estimated tax
installments where required to be filed and paid) due from or with respect to
Tek as of the date hereof and as of the Closing Date have been and will have
been fully paid, and appropriate accruals shall have been made on the Tek's
books for taxes not yet due and payable; (iii) as of the Closing Date, all taxes
and other assessments and levies which Tek is required by law to withhold or to
collect on or before the Closing Date will have been duly withheld and
collected, and will have been paid over to the proper governmental authorities
to the extent due and payable on or before the Closing Date; and (iv) there are
no outstanding or pending material claims, deficiencies or assessments for
taxes, interest or penalties with respect to any taxable period of Tek. At and
after the Closing Date,
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Tek will have no material liability for any federal, state or local income tax
with respect to any taxable period ending on or before the Closing Date, except
as and to the extent disclosed in Schedule 3.13.
(b) There are no audits pending with respect to any federal, state or
local tax returns of Tek, and no waivers of statutes of limitations have been
given or requested with respect to any tax years or tax filings of Tek.
3.14. Permits and Licenses. Tek possesses all permits, licenses and/or
franchises, from whatever governmental authorities or agencies (domestic and/or
foreign) requiring the same and having jurisdiction over Tek, which are
necessary in order to operate its business in the manner presently conducted,
all of which permits, licenses and/or franchises are valid, current and in full
force and effect; and none of such permits, licenses or franchises will be
voided, revoked or terminated, or voidable, revocable or terminable, upon and by
reason of the Merger.
3.15. Labor, Benefit and Employment Agreements.
(a) Except as set forth in Schedule 3.15 annexed hereto, Tek is not a
party to (i) any collective bargaining agreement or other labor agreement, or
(ii) any agreement with respect to the employment or compensation of
employee(s). No union is now certified or, to the best of the knowledge of Tek,
claims to be certified as a collective bargaining agent to represent any
employees of Tek or the Company, and there are no labor disputes existing or, to
the best of the knowledge of Tek, threatened, involving strikes, slowdowns, work
stoppages, job actions or lockouts of any employees of Tek.
(b) Except as set forth on Schedule 3.15, there are no unfair labor
practice charges or petitions for election pending or being litigated before the
National Labor Relations Board or any other federal or state labor commission
relating to any employees of Tek. Tek has not received any written notice of any
actual or alleged violation of any law, regulation, order or contract term
affecting the collective bargaining rights of employees, equal opportunities in
employment, or employee health, safety, welfare, or wages and hours.
(c) Tek has never at any time been required to make contributions to
any "multiemployer plan" (as defined in Section 3(37) of ERISA.
(d) Except as disclosed on Schedule 3.15, Tek does not maintain or have
any liabilities or obligations of any kind with respect to, any bonus, deferred
compensation, pension, profit sharing, retirement or other such benefit plan,
and does not have any potential or contingent liability in respect of any
actions or transactions relating to any such plan other than to make
contributions thereto if, as and when due in respect of periods subsequent to
the date hereof.
(e) Except for the group insurance programs listed in Schedule 3.15,
Tek does not maintain any medical, health, life or other employee benefit
insurance programs or any welfare plans (within the meaning of Section 3(1) of
ERISA) for the benefit of any current or former employees, and, except as
required by law, Tek has no liability, fixed or contingent, for health or
medical benefits to any former employee.
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3.16. No Breach of Statute, Decree or Other Instrument. Except as set
forth in Schedule 3.16 annexed hereto: (i) neither the execution and delivery of
this Agreement by Tek, nor the performance of or compliance with the terms and
provisions of this Agreement on the part of Tek, will violate or conflict with
any term of the Articles of Incorporation or By-Laws of Tek or any statute, law,
rule, regulation, executive order, decree, injunction or other order (whether
temporary, preliminary or permanent) of any governmental authority which is in
effect and affects the existing business of Tek, or will at the Closing Date
conflict with, result in a breach of, or constitute a default under, any of the
terms, conditions or provisions of any judgment, order, award, injunction,
decree, contract, lease, agreement, indenture or other instrument to which Tek
is a party or by which Tek is bound; (ii) no consent, authorization, order or
approval of or filing with any governmental authority or agency (other than
filings under federal and state securities laws), or any third party, will be
required on the part Tek in connection with the consummation of the Merger and
the other transactions contemplated hereby; and (iii) Tek will not be required,
whether by law, regulation or administrative practice, to reapply for or refile
to obtain any of the licenses, permits or other authorizations presently held by
Tek and required for the operation of its business as conducted on the date
hereof in connection with the consummation of the Merger and the other
transactions contemplated hereby.
3.17. Compliance with Laws.
(a) Except as set forth on Schedule 3.17, to the best knowledge of Tek,
it has not, at any time since its inception, (i) handled, stored, generated,
processed or disposed of any hazardous substances in violation of any federal,
state or local environmental laws or regulations, (ii) otherwise committed any
material violation of any federal, state or local environmental laws or
regulations (including, without limitation, the provisions of the Environmental
Protection Act and other applicable environmental statutes and regulations) or
any material violation of the Occupational Safety and Health Act, or (iii) been
in material violation of any requirements of its insurance carriers from time to
time.
(b) Except as set forth on Schedule 3.17 annexed hereto, neither Tek
nor any of its current officers has received any written notice of default or
violation, nor, to the best knowledge of Tek, is it in default or violation,
with respect to any judgment, order, writ, injunction, decree, demand or
assessment issued by any court or any federal, state, local, municipal or other
governmental agency, board, commission, bureau, instrumentality or department,
domestic or foreign, relating to any aspect of Tek's business, affairs,
properties or assets. Neither Tek nor any of its current officers has received
written notice of, been charged with, or is under investigation with respect to,
any violation of any provision of any federal, state, local, municipal or other
law or administrative rule or regulation, domestic or foreign, relating to any
aspect of Tek's business, affairs, properties or assets, which violation would
have a material adverse effect on Tek, its business or any material portion of
its assets.
Schedule 3.17 sets forth the date(s) of the last known audits or inspections (if
any) of Tek conducted by or on behalf of the Environmental Protection Agency,
the Occupational Safety and Health Administration, and any other governmental
and/or quasi-governmental agency (federal, state and/or local).
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3.18. Litigation. Except as disclosed in Schedule 3.18 annexed hereto,
there is no suit, action, arbitration, or legal, administrative or other
proceeding, or governmental investigation (including, without limitation, any
claim alleging the invalidity, infringement or interference of any patent,
patent application, or rights thereunder owned or licensed by Tek) pending, or
to the best knowledge of Tek, threatened, by or against it or any of its assets
or properties.
3.19. Schedules Incorporated by Reference. The making of any recitation
in any Schedule hereto shall be deemed to constitute a representation and
warranty that such recitation is an accurate statement and disclosure of the
information required by the corresponding Section(s) of this Agreement, as, to
the extent, and subject to the qualifications and limitations, set forth in such
corresponding Section(s).
4. THE COMPANY'S OBLIGATIONS BEFORE THE CLOSING DATE.
The Company covenants and agrees that, from the date hereof until the
Closing Date:
4.1. Access to Information. The Company shall permit Tek and its
counsel, accountants and other representatives, upon reasonable advance notice
to the Company, during normal business hours and without undue disruption of the
business of the Company, to have reasonable access to all properties, books,
accounts, records, contracts, documents and information relating to the Company.
Tek and its representatives shall also be permitted to consult freely with the
Company's counsel concerning the business of the Company.
4.2. Maintenance of Insurance. The Company shall continue to carry its
existing insurance, to the extent obtainable upon reasonable terms.
4.3. Corporate Matters. The Company shall not, without the prior
written consent of Tek:
(a) amend its Articles of Incorporation or By-Laws;
(b) issue any shares of the Company's capital stock;
(c) issue or create any warrants, obligations, subscriptions, options,
convertible securities or other commitments under which any additional shares of
the Company's capital stock might be directly or indirectly issued;
(d) amend, cancel or modify any existing Material Contract or enter
into any new agreement, commitment or transaction, whether or not such revision
is material;
(e) pay, grant or authorize any salary increases or bonuses or enter
into any employment, consulting or management agreements;
(f) modify any agreement other than a Material Contract to which the
Company is a party or by which it may be bound, or modify any payment terms with
any
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creditor, other than in the ordinary course of business; provided, that no
modifications, whether or not in the ordinary course of business, shall be made
to any Material Contract;
(g) make any change in the Company's management personnel;
(h) except pursuant to commitments in effect on the date hereof (to the
extent disclosed in this Agreement or in any Schedule hereto), make any capital
expenditure(s) or commitment(s), whether by means of purchase, lease or
otherwise, or any operating lease commitment(s), in excess of $5,000 in the
aggregate;
(i) sell, assign or dispose of any capital asset(s) with a net book
value in excess of $5,000 as to any one item;
(j) change its method of collection of accounts or notes receivable,
accelerate or slow its payment of accounts payable, or prepay any of its
obligations or liabilities, other than prepayments to take advantage of trade
discounts not otherwise inconsistent with or in excess of historical prepayment
practices;
(k) declare, pay, set aside or make any dividend(s) or other
distribution(s) of cash or other property, or redeem any outstanding shares of
the Company's capital stock;
(l) incur any liability or indebtedness in excess of $5,000 as to any
one item or $25,000 in the aggregate;
(m) voluntarily subject any of the assets or properties of the Company
to any further liens or encumbrances;
(n) forgive any liability or indebtedness owed to the Company by any of
its stockholders or any of their respective Affiliates; or
(o) agree to do, or take any action in furtherance of, any of the
foregoing.
5. ADDITIONAL AGREEMENTS OF THE PARTIES.
5.1. Confidentiality. Notwithstanding anything to the contrary
contained in this Agreement, and subject only to any disclosure requirements
which may be imposed upon Mergerco or Tek under applicable state or federal
securities or antitrust laws, as to which the Company shall be given reasonable
advance notice, it is expressly understood and agreed by Mergerco and Tek that
(i) this Agreement, the Schedules hereto, and the conversations, negotiations
and transactions relating hereto and/or contemplated hereby, and (ii) all
financial information, business records and other non-public information
concerning the Company which Mergerco, Tek or their representatives have
received or may hereafter receive, shall be maintained in the strictest
confidence by Mergerco, Tek and their representatives, and shall not be
disclosed to any person that is not associated or affiliated with Mergerco or
Tek and involved in the transactions contemplated hereby or used for any purpose
other than the transaction contemplated hereby, without the prior written
approval of the Company. The parties hereto shall use their best efforts to
avoid disclosure of any of the foregoing or undue disruption of any of the
business operations or personnel of the Company. In the event that the
transactions
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contemplated hereby shall not be consummated for any reason, Mergerco and Tek
covenant and agree that neither they nor their representatives shall retain any
computer files and other electronic media, documents, lists or other writings of
the Company which they may have received or obtained in connection herewith or
any documents incorporating any of the information contained in any of the same
(all of which, and all copies thereof in the possession or control of Mergerco,
Tek or their representatives, shall be returned to the Company).
5.2. No Solicitation. (a) From and after the date of this Agreement
until the earlier of the effective time of the Merger or termination of this
Agreement pursuant to Section 9 hereof, the Company and the Stockholders shall
not, and the Company will instruct its directors, officers, employees,
representatives, investment bankers, agents and affiliates (including any
subsidiaries) not to, directly or indirectly, (i) initiate, solicit, encourage,
negotiate or accept the making, submission or announcement of, any Acquisition
Proposal (as defined below) by any person, entity or group (other than Tek and
its Affiliates, agents and representatives), or (ii) participate in any
discussions or negotiations with, or disclose any non-public information
concerning the Company to, or afford any access to the properties, books or
records of the Company to, or otherwise assist or facilitate, or enter into any
agreement or understanding with, any person, entity or group (other than Tek and
its Affiliates, agents and representatives), in connection with any Acquisition
Proposal with respect to the Company. Without limiting the generality of the
foregoing, the Company acknowledges and agrees that any violation of any of the
restrictions set forth in the preceding sentence by any director or officer of
the Company, or by any employee, representative, investment banker, agent or
affiliate of the Company having direct or indirect authority from the Company or
any director or officer of the Company, shall be deemed to constitute a breach
of this Section 5.2(a) by the Company. For the purposes of this Agreement, an
"Acquisition Proposal" with respect to an entity means any proposal, inquiry or
offer relating to or which the entity has reason to believe relates to (i) any
merger, consolidation, combination, sale, dividend or other disposition of
substantial assets or properties or similar transactions or series of
transactions involving the entity or any subsidiaries of the entity, or (ii) any
public announcement of a proposal, plan or intention to do any of the foregoing
or any agreement to engage in any of the foregoing. As of the date hereof, the
Company will immediately cease and cause to be terminated any and all existing
activities, discussions or negotiations with any parties with respect to any
Acquisition Proposal. The Company will (i) notify Tek as promptly as practicable
if it receives any proposal or inquiry or request for the Company in connection
with an Acquisition Proposal or potential Acquisition Proposal and (ii) as
promptly as practicable deliver to Tek a copy of such proposal, inquiry or
request if it is in written form, as well as the identity of the third party
submitting such Acquisition Proposal. In addition, subject to the other
provisions of this Section 5.2, from and after the date of this Agreement, until
the Termination Date, the Company and the Stockholders will not, and the Company
will instruct its directors, officers, employees, representatives, investment
bankers, agents and affiliates (including any subsidiaries) not to, directly or
indirectly, make or authorize any public statement, recommendation or
solicitation in support of any Acquisition Proposal made by any person, entity
or group (other than Tek).
(b) Notwithstanding the foregoing provisions of paragraph (a), the
Company's Board of Directors, prior to the Closing Date, after consultation with
outside legal counsel, shall be free to take any action or authorize the taking
of any action with respect to unsolicited inquiries, proposals or offers
received by the Company after the date hereof with respect to an
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unsolicited bona fide Acquisition Proposal, which the Board of Directors of the
Company in its good faith reasonable judgment determines, after consultation
with its independent financial advisors, would be reasonably likely to result in
a transaction financially more favorable than the Merger to the Stockholders
including, without limitation, responding thereto and providing information to
third parties in connection therewith, as may be required in the exercise of
their fiduciary duties under applicable law to the Company or the Stockholders.
(c) From and after the date of this Agreement until the earlier of the
effective time of the Merger or termination of this Agreement pursuant to
Section 9 hereof, Tek shall not, and will instruct its directors, officers,
employees, representatives, investment bankers, agents and affiliates (including
any subsidiaries) not to, directly or indirectly, (i) initiate, solicit,
encourage, negotiate or accept the making, submission or announcement of, any
Acquisition Proposal by any person, entity or group (other than the Company, the
Stockholders and their Affiliates, agents and representatives), or (ii)
participate in any discussions or negotiations with, or disclose any non-public
information concerning Tek to, or afford any access to the properties, books or
records of Tek to, or otherwise assist or facilitate, or enter into any
agreement or understanding with, any person, entity or group (other than the
Company and the Stockholders and their Affiliates, agents and representatives),
in connection with any Acquisition Proposal with respect to Tek's acquisition of
an entity that conducts a business that is similar, in every material way, to
the business conducted by the Company on the date of this Agreement (a "Tek
Acquisition Proposal"). Without limiting the generality of the foregoing, Tek
acknowledges and agrees that any violation of any of the restrictions set forth
in the preceding sentence by any director or officer of TEK, or by any employee,
representative, investment banker, agent or affiliate of TEK having direct or
indirect authority from the Company or any director or officer of TEK, shall be
deemed to constitute a breach of this Section 5.2(c) by Tek. As of the date
hereof, Tek will immediately cease and cause to be terminated any and all
existing activities, discussions or negotiations with any parties with respect
to any Tek Acquisition Proposal. TEK will (i) notify the Company as promptly as
practicable if it receives any proposal or inquiry or request for the Company in
connection with a Tek Acquisition Proposal or potential Tek Acquisition Proposal
and (ii) as promptly as practicable deliver to the Company a copy of such
proposal, inquiry or request if it is in written form, as well as the identity
of the third party submitting such Tek Acquisition Proposal. In addition,
subject to the other provisions of this Section 5.2(c), from and after the date
of this Agreement, until the Termination Date, Tek will not, and will instruct
its directors, officers, employees, representatives, investment bankers, agents
and affiliates (including any subsidiaries) not to, directly or indirectly, make
or authorize any public statement, recommendation or solicitation in support of
any such Tek Acquisition Proposal made by any person, entity or group (other
than the Company).
5.3. Non-Competition, Confidentiality and Assignment of Inventions
Agreement;; and Employment Agreement. (a) On the Closing Date, each key employee
or independent contractor to the Company who is to be employed or engaged by
Mergerco and/or Tek upon completion of the Merger who are listed on Schedule 5.3
shall execute and deliver to Tek and the Surviving Corporation a
non-competition, confidentiality and assignment of inventions agreement,
containing non-competition provisions, in substantially the form of Exhibit B
annexed hereto (the "Non-Competition Agreement").
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(b) On the Closing Date, the Surviving Corporation and Tager shall
execute and deliver to Tek an employment agreement in substantially the form of
Exhibit C annexed hereto (the "Employment Agreement").
5.4. Public Disclosure. (a) Prior to the Closing Date, the Company and
Tek will consult and mutually agree with each other before issuing any press
release or otherwise making any public statement with respect to the Merger or
this Agreement and will not issue any such press release or make any such public
statement prior to such consultation and agreement, except as may be required by
law or any listing agreement with a national securities exchange or the Nasdaq
Stock Market.
(b) The Company will notify Tek, and Tek will notify the Company,
before issuing any press release or otherwise making any public statement with
respect to an Acquisition Proposal or Tek Acquisition Proposal, respectively.
5.5. Additional Agreements and Instruments. On or before the Closing
Date, the Company, the Stockholders, Mergerco and Tek shall execute, deliver and
file the Certificate of Merger and all exhibits, agreements, certificates,
instruments and other documents, not inconsistent with the provisions of this
Agreement, which, in the opinion of counsel to the parties hereto, shall
reasonably be required to be executed, delivered and filed in order to
consummate the Merger and the other transactions contemplated by this Agreement
and in order that Tek and Mergerco comply with all federal and state securities
laws.
5.6. Non-Interference. Neither Mergerco, Tek, the Company nor the
Stockholders shall cause to occur any act, event or condition which would cause
any of their respective representations and warranties made in this Agreement to
be or become untrue or incorrect in any material respect as of the Closing Date,
or would interfere with, frustrate or render unreasonably expensive the
satisfaction by the other party or parties of any of the conditions precedent
set forth in Sections 6 and 7 below.
5.7. Corporate Structure of the Surviving Corporation.
(a) The Surviving Corporation. Under the terms of the Employment
Agreement, Tager shall initially be President and Chief Executive Officer of the
Surviving Corporation. The full Board of Directors of the Surviving Corporation
on the Closing Date shall consist of Alexander Kalpaxis, Arion Kalpaxis and
Tager. The Company and Tager shall use all reasonable efforts to ensure that the
employees of the Company listed below, which Tek desires the Surviving
Corporation to hire or retain upon completion of the Merger (including the
filling of those positions specified below for which candidates have not yet
been identified), shall become employed or retained by Mergerco on the Closing
Date, and in the case of W. Todd Sims, no later than July 30, 2000:
1. W. Todd Sims, Chief Operating Officer
2. Melissa Fetzer, Senior Vice President - Application Development
3. Kris Eielson, Senior Application Developer
4. Noelle Canfield, Application Developer
5. RFP Respondent, To Be Filled
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6. Sales Manager, To Be Filled
7. Project Manager, To Be Filled
5.8. Nasdaq Listing. Within the first year after the Closing Date, Tek
agrees to authorize for listing on The Nasdaq SmallCap Market, the shares of Tek
Common Stock to be issued as Merger Closing Consideration, upon official notice
of issuance.
5.9. Holdings in Mergerco. On the Closing Date, the Stockholders (or
their respective designees) shall be issued an aggregate of 3.5% of the common
stock of Mergerco to be issued and outstanding as of such date or, if the
Stockholders so choose, they shall be granted options exercisable for 3.5% of
shares of the common stock of Mergerco issued and outstanding on the Closing
Date at an exercise price and on such other terms as shall be mutually agreed to
by Tek, Mergerco and the Stockholders. On the Closing Date, the Stockholders
shall enter into a stockholders agreement (the "Shareholders Agreement"), with
respect to rights and restrictions on transfers of shares of Mergerco common
stock following the Closing, in substantially the form of Exhibit D annexed
hereto.
6. CONDITIONS PRECEDENT TO MERGERCO AND TEK'S PERFORMANCES.
In addition to the fulfillment of the parties' agreements in Section 5
above, the obligations of Mergerco to consummate the Merger and of Mergerco and
Tek to consummate the transactions contemplated by this Agreement are further
subject to the satisfaction, at or before the Closing Date, of all the following
conditions, any one or more of which may be waived in writing by Mergerco and
Tek:
6.1. Accuracy of Representations and Warranties. All representations
and warranties made by the Company and/or the Stockholders in this Agreement, in
any Schedule(s) hereto, and/or in any written statement delivered to Mergerco or
Tek under this Agreement, shall be true and correct in all material respects on
and as of the Closing Date as though such representations and warranties were
made on and as of that date.
6.2. Performance. The Company and the Stockholders shall have
performed, satisfied and complied with all covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with by them
on or before the Closing Date. -
6.3. Certification. Mergerco and Tek shall have received a certificate,
dated the Closing Date, signed by the Stockholders, certifying, in such detail
as Mergerco and Tek and their counsel may reasonably request, that the
conditions specified in Sections 6.1, 6.2, 6.8, 6.12, and 6.16 above and below
have been fulfilled.
6.4. Resolutions. Mergerco and Tek shall have received certified
resolutions of the Board of Directors and the stockholders of the Company in
form reasonably satisfactory to counsel for Mergerco and Tek authorizing the
Company's execution, delivery and performance of this Agreement and the Merger
and all actions to be taken by the Company hereunder, and shall have received
certified copies of the Certificate of Incorporation and By-laws of the Company.
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6.5. Termination of Employment Agreements. The Company shall have
delivered to Tek and Mergerco evidence, reasonably satisfactory to Tek and
Mergerco, of the termination and cancellation of any existing employment
agreements between the Company and Tager, and between the Company and any other
employees of the Company, as specified by Tek and Mergerco, on or prior to the
Closing Date.
6.6. Absence of Litigation. No action, suit or proceeding by or before
any court or any governmental body or authority, against the Company or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted on or before the Closing Date, which
action, suit or proceeding would, if determined adversely, have a material
adverse effect on the Company, its business or any material portion of its
assets, or impair the ability of any of the Stockholders to deliver in the
Merger all of his Stock free and clear of all pledges, liens, claims, charges,
options, calls, encumbrances, restrictions and assessments whatsoever (except
any restrictions which may be created by operation of state or federal
securities laws).
6.7. Consents. All necessary disclosures to and agreements and consents
of any parties to (a) any parties to any Material Contracts and/or any licensing
authorities which Tek is a party, and (b) any governmental authorities or
agencies to the extent required in connection with the transactions contemplated
by this Agreement, shall have been obtained in such form as is reasonably
satisfactory to counsel to Tek, and true and complete copies thereof delivered
to Tek and Mergerco.
6.8. Settlement of Accounts. All debts, liabilities and other monetary
obligations (if any) owed to the Company by any of the Stockholders or other
stockholders of the Company and/or any of their respective Affiliates shall have
been fully paid to the Company, such that no such debts, liabilities or
obligations shall be outstanding on the Closing Date.
6.9. Condition of Property. Between the date of this Agreement and the
Closing Date, assets of the Company having an aggregate fair market value of
$10,000 or more shall not have been lost, destroyed or irreparably damaged by
fire, flood, explosion, theft or any other cause, if not fully covered by
insurance.
6.10. No Material Adverse Change. On the Closing Date, there shall not
have occurred any event or condition (including, without limitation, third party
claims) not disclosed on Schedules to this Agreement which, in the reasonable
opinion of Tek and its counsel, would materially and adversely affect the value
of the technologies, intellectual property, software, rights under Material
Contracts, and other assets owned, held or used by the Company.
6.11. Execution and Delivery of Exhibits. On or before the Closing
Date: (a) the Company shall have executed and delivered to Mergerco the
Certificate of Merger, substantially in the form of Exhibit A; (b) all employees
of the Company other than Tager being retained after the Closing shall have
executed and delivered to all other parties thereto the Non-Competition
Agreement (to which it is a party), substantially in the form annexed hereto as
Exhibit B; (c) each of the Stockholders shall have executed and delivered to all
other parties thereto the Shareholders Agreement, substantially in the form
annexed hereto as Exhibit D; (d) each stockholder of the Company receiving any
Merger Closing Consideration shall have
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executed and delivered to all other parties thereto the Subscription Agreement,
substantially in the form annexed hereto as Exhibit E; and (e) Tager shall have
executed and delivered to Tek and Mergerco the Employment Agreement,
substantially in the form annexed hereto as Exhibit C.
6.12. Stockholder Approval. The stockholders of the Company shall have
unanimously approved or ratified this Agreement, the consummation of the Merger
and all other transactions contemplated by this Agreement, all in accordance
with the applicable provisions of the DGCL and on or prior to the Closing Date.
6.13. Proceedings and Instruments Satisfactory. All proceedings,
corporate or other, to be taken in connection with the transactions contemplated
by this Agreement, and all documents incidental thereto, shall be reasonably
satisfactory in form and substance to Mergerco, Tek and their counsel. The
Company shall have submitted to Tek or its representatives for examination the
originals or true and correct copies of all records and documents relating to
the business and affairs of the Company which Tek may have requested in
connection with said transactions.
6.14. Due Diligence. Mergerco and Tek shall be satisfied, in their sole
discretion, with the results of their due diligence investigation of the Company
and its business including, but not limited to, investigation of its
technologies (both proprietary and those licensed from third parties), its
existing web design and other services currently marketed, its proposed services
and products, and the marketability and size of the markets for all such
services and products.
6.15. Opinion of Counsel. Mergerco and Tek shall receive an opinion of
counsel from counsel to the Company and counsel to the Stockholders, which
counsel shall be reasonably satisfactory to Mergerco and Tek, substantially in
such form as set forth on Exhibit F annexed hereto.
6.16. Evidence of Compliance with Section 2.23. Each of Mergerco and
Tek shall receive evidence satisfactory to it and its counsel that none of (i)
the Company, (ii) any individual Stockholder, (iii) the Stockholders taken
together, or (iv) the Company and the Stockholders, taken together, either
individually or in the aggregate, own of record or beneficially (as determined
in accordance with the definitions provided under Regulation 13d-3 promulgated
under the Exchange Act) an amount equal to or greater than the Percentage of the
outstanding Tek Common Stock on the date of this Agreement and on the Closing
Date.
7. CONDITIONS PRECEDENT TO THE COMPANY AND THE STOCKHOLDERS'
PERFORMANCES.
In addition to the fulfillment of the parties' agreements in Section 5
above, the obligations of the Company to consummate the Merger and of the
Stockholders to consummate the transactions contemplated by this Agreement are
further subject to the satisfaction, at or before the Closing Date, of all of
the following conditions, any one or more of which may be waived in writing by
the Company and the Stockholders:
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7.1. Accuracy of Representations and Warranties. All representations
and warranties made by Mergerco and Tek in this Agreement, in any Schedule(s)
hereto and/or in any written statement delivered to the Company and/or the
Stockholders under this Agreement shall be true and correct in all material
respects on and as of the Closing Date as though such representations and
warranties were made on and as of that date.
7.2. Performance. Mergerco and Tek shall have performed, satisfied and
complied with all covenants, agreements and conditions required by this
Agreement to be performed, satisfied or complied with by Mergerco and/or TEK on
or before the Closing Date.
7.3. Certification. The Stockholders and the Company shall have
received a certificate, dated the Closing Date, signed by Mergerco and Tek,
certifying, in such detail as the Stockholders and their counsel may reasonably
request, that the conditions specified in Sections 7.1 and 7.2 above have been
fulfilled.
7.4. Resolutions. The Stockholders and the Company shall have received
certified resolutions of the Board of Directors and sole stockholder of Mergerco
and of the Board of Directors of Tek, in form reasonably satisfactory to counsel
for the Stockholders and the Company, authorizing the Merger and Mergerco and
Tek's execution, delivery and performance of this Agreement and all actions to
be taken by Mergerco and Tek hereunder, and shall have received certified copies
of the Certificate of Incorporation, as amended, and By-laws of each of Tek and
Mergerco.
7.5. Absence of Litigation. No action, suit or proceeding by or before
any court or any governmental body or authority, against Tek or Mergerco or
pertaining to the transactions contemplated by this Agreement or their
consummation, shall have been instituted on or before the Closing Date, which
action, suit or proceeding would, if determined adversely, have a material
adverse effect on Tek or Mergerco, its or their business or any material portion
of its or their assets, or impair the ability of Tek or Mergerco to deliver in
the Merger all of the Merger Closing Consideration and the Earn-out Merger
Consideration free and clear of all pledges, liens, claims, charges, options,
calls, encumbrances, restrictions and assessments whatsoever (except any
restrictions which may be created by operation of state or federal securities
laws).
7.6. Consents. All necessary disclosures to and agreements and consents
of any parties to any material agreements to which Tek is a party, and any
governmental authorities or agencies to the extent required in connection with
the transactions contemplated by this Agreement, shall have been obtained in
such form as is reasonably satisfactory to counsel to the Company and the
Stockholders, and true and complete copies thereof delivered to the Company and
the Stockholders.
7.7. No Material Adverse Change. On the Closing Date, there shall not
have occurred any event or condition (including, without limitation, third party
claims) not disclosed on Schedules to this Agreement which, in the reasonable
opinion of the Company, the Stockholders and their counsel, would materially and
adversely affect the business of Tek.
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7.8. Execution and Delivery of Exhibits. On or before the Closing Date:
(a) Mergerco shall have executed and delivered to the Company the Certificate of
Merger, substantially in the form of Exhibit A; and (b) Tek and/or Mergerco (as
applicable) shall have executed and delivered to all other parties thereto the
Non-Competition Agreement (to which it is a party), substantially in the form
annexed hereto as Exhibit B; the Shareholders Agreement, substantially in the
form annexed hereto as Exhibit D; the Subscription Agreement, substantially in
the form annexed hereto as Exhibit E; and the Tager Employment Agreement,
substantially in the form annexed hereto as Exhibit C.
7.9. Approvals. The Board of Directors of each of Tek and Mergerco, and
Tek as the sole shareholder of Mergerco, shall have unanimously approved or
ratified this Agreement, the consummation of the Merger and all other
transactions contemplated by this Agreement, all in accordance with the
applicable provisions of the DGCL and on or prior to the Closing Date.
7.10. Delivery of Merger Consideration. Tek and Mergerco shall have
delivered to the Stockholders stock certificates evidencing the Tek Common
Stock, in amounts representing their allocable shares of the Closing Merger
Consideration described in Section 2 of this Agreement.
7.11. Proceedings and Instruments Satisfactory. All proceedings to be
taken in connection with the transactions contemplated by this Agreement, and
all documents incidental thereto, shall be reasonably satisfactory in form and
substance to the Company, the Stockholders and their counsel.
7.12. Opinion of Counsel. The Company and the Stockholders shall
receive an opinion of counsel from counsel to Mergerco and Tek substantially in
such form as set forth on Exhibit G annexed hereto.
8. CLOSING.
8.1. Place and Date of Closing. Unless this Agreement shall be
terminated pursuant to Section 9 below, the consummation of the transactions
contemplated by this Agreement (the "Closing") shall take place in New York, New
York at the offices of Nixon Peabody, counsel to Mergerco and Tek, located at
437 Madison Avenue, 24th Floor, New York, New York 10022, or such other location
as is agreed to between the parties, at 10:00 a.m. local time on a date which
shall be not more than five business days following notice by Tek that it is
ready to close (the "Closing Date"); provided, that in no event shall such
Closing Date, the Closing and consummation of the Merger, occur later than May
17, 2000 (the "Outside Closing Date"), unless approved in writing by the
Company, Tek and Mergerco. The effectiveness of the Merger shall occur on the
Closing Date simultaneous with the Closing.
8.2. Actions at Closing. On the Closing Date, simultaneous with the
Closing, Mergerco and the Company shall file or cause to be filed the
Certificate of Merger with the Secretary of State of the State of Delaware. At
such Closing, there shall be made, by all necessary and appropriate persons, all
payments and deliveries stated in this Agreement to be made at the Closing
and/or on or prior to the Closing Date.
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9. TERMINATION OF AGREEMENT.
9.1. General. This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing: (a) by
the mutual written consent of the Company, the Stockholders, Mergerco and Tek;
(b) by Mergerco and Tek, on one hand, or by the Company and the Stockholders, on
the other hand, if: (i) a material breach shall exist with respect to the
written representations and warranties made by the other party or parties, as
the case may be, (ii) the other party or parties, as the case may be, shall take
any action prohibited by this Agreement, if such actions shall or may have a
material adverse effect on the Company and/or the transactions contemplated
hereby, (iii) the other party or parties, as the case may be, shall not have
furnished, upon reasonable notice therefor, such certificates and documents
required in connection with the transactions contemplated hereby and matters
incidental thereto as it or they shall have agreed to furnish, and it is
reasonably unlikely that the other party or parties will be able to furnish such
item(s) prior to the Outside Closing Date, (iv) any consent of any third party
to the transactions contemplated hereby (whether or not the necessity of which
is disclosed herein or in any Schedule hereto) is reasonably necessary to
prevent a default under any outstanding material obligation of Mergerco or Tek,
on one hand, and the Stockholders or the Company, on the other hand, and such
consent is not obtainable without material cost or penalty (unless the party or
parties not seeking to terminate this Agreement agrees or agree to pay such cost
or penalty), or (v) if the Market Average Price is less than $3.00 per share on
the Closing Date; provided, however, that in the event a party to the Agreement
or any of its Affiliates has engaged in short selling of Tek Common Stock, or
has engaged in any means of market manipulation with respect to Tek Common
Stock, in either case (i) at any time following the date of execution of the
Merger Agreement and (ii) with the intent of causing a reduction in the market
price of Tek Common Stock, then such short selling or manipulating party
forfeits its ability to terminate this Agreement on the grounds that the Merger
Average Price is less than $3.00 per share; or (c) by Mergerco and Tek on the
one hand, or the Company and all Stockholders, on the other hand, at any time on
or after May 17, 2000 (the Outside Closing Date), if the transactions
contemplated hereby shall not have been consummated prior thereto, and the party
directing termination shall not then be in breach or default of any obligations
imposed upon such party by this Agreement.
9.2. Notice of Termination.
In the event of termination of this Agreement pursuant to this Section
9, prompt written notice shall be given by the terminating party or parties to
the other party or parties.
9.3. Termination Fees.
(a) If this Agreement is terminated by Tek because of the taking of
action by the Company and the Stockholders prohibited by the terms of Section
5.2(a), with the result that the Company and the Stockholders do not complete
the Merger contemplated by this Agreement by the Outside Closing Date, then the
Company and the Stockholders shall be obligated to pay to Tek within fifteen
(15) days after the Outside Closing Date liquidated damages of $125,000.
(b) If this Agreement is terminated by the Company and the Stockholders
because of the taking of action by Tek prohibited by the terms of Section
5.2(c), with the result
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that Tek does not complete the Merger contemplated by this Agreement by the
Outside Closing Date, then Tek shall be obligated to pay to the Company within
fifteen (15) days after the Outside Closing Date liquidated damages of $125,000.
10. INDEMNIFICATION.
10.1. General.
(a) By the Company and the Stockholders. From and after the Closing
Date the Stockholders shall, jointly and severally, defend, indemnify and hold
harmless the Surviving Corporation and Tek from, against and in respect of any
and all claims, losses, costs, expenses, obligations, liabilities, damages,
recoveries and deficiencies, including interest, penalties and reasonable
attorneys' fees, that the Surviving Corporation or Tek (collectively, the "Tek
Group") may incur, sustain or suffer ("Tek Group Losses") as a result of any
breach of, or failure by the Company or such Stockholder(s) to perform, any of
the representations, warranties, covenants or agreements of the Company or
Stockholders contained in this Agreement or any Schedule(s) furnished by or on
behalf of the Company or Stockholders under this Agreement.
(b) By the Tek Group. From and after the Closing Date, each member of
the Tek Group shall jointly and severally indemnify, defend and hold harmless
the Stockholders from, against and in respect of any and all claims, losses,
costs, expenses, obligations, liabilities, damages, recoveries and deficiencies,
including interest, penalties and reasonable attorneys' fees, that such person
may incur, sustain or suffer ("Stockholder Losses") as a result of (i) any
breach of, or failure by Mergerco or Tek to perform, any of the representations,
warranties, covenants or agreements of Mergerco or Tek contained in this
Agreement or any Schedule(s) furnished by or on behalf of Mergerco or Tek under
this Agreement, (ii) a claim of a third-party with respect to the Company
regardless of when such Stockholder Loss arose or may arise (including before,
on or after the Closing Date) and regardless of by whom or when such Stockholder
Losses are asserted, except to the extent, and by the amount, that the
Stockholders would have at anytime been obligated to indemnify the Tek Group
pursuant to Section 10.1(a) hereof, as a result of the basis of such third-party
claim; and (iii) subject to the limitations provided by clause (ii) hereof and
of Delaware law, the fact that a Stockholder was a director, officer, agent or
employee of the Company, regardless of when such Stockholder Loss arose or arise
(including before, on or after the Closing Date) and regardless of by whom such
Stockholder Losses are asserted, except to the extent that such Stockholder is
found, by a final, non-appealable order of a court of competent jurisdiction ,
to have acted, or omitted to take action, which act or omission is determined to
have constituted actual fraud or gross negligence or other willful misconduct.
10.2. Limitation on Indemnity.
(a) Time Limitation on Indemnity for Breach of Representation and
Warranty. The Tek Group shall be entitled to indemnification by the Stockholders
for Tek Group Losses relating to: (i) breach of any representation or warranty
hereunder by the Company and the Stockholders only in respect of claims for
which notice of claim shall have been given to the Stockholder on or before the
second anniversary of the Closing Date, or (ii) with respect to
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Losses relating to a breach of any representations or warranties under Section
2.8 above, the expiration of the final statute of limitations for those tax
returns covered by the warranties under Section 2.8 above. The Stockholders
shall be entitled to indemnification by the Tek Group for Stockholder Losses
relating to breach of any representation or warranty hereunder by Mergerco and
Tek or in respect of any claim made under Section 10.1(b)(ii) or (iii), only in
respect of claims for which notice of claim shall have been given to the Tek
Group on or before the second anniversary of the Closing Date.
(b) Prejudice of Rights to Defend. No member of the Tek Group or any
Stockholder shall be entitled to indemnification in the event that the subject
claim for indemnification relates to a third-party claim and the Tek Group or
any Stockholder, respectively, delayed giving notice thereof to the indemnifying
party to such an extent as to cause material prejudice to the defense of such
third-party claim.
10.3. Claims for Indemnity. Whenever a claim shall arise for which any
party shall be entitled to indemnification hereunder, the indemnified party
shall notify the indemnifying party in writing within thirty (30) days of the
indemnified party's first receipt of notice of, or the indemnified party's
obtaining actual knowledge of, such claim, and in any event within such shorter
period as may be necessary for the indemnifying party or parties to take
appropriate action to resist such claim. Such notice shall specify all facts
known to the indemnified party giving rise to such indemnity rights and shall
estimate (to the extent reasonably possible) the amount of potential liability
arising therefrom. If the indemnifying party shall be duly notified of such
dispute, the parties shall attempt to settle and compromise the same or may
agree to submit the same to arbitration or, if unable or unwilling to do any of
the foregoing, such dispute shall be settled by appropriate litigation, and any
rights of indemnification established by reason of such settlement, compromise,
arbitration or litigation shall promptly thereafter be paid and satisfied by
those indemnifying parties obligated to make indemnification hereunder.
10.4. Right to Defend. If the facts giving rise to any claim for
indemnification shall involve any actual or threatened action or demand by any
third party against the indemnified party or any of its Affiliates, the
indemnifying party or parties shall be entitled (without prejudice to the
indemnified party's right to participate at its own expense through counsel of
its own choosing), at their expense and through a single counsel of their own
choosing, to defend or prosecute such claim in the name of the indemnifying
party or parties, or any of them, or if necessary, in the name of the
indemnified party In any event, the indemnified party shall give the
indemnifying party advance written notice of any proposed compromise or
settlement of any such claim; provided, however, that no obligation, restriction
or Tek Group Loss or Stockholder Loss (as applicable) not paid or satisfied
entirely by the indemnifying party shall be imposed on the indemnified party
without its prior written consent. If the remedy sought in any such action or
demand is solely money damages, the indemnifying party shall have fifteen (15)
days after receipt of such notice of settlement to object to the proposed
compromise or settlement, and if it does so object, the indemnifying party shall
be required to undertake, conduct and control, though counsel of its own
choosing and at its sole expense, the settlement or defense thereof, and the
indemnified party shall cooperate with the indemnifying party in connection
therewith; if the remedy sought is other than one for solely money damages, the
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<PAGE>
indemnifying party shall not resolve such claim on behalf of itself and the
indemnified party over the reasonable objection of the indemnified party.
10.5. Non-Exclusive Remedy. The indemnifications provided in this
Agreement shall not be the sole and exclusive remedy of the parties hereto and
in no event shall these indemnification provisions limit any party's remedies
for specific performance, injunctive relief or any other equitable remedy
otherwise available to such party.
11. FINDER'S OR BROKER'S FEES.
Excepting any finder's fees owed to John L. Hawes, Jr. by Kyle M. Tager
in connection with the Merger under a Letter of Intent Regarding Finder's Fee,
dated as of July 15, 1999, each of Mergerco and Tek (on the one hand) and the
Company and the Stockholders (on the other hand) represent and warrant that
neither they nor any of their respective Affiliates have dealt with any broker
or finder in connection with any of the transactions contemplated by this
Agreement, and no broker or other person is entitled to any commission or
finder's fee in connection with any of these transactions.
12. FORM OF AGREEMENT.
12.1. Effect of Headings. The Section headings used in this Agreement
and the titles of the Schedules hereto are included for purposes of convenience
only, and shall not affect the construction or interpretation of any of the
provisions hereof or of the information set forth in such Schedules.
12.2. Entire Agreement; Waivers. This Agreement constitutes the entire
agreement between the parties pertaining to the subject matter hereof, and
supersedes all prior agreements or understandings as to such subject matter. No
party hereto has made any representation or warranty or given any covenant to
the other except as set forth in this Agreement and the Schedules and Exhibits
hereto. No waiver of any of the provisions of this Agreement shall be deemed, or
shall constitute, a waiver of any other provisions, whether or not similar, nor
shall any waiver constitute a continuing waiver. No waiver shall be binding
unless executed in writing by the party making the waiver.
12.3. Counterparts. This Agreement may be executed simultaneously in
any number of counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
12.4. Confidentiality. Tek, the Company and each of the Stockholders
agree and acknowledge that in connection with Tek's due diligence investigation
of the Company, and the further negotiations to be conducted between the parties
regarding the terms of the proposed Merger, each of the parties will receive
confidential information of the other party. Tek, each of the Stockholders and
the Company do hereby agree to maintain, and to cause their representatives to
maintain, such information as confidential; and except as may be necessary to
protect the legal rights of a party in litigation if the proposed Merger is not
consummated, each party shall not divulge the confidential information of the
other party. In the event that the Merger is not consummated, each of the
parties agrees to return to the other party all confidential
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<PAGE>
information of the other party then in the receiving party's possession. The
obligation of confidentiality created herein shall not apply to information
which was known to a party prior to its disclosure hereunder, or which is, or
falls into the public domain (provided such did not fall into the public domain
through the unauthorized acts of a receiving party), or which a party is
required to disclose by law.
13. PARTIES.
13.1. Parties in Interest. Nothing in this Agreement, whether expressed
or implied, is intended to confer any rights or remedies under or by reason of
this Agreement on any persons other than the parties to it and their respective
heirs, executors, administrators, personal representatives, successors and
permitted assigns, nor is anything in this Agreement intended to relieve or
discharge the obligations or liability of any third persons to any party to this
Agreement, nor shall any provision give any third persons any right of
subrogation or action over or against any party to this Agreement.
13.2. Notices. All notices, requests, demands and other communications
under this Agreement shall be in writing and shall be deemed to have been duly
given on the date of service if served personally on the party to whom notice is
to be given, or on the third day after mailing if mailed to the party to whom
notice is to be given, by first class mail, registered or certified, postage
prepaid, and properly addressed as follows:
(a) If to the Company or the Stockholders:
Big Technologies, Inc.
236 Huntington Avenue, #215
Boston, MA 02115
Attention: Kyle M. Tager
Fax: (415) 740-8558
email: [email protected]
with a copy sent concurrently to:
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Attention: Sheldon I. Hirshon, Esq.
Andrew Lee, Esq.
Fax: (212) 969-2900
email: [email protected]
[email protected]
(b) If to Mergerco, the Surviving Corporation
or Tek:
TekInsight.Com, Inc.
5 Hanover Square
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<PAGE>
New York, NY 10004
Attention: Arion Kalpaxis
Fax: (212) 271-8083
email: [email protected]
with a copy sent concurrently to:
Nixon Peabody LLP
437 Madison Avenue,
New York, New York 10022
Attention: Peter W. Rothberg, Esq.
Fax: (212) 940-3111
email: [email protected]
or to such other address as any party shall have specified by notice in writing
given to all other parties.
14. MISCELLANEOUS.
14.1. Amendments and Modifications. No amendment or modification of
this Agreement or any Exhibit or Schedule hereto shall be valid unless made in
writing and signed by the party to be charged therewith.
14.2. Non-Assignability; Binding Effect. Neither this Agreement, nor
any of the rights or obligations of the parties hereunder, shall be assignable
by any party hereto without the prior written consent of all other parties
hereto. Otherwise, this Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors,
administrators, personal representatives, successors and permitted assigns.
14.3. Governing Law; Jurisdiction. This Agreement shall be construed
and interpreted and the rights granted herein governed in accordance with the
laws of the State of New York applicable to contracts made and to be performed
wholly within such state.
14.4. Definition. Whenever in this Agreement the phrase "to the
knowledge of" or "to the best knowledge of" is used, such person shall be held
to have made such investigation of the facts and circumstances, including but
not limited to communications with relevant employees, consultants or other
representatives as a reasonable person, given his/her relationship as a
stockholder to, or position with, the Company, Mergerco, or Tek, as applicable,
would be expected to make in order to be able to make the representations,
warranties or other statements made by such persons in this Agreement.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
TEKINSIGHT.COM, INC.
By:__________________________________________
Name:
Title:
BIG TECH ACQUISITION CORP.
By:__________________________________________
Name:
Title:
BIG TECHNOLOGIES, INC.
By:__________________________________________
Name:
Title:
THE PRINCIPAL STOCKHOLDERS:
_____________________________________________
Kyle M. Tager
_____________________________________________
Andrew L. Lee
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<PAGE>
EXHIBITS
A - Certificate of Merger
B - Form of Non-Competition Agreement
C - Form of Employment Agreement
D - Form of Stockholder Agreement
E - Form of Subscription Agreement
F - Opinion of Counsel to the Company and the Stockholders
G - Opinion of Counsel to Mergerco and Tek
Exhibit 10.1
SHAREHOLDERS AGREEMENT
THIS SHAREHOLDERS AGREEMENT (the "Agreement"), made as of the 17th day
of May, 2000, by and among Big Technologies, Inc, a Delaware corporation having
an address at 236 Huntington Avenue, #215, Boston 02115 (the "Company"),
TekInsight.Com, Inc., a Delaware corporation having an address at 5 Hanover
Square, 24th Floor, New York, NY 10004 ("Tek") and the shareholders listed on
Schedule I hereto and such other persons as sign counterparts to this Agreement
(the "Shareholders" and, individually, a "Shareholder").
WHEREAS, management of the Company believes that it is in the best
interests of the Company that this Agreement be executed by the parties hereto,
and the parties are willing to execute this Agreement and to be bound by the
provisions hereof.
NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, and in consideration of the mutual
promises set forth below, the parties hereto, intending to be legally bound,
agree as follows:
1. Definitions of Shares. As used in this Agreement, "Shares" shall
mean and include all shares of common stock of the Company, $.01 par value (the
"Common Stock"), together with any shares of Common Stock and other capital
stock of the Company acquired as a result of any conversion, stock split, stock
dividend, recapitalization or the like. For all purposes of this Agreement,
options and other securities convertible into or exchangeable or exercisable for
Common Stock shall be deemed to be equivalent to the number of shares of Common
Stock which they may be exercised or exchanged for or converted into, as of the
applicable date, with appropriate adjustments, to reflect applicable exercise
prices.
2. Voluntary Transfers; Term(a) . (a) Each Shareholder hereby agrees
that it will not sell, assign, encumber, transfer pursuant to any pledge, or
make any other disposition or transfer (each a "Transfer") of any Shares now or
hereafter owned by it unless all of the provisions of this Agreement that are
applicable to such Transfer have been complied with.
(b) This Agreement shall terminate upon, and shall not be applicable to
transactions occurring after, the closing by the Company of a Qualified Public
Offering (as defined in Section 3(b) hereof).
3. Prohibited and Permitted Transfers(a) . (a) From and after the date
hereof, except as permitted by Sections 3(a) and 3(b) hereof, no Shareholder
shall sell, assign, transfer, pledge, hypothecate, mortgage, encumber or dispose
of all or any of its Shares without the approval of the Company. Notwithstanding
the foregoing, a Shareholder may transfer all or any of his Shares without
complying with this Section 3(a) (such Transfer being a "Permitted Transfer"):
(i) if the Shareholder is an individual, by way of gift to his spouse or to the
siblings or lineal descendants or ancestors of such Investor or his spouse, or
to any trust for the benefit of any one or more of the foregoing; provided, that
any such transferee shall agree in writing, as a condition to such transfer, to
be bound by all of the provisions of this Agreement to the same extent as if
such transferee were the Shareholder transferring such Shares; (ii) if the
Shareholder is an individual, by will or the laws of descent and distribution;
provided, that such Shares shall thereafter remain subject to the provisions of
this Agreement to the same extent they would be if
<PAGE>
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held by the Shareholder; (iii) by any sale or disposition pursuant to the
closing of a Qualified Public Offering (as defined in Section 3(b) hereof); (iv)
pursuant to a merger or consolidation of the Company with any other entity in
which all of the Shareholders are participating on a ratable basis (based upon
the number and class of Shares held); or (v) to another Shareholder; provided,
that such Shares as are transferred to a Shareholder shall thereafter remain
subject to the provisions of this Agreement. Notwithstanding any other provision
of this Agreement to the contrary, with respect to any Shareholder which is a
partnership, in the event of the distribution of the Shares then held by such
Shareholder to its partners, upon delivery to the Company of a written
instrument (in form and substance satisfactory to the Company) pursuant to which
such partners severally agree to remain subject to the obligations of the
Shareholder hereunder, the provisions hereof shall inure to the benefit of and
be binding upon the partners of such Shareholder.
(b) As used in this Agreement, a "Qualified Public Offering" shall mean
(i) the closing of an underwritten public offering pursuant to an effective
registration statement under the Securities Act covering the offer and sale of
the Company's Common Stock to the public in which the proceeds received, without
deduction for any offering expenses (including underwriting discounts and
commissions), equal or exceed $20,000,000, as adjusted for stock dividends,
stock splits, recapitalization and the like or (ii) a merger or consolidation
with or sale of all or substantially all of the assets of the Company to a
corporation the shares of which are listed on a recognized stock exchange or are
sold in the over-the-counter market.
4. Drag-Along Sale. (a) In the event that Tek proposes to sell, assign,
transfer or otherwise dispose of such number of shares of Common Stock, or other
securities of the Company convertible into, or exchangeable or exercisable for
Common Stock, constituting a minimum of 30% of the outstanding Shares held of
record or beneficially by Tek, in a single transaction or series of related
transactions (a "Sale"), then Tek may require in connection with such Sale that
the Shareholders sell at the same price and on the same terms as Tek, the same
proportion of such Shareholders' Shares (on a Common Stock equivalent basis as
if the convertible, exchangeable or exercisable securities were converted into
Common Stock) as the proportion being sold of Tek's aggregate holdings of Shares
in the Sale.
(b) In the event that Tek elects to exercise the right set forth in
Section 4(a) to require the Shareholders to sell their Shares, Tek shall give
written notice (the "Notice of Sale") of such Sale to the other Shareholders.
The Notice of Sale shall describe in reasonable detail the proposed Sale
including, without limitation, the identity of the proposed transferee, if
known, the number of shares of Common Stock, and securities convertible into, or
exchangeable or exercisable for, Common Stock to be sold, assigned, transferred
or otherwise disposed of, the nature of such Sale and the consideration to be
paid and shall advise the Shareholders that they are required to participate pro
rata in such transaction. Upon receipt of such Notice of Sale, each Shareholder
shall sell, at the same price per share and on the same terms and conditions as
involved in such Sale, the same percentage of Shares owned (and deemed to be
owned hereunder, including convertible, exchangeable or exercisable securities
on a Common Stock equivalent basis) by such Shareholder as equals the percentage
of Shares owned (and deemed to be owned hereunder, including convertible,
exchangeable or exercisable securities on a Common Stock equivalent basis) by
Tek and are being sold in connection with such Sale. For purposes of all the
foregoing calculations, there shall be included all shares of Common Stock then
owned by
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a Shareholder, as applicable, and all shares of Common Stock issuable to a
Shareholder, as applicable, upon the conversion, exchange or exercise of any
securities of the Company convertible into, or exchangeable or exercisable for,
Common Stock.
5. Tag-Along Rights. (a) If Tek proposes to enter into a Sale of
securities constituting a minimum of 30% of the outstanding Shares held of
record or beneficially by Tek, in a single transaction or a series of related
transactions, then prior to the consummation thereof each Shareholder shall be
afforded the opportunity to join in such Sale and to sell at the same price and
on the same terms as Tek, the same proportion of such Shareholders' Shares (on a
Common Stock equivalent basis as if the convertible, exchangeable or exercisable
securities were converted into Common Stock) as the proportion being sold of
Tek's aggregate holdings of Shares in the Sale. Any purported Sale subject to
this Section 5 not made in compliance with this Section 5 shall be void and
shall not be consummated upon the books and records of Tek.
(b) Prior to the consummation of any Sale under this Section 5, Tek
shall cause each person or persons that propose to acquire Shares in the Sale
(the "Proposed Purchasers") to offer (the "Purchase Offer") in writing to each
Shareholder to purchase that percentage of Shares at the same price per share
(the "Tag-Along Price"), and on such other terms and conditions (the "Tag-Along
Terms"), as the Proposed Purchaser has offered to purchase the Shares to be sold
by Tek. Each Shareholder shall have at least 10 days from the receipt of the
Purchase Offer in which to accept the Purchase Offer and, to the extent any such
Shareholder accepts such Purchase Offer in accordance with the terms hereof, the
number of Shares to be sold in such Transfer shall be so increased.
(c) The provisions of this Section 5 shall not apply to Permitted
Transfers made in accordance with Section 3. In the event that a Transfer
subject to this Section 5 is proposed to be made to a person other than a
Shareholder, Tek shall notify such person that the transfer is subject to this
Agreement and shall ensure that no Transfer is consummated without compliance
with this Section 5.
6. Preemptive Rights. (a) The Company hereby grants to each Shareholder
a preemptive right to purchase all or any part of such Shareholder's "pro rata
share" (as defined in this Section 6) of any "New Securities" (as defined in
this Section 6) that the Company may, from time to time, propose to sell or
issue. Such preemptive right shall be subject to the following provisions of
this Section 6.
(b) A Shareholder's "pro rata share," for purposes of this Section 6,
is the ratio that (i) the number of Shares then held by such Shareholder bears
to (ii) the total number of Shares then held by all Shareholders.
(c) "New Securities" shall mean any Shares of capital stock of the
Company, including shares of Common Stock and shares of preferred stock or other
shares of capital stock of the Company which are convertible into Common Stock
("Convertible Shares") and securities, such as rights, options and warrants
exercisable for shares of Common Stock; whether now authorized or not; provided,
however, that "New Securities" shall not include (i) securities issuable upon
exercise or conversion of securities outstanding on the date hereof, (ii)
securities offered to the public generally pursuant to an effective registration
statement under the Securities
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Act of 1933, as amended, (iii) securities issued pursuant to the acquisition by
the Company of another person or assets of another person, whether by merger,
purchase of shares, purchase of assets, or other reorganization, (iv) securities
issued to officers, directors or employees of, or consultants to, the Company
pursuant to any arrangement or stock option plan approved by the Board of
Directors of the Company, (v) securities issued to third parties in exchange for
goods and services provided to the Company (or any of its subsidiaries) by such
third parties, on terms approved by the Board of Directors of the Company, (vi)
securities issued to any lender or other person providing financing to the
Company, (vii) shares of the Company's capital stock issued pursuant to any
rights or agreements including, without limitation, Convertible Securities,
provided that the preemptive rights established by this Section 6 apply with
respect to the initial sale or grant by the Company of such rights or
agreements, or (viii) shares of the Company's capital stock issued in connection
with any stock split, stock dividend, recapitalization, or similar transaction
by the Company.
(d) Procedure. In the event that the Company proposes to undertake an
issuance of New Securities, the Company shall give each Shareholder written
notice of its intention, describing the type of New Securities and the price and
general terms upon which the Company proposes to issue the same. Each
Shareholder shall have five (5) business days from the date any such notice is
given to agree to purchase all or any part of its pro rata share of such New
Securities for the price and upon the general terms specified in the notice by
giving written notice to the Company and stating therein the quantity of New
Securities to be purchased.
(e) In the event that any Shareholder fails to exercise its preemptive
right within such five (5) business day period, the Company shall have ninety
(90) days thereafter to sell the New Securities with respect to which any such
Shareholder's preemptive rights were not exercised, at a price and upon general
terms no more favorable to the purchasers thereof than specified in the
Company's notice. In the event the Company has not sold the New Securities
within such ninety (90) day period, the Company shall not thereafter issue or
sell any New Securities without first offering such securities to the
Shareholder in the manner provided in this Section 6.
(f) The preemptive right granted under this Section 6 shall expire upon
the completion by the Company of a Qualified Public Offering.
7. Voluntary Lifetime Disposition. (a) If any Shareholder receives a
bona fide, non-collusive offer to purchase all or any portion of its Shares,
which such Shareholder intends to accept (the "Offer"), it shall first give
notice to the Company and Tek of such intention. Such notice shall state the
name and address of the proposed transferee, the Offer price, type of
consideration and the other terms and conditions of the Offer. Tek shall then
have the option, exercisable by giving notice to the offeror and such
Shareholder within 10 days following the date on which such notice of intention
to transfer is given, to purchase all or a portion of the Shares proposed to be
transferred for such consideration per Share in cash and/or debt instruments as
set forth in the Offer.
(b) If Tek declines to exercise the option provided in clause (a) above
as to any or all of the Shares proposed to be transferred in the Offer, prior to
the end of the 10-day option period provided it in clause (a) above, Tek shall
so notify the Company and the
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Shareholder who received the Offer, and the Company shall then have the option,
exercisable by giving notice to the Shareholder who received the Offer and to
Tek, within fifteen days of receiving notice from Tek of Tek's decision to
decline to exercise the option provided in clause (a) above, with respect to any
or all of the Shares proposed to be transferred in the Offer, to purchase all of
those Shares proposed to be transferred in the Offer which Tek has declined to
purchase for such consideration per Share in cash and/or debt instruments as set
forth in the Offer.
(c) If, upon the expiration of the option periods provided in clauses
(a) and (b) above, Tek and the Company have not exercised their options so as to
purchase in the aggregate all of the Shares proposed to be transferred in the
Offer, then, subject to the transfer restrictions herein, the Shareholder
wishing to transfer the Shares proposed to be transferred in the Offer shall be
free to do so, but only to the same transferee, and upon the same terms and
conditions stated in his or her notice of intention to transfer. If the Shares
proposed to be transferred under this Section 7 are not transferred within 30
days following the expiration of the last of the aforesaid option periods, such
Shares shall again be restricted by, and may not be transferred without full
compliance with, this Agreement.
8. Board of Directors. (a) (a) The Company's initial Board of Directors
shall consist of three directors, of whom two (2) shall be designated by Tek
(collectively, the "Tek Directors") and one (1) shall be Kyle M. Tager (the
"Shareholder Director"). In the event of any increase in the size of the Board
of Directors, Tek and the Shareholders shall have the right to designate
additional members of the Board in the same such proportion represented by the
Tek Directors and the Shareholder Directors.
(b) At any special or annual meeting of the shareholders of the Company
at which the election of directors is considered or by consensual action of the
shareholders of the Company with respect to the election of directors, Tek and
the Shareholders shall vote all of its or their Shares for the election of the
Tek Directors and the Shareholder Director(s).
(c) In the event a vacancy is created on the Company's Board of
Directors by the death, removal or resignation of any director ( a "Former
Director"), the person to fill such vacancy shall be designated as soon as
practicable, but in no event later than thirty (30) days after the vacancy is
created, by the remaining Tek Director(s) if the Former Director was a Tek
Director and by the Shareholder Directors if the Former Director was a
Shareholder Director. If such vacancy is not filled within such thirty (30) day
period, the President of the Company shall within seven (7) days thereafter
designate a person to fill such vacancy. Upon such designation, the Company's
Board of Directors shall meet as soon as practicable, but in no event later than
thirty (30) days thereafter, for the purpose of approving and appointing such
designee to fill the vacancy.
(d) If at any time Tek shall deliver to the Company a written statement
expressly proposing the removal of any Tek Director, or the Shareholders shall
deliver to the Company a written statement expressly proposing the removal of
any Shareholder Director, Tek and the Shareholders shall vote all of its or
their Shares, in the manner described for the election of directors in Section
9(b), for the removal of such director.
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(e) The terms and provisions of this Section 8 shall expire upon the
consummation of an equity investment in the Company by a third party of at least
$1 million.
9. Voting
Each shareholder shall vote all of its Shares (by a vote at a meeting
or by consensual action of the shareholders of the Company) upon any matter
submitted to the shareholders of the Company for a vote or for consensual
action, in such a manner as to be consistent and not in conflict with, and to
implement, the provisions of this Agreement.
10. Inclusion of Shares in the Event of an Initial Public Offering In
the event that the Company files a registration statement (a "Registration
Statement") in connection with an initial public offering of its Common Stock
(an "IPO") and any Shareholder or Tek is permitted to include in such
Registration Statement any of its Shares for distribution in the IPO, then each
of Tek or such other Shareholder, as applicable, shall be permitted to include
in such Registration Statement for sale in the IPO the same percentage of its
Shares held of record, in the aggregate, by itself and its Permitted
Transferees, as any other Shareholder or Tek.
11. Specific Enforcement. The Company, Tek and each Shareholder
expressly agree that a remedy at law alone will be inadequate in the even that
the covenants and agreements of the parties hereto are breached. Therefore, each
party hereto agrees that each party hereto shall be entitled to an injunction to
prevent any such breach, in addition to all other remedies to which it may be
entitled, at law or in equity.
12. Notices. Notices given hereunder shall be in writing and shall be
deemed received (i) when hand delivered or when delivered by telecopy or other
method of facsimile, (ii) one business day after being sent by a nationally
recognized overnight delivery service for next business day delivery, and (iii)
five days after being sent by registered mail, return receipt requested, postage
prepaid, to the party being notified at such party's address specified above or
on Schedule I hereto, or such other address of which the addressee may
subsequently notify the other parties in writing.
13. Continuation. The rights and obligations under this Agreement shall
continue after the death of any Shareholder or termination of the relationship
of any Shareholder with the Company for any reason, or no reason.
14. Invalidity of Transfer. No purported sale, encumbrance, gift or
other transfer of any Shares by any of the Shareholders in violation of any
provision of this Agreement shall be valid, and the Company shall not transfer
any of said shares on the books of the Company, nor shall any of said Shares be
entitled to vote, nor shall any dividends be paid thereon during the period of
any such violation. Such disqualifications shall be in addition to and not in
lieu of any other legal or equitable right to enforce said provisions.
15. Extraordinary Events
If from time to time during the term hereof there is any stock split,
stock dividend, recapitalization, consolidation or similar event, or any
consolidation, merger or sale of all or substantially all, of the assets of the
Company, then, in such event, any and all new, substituted
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or additional securities or other property (other than cash) to which the
Shareholder is entitled by reason of his ownership of Shares shall be
immediately subject to the provisions of this Agreement and be included in the
term "Shares" for all purposes thereof.
16. Legend. All certificates representing any Shares held by any
Shareholder shall be stamped or otherwise imprinted with a legend in
substantially the following form (in addition to any legend required under
applicable Federal or state securities laws):
ANY DISPOSITION OF ANY INTEREST IN THE SECURITIES REPRESENTED
BY THIS CERTIFICATE IS SUBJECT TO RESTRICTIONS, AND THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE
TERMS OF A CERTAIN AGREEMENT BETWEEN THE RECORD HOLDER HEREOF,
TEKINSIGHT.COM, INC. AND THE COMPANY, COPIES OF WHICH WILL BE
MAILED TO ANY HOLDER OF THIS CERTIFICATE WITHOUT CHARGE WITHIN
FIVE (5) DAYS OF RECEIPT BY THE COMPANY OF A WRITTEN REQUEST
THEREFOR.
Each Shareholder agrees that the Company may impose or instruct its
transfer agent to impose transfer restrictions on the Shares represented by
certificates bearing the legend referred to in this Section 16 to enforce the
provisions of this Agreement. The legend may be removed upon termination of this
Agreement.
17. Entire Agreement and Amendments. This Agreement constitutes the
entire agreement of the parties with respect to the subject matter hereof and
neither this Agreement nor any provision hereof may be waived, modified, amended
or terminated except by a written agreement signed by each of the parties
hereto; provided, however, that this Agreement may be amended, with the consent
only of the Company, to add additional parties signatory hereto (including,
without limitation, to add new Shareholders as additional parties signatory
hereto) and in connection with any such amendment to amend Schedule I hereto. No
waiver of any breach or default hereunder shall be considered valid unless in
writing, and no such waiver shall be deemed a waiver of any subsequent breach or
default of the same or similar nature.
18. Successors and Assigns. This Agreement shall be binding upon the
heirs, personal representatives, executors, administrators, successors and
assigns of the parties.
19. Severability. If any provision of this Agreement shall be held to
be illegal, invalid or unenforceable, such illegality, invalidity or
unenforceability shall attach only to such provision and shall not in any manner
affect or render illegal, invalid or unenforceable any other provision of this
Agreement, and this Agreement shall be carried out as if any such illegal,
invalid or unenforceable provision were not contained herein.
20. Captions. Captions are for convenience only and are not deemed to
be part of this Agreement.
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21. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same instrument.
22. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York without reference to its
principles of conflicts of law.
23. Term of Agreement. This Agreement shall be effective as of the date
first hereinabove set forth and shall, except as otherwise provided herein,
terminate on the occurrence of a Qualified Public Offering (as referred to
above).
24. Interpretation. The parties acknowledge and agree that: (i) each
party and its counsel, if any, reviewed and negotiated the terms and provisions
of this Agreement and have contributed to its revision; (ii) the rule of
construction to the effect that any ambiguities are resolved against the
drafting party shall not be employed in the interpretation of this Agreement;
and (iii) the terms and provisions of this Agreement shall be construed fairly
as to all parties hereto, regardless of which party was generally responsible
for the preparation of this Agreement.
25. Waiver of Any Conflicts of Interest. Each of the parties to this
Agreement hereby agrees that Nixon Peabody LLP may serve as counsel to the
Company, Tek and/or any of their affiliates in connection with this Agreement,
the transactions contemplated hereby and any future interpretations thereof or
litigation relating thereto, and each of the parties hereto hereby waives any
conflict of interest arising therefrom or relating thereto.
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IN WITNESS WHEREOF, the parties have executed this Agreement on and as
of the date first set forth above.
TEKINSIGHT.COM, INC.
By:_________________________________________
Name:
Title:
BIG TECHNOLOGIES, INC.
By:_________________________________________
Name:
Title:
THE SHAREHOLDERS:
___________________________________________
KYLE M. TAGER
___________________________________________
ANDREW L. LEE
<PAGE>
SCHEDULE I
Number of Company
Name Shares Owned
---- ----------------------
Kyle M. Tager 32.375
Andrew L. Lee 2.625
Exhibit 10.2
EMPLOYMENT AGREEMENT
This AGREEMENT (this "Agreement"), dated as of May 17, 2000 (the
"Effective Date"), is made by and between Big Technologies, Inc., a Delaware
corporation (the "Company"), having offices at 236 Huntington Avenue, #215,
Boston, MA 02115, TekInsight.Com, Inc., a Delaware corporation having offices at
5 Hanover Square, 24th Floor, New York, NY 10004 ("Tek"), and Kyle M. Tager,
residing at 128 Exeter Street, #311, Boston, MA 02116 (the "Executive").
WHEREAS, TekInsight.Com, Inc. ("Tek") intends to acquire Big
Technologies, Inc., a Delaware corporation ("Big"), through a merger (the
"Merger") of Big with and into the Company, with the Company being the surviving
entity of the Merger (the "Surviving Corporation");
WHEREAS, upon completion of the Merger, the Surviving Corporation
intends to change its name to Big Technologies, Inc.;
WHEREAS, Executive was President and a principal stockholder of Big
prior to the Merger;
WHEREAS, the Company wishes to provide for the continuing services of
the Executive to serve as President and, initially, Chief Executive Officer of
the Company and as a member of its Board of Directors following completion of
the Merger;
WHEREAS, Executive is willing to serve as President and, initially, as
Chief Executive Officer of the Company and as a member of the Board of Directors
of the Company on the terms set forth herein;
NOW, THEREFORE, in consideration of the mutual covenants and promises
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
1. Definitions.
1.1. "Affiliate" means any person or entity controlling, controlled by
or under common control with the Company.
1.2. "Board" means the Board of Directors of the Company.
1.3. "Cause" means (a) the Executive is convicted of a felony involving
actual dishonesty as against the Company or an Affiliate, or (b) the Executive,
in carrying out his duties and responsibilities under this Agreement, is guilty
of gross negligence or willful misconduct resulting, in either case, in material
harm to the Company and/or any Affiliate (which material harm shall include harm
to the Company's reputation for honest dealing and competent creation of
products and performance of services) in the market for Company products and
services, (c) the Executive fails to follow the lawful directions of the Board
of Directors of the Company, or
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of the Board of Directors of Tek, which directions are related to the operations
and business of the Company, or (d) the Executive is otherwise in breach of the
terms of this Agreement having a material adverse effect on the Company.
1.4. "Commencement Date" has the meaning set forth in Section 3 below.
1.5. "Date of Termination" means (a) in the case of a termination for which
a Notice of Termination is required, the date of actual receipt of such Notice
of Termination or, if later, the date specified therein, as the case may be, and
(b) in all other cases, the actual date on which the Executive's employment
terminates during the Term of Employment, as that term is defined in Section 3
below.
1.6. "Disability" means the Executive's inability to render, for a period of
one hundred and twenty (120) days in any period of six consecutive months,
services hereunder by reason of permanent disability, as determined by the
written medical opinion of an independent medical physician mutually acceptable
to the Executive and the Company. If the Executive and the Company cannot agree
as to such an independent medical physician, each shall appoint one medical
physician and those two physicians shall appoint a third physician who shall
make such determination. Notwithstanding the above, the Executive shall not be
deemed disabled for the purposes of this Agreement unless he would be deemed
disabled under any long-term disability policy which may be obtained by the
Company or Tek for the benefit of Executive, which policy is approved in writing
by Tek and/or the Company, as the case may be.
1.7. "Subsidiary" means each corporation, limited liability company,
partnership, joint venture or other form of business entity more than 50% of the
equity of which is beneficially owned by a Person or entity.
1.8. "Year" means each 12-month period during the Term of Employment, the
first day of which commences on the Commencement Date and terminates 12 months
thereafter.
2. Employment
The Company agrees to employ the Executive, and Executive agrees to
serve the Company, upon the terms and conditions hereinafter set forth, which
terms and conditions shall automatically incorporate by reference the provisions
of the written employee manuals and the internal policies of the Company and
Tek, as such manuals and policies may be amended by the Company and Tek at any
time during the Term of Employment (as hereinafter defined), except where such
internal policies and written employee manuals contain provisions which are
contrary to the terms and conditions of this Agreement, in which case the terms
and conditions of this Agreement shall control.
3. Term
Subject to the terms of this Agreement, the employment of Executive
will be for a period of three (3) years, commencing on the effective date of the
Merger under the laws of the State of Delaware (the "Commencement Date") and
ending on the third anniversary of the Commencement Date (the "Term of
Employment"). On the third anniversary of the
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Commencement Date, the Term of Employment shall automatically be extended for
additional one-year periods, unless not later than ninety days (90) prior to the
end of the Term of Employment, as extended, either party to this Agreement shall
have given written notice to the other that the Term of Employment shall not be
extended beyond the expiration date of the then current Term of Employment.
4. Position, Responsibilities and Duties.
4.1. Executive shall devote his full business time, energy, skills and
attention to the performance of his duties and responsibilities hereunder and
shall use his best efforts to perform faithfully and efficiently the duties and
responsibilities contemplated by this Agreement.
4.2. Executive shall initially have the title and hold the position of
President and Chief Executive Officer of the Company. Executive shall also
serve, without additional compensation, as a director of the Company.
4.3. Executive shall initially perform the duties and shall have the
responsibilities and authorities for the Company as are normally associated with
the office of President and Chief Executive Officer for a corporation of the
Company's size which is engaged in the type of business conducted by the
Company. As President and Chief Executive Officer, Executive shall have general
supervision over the business and affairs of the Company and its subsidiaries,
shall report and be responsible to the Board of Directors of the Company, and
shall have the powers and authority superior to those of any other officer or
employee of the Company or any of its subsidiaries. However, the Board of
Directors may, with Executive's participation, confer the title of Chief
Executive Officer upon another person, without any diminution in the
compensation or benefits payable to Executive hereunder, and after which time
the Executive shall retain the title of President and shall share supervision
over the business and affairs of the Company with the Chief Executive Officer in
the manner decided by the Board of Directors. Executive shall perform such
duties in consultation with the Company's Board of Directors and in accordance
with the budget and plans approved by the Board of Directors of the Company.
Initially, as President of the Company, the Executive shall, in consultation
with and under the general direction of the Board of Directors, be responsible
for preparing the budget for the Company and establishing the strategy and
overall direction of the Company and for the implementation of the corporate
plans and policies for the Company. Executive shall not be required to perform
duties hereunder that would require him to relocate his residence.
5. Compensation; Benefits; Expenses; and Bonus.
5.1. As compensation for the services to be rendered hereunder, the Company
shall pay to Executive a base salary ("Base Salary") at the rate of $130,000 per
annum, payable in equal installments at such times as shall be agreed upon by
the Company and Executive but no less frequently than monthly. Executive's Base
Salary shall also be reviewed annually by the Compensation Committee of the
Board of Directors of the Company, or the full Board of Directors of the Company
if no such Committee is constituted, for consideration of merit increases. In
conducting any such annual review, the Compensation Committee or the Board of
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Directors shall take into account any change in the Executive's
responsibilities, increases in the compensation of other executives of the
Company, and the salaries being paid by similarly-staged private companies in
the Web design and related products and services industry that have similar
financial results and operating performance, the performance of the Executive
and other pertinent factors. Once increased, the Base Salary can not be
decreased.
5.2. During the Term of Employment, the Executive shall be eligible to
participate, as determined by the Compensation Committee of the Board of
Directors or the full Board of Directors of the Company and/or Tek (as
applicable), in the event no separate Compensation Committee is established, in
all incentive compensation, bonus, and benefit plans and programs howsoever
defined and maintained by the Company and Tek for the benefit of its executives
and employees, including without limitation bonuses, stock option plans or other
stock-based compensation plans, or equity appreciation plans, disability and
retirement plans.
5.3. The Company shall advance and/or reimburse reasonable travel and other
reasonable out-of-pocket expenses incurred or to be incurred by Executive in
rendering the services hereunder on behalf of the Company in accordance with the
Company's then current policies regarding same.
5.4. During the Term of Employment, Executive shall be entitled to three
weeks of paid vacation (or longer if longer periods are provided to other
management employees of Tek, the Company or its Subsidiaries, and such other
fringe benefits and perquisites as may be provided to other management employees
of the Company or its Subsidiaries).
6. Insurance.
6.1. Company shall, for so long as Executive is employed by it, pay for the
benefit of Executive the premiums on a life insurance policy insuring the life
of Executive in the amount of $50,000 from the Commencement Date through the
first anniversary of the Commencement Date, in the amount of $75,000 from the
first anniversary through the second anniversary of the Commencement Date, and
in the amount of $100,000 from the second anniversary through the third
anniversary of the Commencement Date. In the event of the periodic extension of
this Agreement pursuant to the provisions of Section 3 hereof, the Company and
the Executive shall agree upon an increase in the amount of insurance coverage
for each extended period. The Company in its discretion may at any time after
the execution of this Agreement apply for and procure as owner and for its own
benefit, key man life insurance on the life of Executive, and Executive shall
have no interest whatsoever in any such key man policy, Executive shall at the
request of the Company cooperate with the Company in assisting it to obtain or
maintain such coverage.
6.2. Company shall, for so long as Executive is employed by it, pay for the
benefit of Executive and Executive's Family the premiums for medical insurance,
including basic as well as major medical coverage, pursuant to such policies as
are made available to other senior executives of Tek or the Company, and on the
same basis therefor. The Company shall also, for so long as Executive is
employed by it, obtain and pay the premiums for the benefit of Executive
<PAGE>
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disability insurance policy, on such terms as shall be agreed to by the Company
and the Executive.
7. Non-Competition and Confidential Information.
7.1. Executive will not at any time, whether during or after the Term of
Employment, reveal to any person or entity any of the Confidential Information
of the Company or Tek, which includes the information of their Affiliates, or of
any third party which the Company or Tek, or their Affiliates, are under an
obligation to keep confidential. The term "Confidential Information" as used
throughout this Agreement shall mean all trade secrets, proprietary information
and other data or information (and any tangible evidence, record or
representation thereof), whether prepared, conceived or developed by Executive
or any other employee or contractor for the Company or Tek , or their Affiliates
or received by the Company or Tek or their Affiliates from an outside source,
which is in the possession of the Company or Tek or their Affiliates (whether or
not the property of the Company or Tek), which in any way relates to the present
or future business of the Company or Tek including their Affiliates, or any
customer or supplier of the Company or Tek or their Affiliates, and which is
maintained in confidence by the Company or Tek and/or their Affiliates. Without
limiting the generality of the foregoing, "Confidential Information" shall mean
all trade secrets, know-how, proprietary information and other information or
data relating to the present or future business of the Company or Tek and their
Affiliates which is in the possession of the Executive or which has previously
been delivered to him, including but not limited to:
(i) any idea, improvement, invention, innovation,
development technical data, design, formula, device,
pattern, concept, computer program, software,
firmware, source code, object code, algorithm,
subroutine, object module, schematic, model, diagram,
flow chart, chip masking specification, user manual,
training or service manual, product specification,
plan for a new or revised product, compilation of
information, or work in process, and any and all
revisions and improvements relating to any of the
foregoing (in each case whether or not reduced to
tangible form); and
(ii) the name of any customer, employee, prospective
customer or consultant, any sales plan, marketing
material, plan or survey, business plan, product or
development plan or specification, business proposal,
financial record, or business record or other record
or information relating to the business of the
Company or its Affiliates.
(iii) Notwithstanding the foregoing, the term Confidential
Information shall not apply to information (u)
disclosed by Executive during the term of his
employment in the course of his duties hereunder and
Executive reasonably determines in good faith that it
is in the best interests of the Company and Tek to do
so, (v) Executive is compelled pursuant to an order
of a court or other body having jurisdiction over
such matter to
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do so (in which case the Company shall be given
prompt written notice of such intention to divulge
such Confidential Information not less that five (5)
days prior to such disclosure or such shorter period
as the circumstances may reasonably permit), (w)
which the Company, Tek or an Affiliate of either has
voluntarily disclosed to the public without
restriction, (x) which has otherwise lawfully entered
the public domain, (y) which the Company or Tek or an
Affiliate thereof has permitted Executive to disclose
by its prior written consent; or (z) which Executive
may disclose at a forum, workshop or round table
conference with the prior knowledge and consent of
the Company or Tek or an Affiliate thereof.
7.2. Executive further represents that Executive's performance of all of the
terms of this Agreement and as an Executive of the Company does not and will not
breach any agreement to keep in confidence Confidential Information acquired by
Executive prior to employment by the Company. Executive has not entered into,
and agrees not to enter into, any agreement either written or oral in conflict
herewith.
7.3. During the Term of Employment, Executive agrees not to make, use or
permit to be used any notes, memoranda, reports, lists, records, drawings,
sketches, specifications, software programs, data, documentation or other
materials of any nature relating to any matter within the scope of the business
of Company, Tek or their Affiliates concerning any of their dealings or affairs
otherwise than for the benefit of the Company, Tek and their Affiliates.
Executive further agrees, after the termination of his Employment, not to use or
permit to be used any such notes, memoranda, reports, lists, records, drawings,
sketches, specifications, software programs, data, documentation or other
materials including the Company's or Tek's manuals and policy statements or
those of their Affiliates, it being agreed that all of the foregoing shall be
and remain the sole and exclusive property of the Company or Tek, as applicable,
subject to the obligation of confidentiality created herein. Executive agrees
that within ten (10) days after the termination of Executive's Term of
Employment, Executive shall either (i) deliver all of the foregoing, and all
copies thereof, to the Company, at its main office, or (ii) destroy all of the
foregoing, and all copies thereof, and deliver a sworn notice to the Company
certifying to such destruction.
7.4. For a period of one (1) year following termination of Executive's
employment with the Company (the "Non-Competition Period"), if such termination
was either voluntary by resignation on the part of the Executive or at the
request of the Company for Cause, Executive agrees not to either directly or
indirectly, as an owner, principal, manager, stockholder, consultant, director,
officer or employee of any business entity:
(a) engage in or have a financial interest in, any business which is
competitive with the business of the Company; provided, however, that nothing
contained herein shall preclude the Executive from purchasing or owning less
than five percent (5%) of the stock or other securities of any company with
publicly-held securities; or
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(b) contact or solicit any employee, consultant, independent
contractor, or agent of the Company and/or Tek with the intention or effect of
encouraging such party to terminate his or her employment, agency or other
relationship, as applicable, with the Company or Tek; or
(c) contact or otherwise solicit, accept business from, or compete for
existing or prospective customers or suppliers, licensors or licensees,
franchisors or franchisees of the Company and/or Tek with the intention or
effect of encouraging such party to terminate or reduce the volume of its
business with the Company and/or Tek or to place any portion of its business
elsewhere; provided, that in the case of termination of the Executive without
Cause, then during the Non-Competition Period, the Executive shall only be
prohibited from engaging in activities covered by Section 7.4(b).
For the purposes hereof, a business will be deemed competitive with the
business of the Company or in competition with the Company if it is carried on
anywhere in the United States and Canada or other parts of North America and if
it involves the performing of services and/or the production, manufacture,
distribution, sale or development of any product or services relating to the
development of Web sites or applications accessible over the Internet for local
and state governments or for not-for-profit entities (the "Work Scope") and/or
the licensing of any process or technology similar to those utilized, developed
or being developed by the Company during the period in which Employee is
employed or otherwise affiliated with the Company which is within the Work
Scope. The determination of whether services are within the Work Scope shall be
solely within the reasonable discretion of Company's Board of Directors, whose
decisions will be final and binding, absent a non-appealable final order by a
court with jurisdiction that such Board of Directors acted unreasonably.
7.5. Upon the termination or expiration of this Agreement or at such other
time as the Company and its Affiliates may request, Executive agrees to return
to the Company all originals and copies, whether generated by Executive or
anyone else, of all versions of software code in hard copy or machine readable
form, all document files, lists, forms, contracts, notebooks, rolodexes, keys,
credit cards, and any other material which came into, and continues to be in,
Executive's possession and relate to the Company, its Affiliates and their
respective businesses or their potential acquisitions and investments, except to
the extent such documents, notebooks or code subsist in computers which are the
property of Executive, and Executive will be deemed to have returned such to the
Company and/or its Affiliates by printing a hard copy of such and submitting a
certificate affirming under oath that the information has been deleted.
7.6. Executive recognizes that the Company and its Affiliates develop
highly-specialized services in competition with other business entities
throughout the United States, Canada and other parts of North America, which
products and services are designed to compete in regional, nation-wide and other
North American markets. In light of the highly competitive nature of the
Company's services, Executive agrees that the restrictions contained in this
Section 7 are reasonable and cannot be limited to any geographic area within the
United States, Canada or other parts of North America or to any narrower field.
The Executive acknowledges that the provisions of this Section 7 are essential
to the continued goodwill and profitability of the Company and Tek and necessary
for the preservation of confidentiality of Confidential
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Information, and further acknowledges that the application or operation thereof
will not involve a substantial hardship upon his future livelihood. Should any
court determine that the provisions of this Section 7 shall be unenforceable in
respect of scope, duration or geographic area, such court shall be empowered to
substitute, to the extent enforceable, provisions similar hereto or other
provisions so as to provide to the Company and Tek, to the fullest extent
permitted by applicable law, the benefits intended by this Section 7.
8. Publications
While the Company recognizes the importance of publishing technical
articles and making presentations at technical symposiums and the like and
generally encourages such academic activities, in the interests of insuring
appropriate protection of Executive's work product and insuring that
Confidential Information or other Proprietary nonpublic information of the
Company is not inadvertently disseminated, Executive agrees that he shall not
publish or cause to be published any articles, oral presentations, or other
materials related to the business or activities of the Company, its Affiliates
or its clients without first obtaining the consent of the Company.
9. Developments Agreement
9.1. If at any time or times during Executive's Employment, including
Executive's employment by Big prior to the Merger, Executive (either alone or
with others) made or makes, conceives, discovers or reduces to practice any
invention, modification, discovery, design, development, improvement, process,
software program, work of authorship, documentation, formula, data technique
know-how, secret or any interest therein (whether or not patentable or
registrable under copyright or similar statutes or subject to analogous
protection) (herein called "Developments") that relate to the business of the
Company, its Affiliates, or that of any supplier or customer of the Company with
respect to any of the goods and services sold, licensed or under development by
the Company, or result from the use of premises or personal property, tangible
or intangible, owned, leased or contracted for by the Company or its Affiliates,
such Developments and the benefits thereof shall immediately become the sole and
absolute property of the Company or its Affiliates, and Executive shall promptly
disclose to the Company (or any persons designated by it) each such Development.
Executive hereby assigns any rights which Executive may have or acquire in the
Developments and benefits and/or rights resulting therefrom to the Company and
its assigns without further compensation and shall communicate, without cost or
delay, and without publishing the same, all available information relating
thereto (with all necessary plans and models) to the Company.
9.2. Upon disclosure of each Development to the Company, Executive will,
during the Term of Employment and at any time within two years thereafter, at
the request and cost of the Company, sign, execute, make and do all such deeds,
documents, acts and things as the Company or its Affiliates and its duly
authorized agents may reasonably require:
(i) to apply for, obtain and vest in the name of the Company or
its Affiliates alone (unless the Company otherwise directs)
letters patent, copyrights or other analogous or other
forms of intellectual property
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protection in any country throughout the world and when so
obtained or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in respect of such
applications and any opposition proceedings or petitions or
applications for revocation of such letters patent,
copyright, or other analogous protection, or other forms of
intellectual property protection. In the event the Company
or its Affiliates is unable, after reasonable effort, to
secure Executive's signature on letters patent, copyright
or other analogous or other form of intellectual property
protection relating to a Development, whether because of
Executive's physical or mental incapacity or for any other
reason whatsoever, then Executive hereby irrevocably
designates and appoints the Company and its duly authorized
officers and agents as Executive's agent and
attorney-in-fact, to act for and in Executive's behalf and
stead to execute and file any such application or
applications and to do all other lawfully permitted acts to
further the prosecution and issuance of letters patent,
copyright or other analogous protection thereon with the
same legal force and effect as if executed by Executive.
9.3. Executive understands that the Developments including, but not limited
to, those identified in the pages, if any, attached hereto which Executive can
demonstrate to the satisfaction of the Company or its Affiliates were made or
conceived prior to Employment by the Company or Big, are excluded from this
Agreement. Executive understands that he may have to provide a short description
of such excepted Developments and that it may not be sufficient to list the
title and purpose of such Developments.
9.4. To the maximum extent permitted by law, all written material or
material committed to a fixed form and components thereof, prepared in the
course of Executive's employment with Company and its Affiliates, or prior to
the Commencement Date while Executive was an employee of Big, including rough
drafts and other materials created in the developmental stages of preparation of
finished materials, shall be regarded as "works for hire" for the Company.
Executive agrees that all such materials and components thereof as described,
may be used by the Company without additional compensation to Executive and that
the Company shall have the right to change any such materials. Executive
furthermore assigns all rights, title and interest in and to all said materials
and components thereof, as aforedescribed, including all worldwide copyright
rights including any renewals or extensions available thereon, and agrees to
execute whatever Powers of Attorney, or other documents which the Company deems
necessary or advisable to apply to obtain, or maintain, such copyright
protection or to otherwise better enjoy the rights granted in this Section 9.
10. Death or Disability of Executive; Other Termination.
10.1. The Company may terminate the Executive's employment hereunder due to
Disability. In the event of the Executive's death or a Termination of the
Executive's employment due to
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Disability, the Executive, his estate or his legal representative, as the case
may be shall be entitled to receive:
(i) Base Salary continuation at the rate in effect on the date
of Termination through the end of the year in which the
Executive died or, in the case of a Disability, through the
date on which Executive begins to receive disability
benefits;
(ii) Any deferred compensation not yet paid to the Executive;
(iii) Reimbursement for expenses incurred but not yet paid prior
to such death or Disability;
(iv) Continued health insurance for Executive's family for the
balance of the coverage year in which Executive died or
became Disabled to the extent that such benefits legally
can be provided by the Company; and
(v) Any other compensation or benefits which may be owed or
provided to the Executive in accordance with the terms and
provisions of any applicable agreements, plans and programs
of or made by the Company.
Unless otherwise previously directed by Executive (or, in the case of
any benefit plan qualified under Section 401(a) of the Internal Revenue Code, as
amended (the "Code"; any such plan hereinafter referred to as a "Qualified
Plan"), as may be required by such Qualified Plan), all amounts payable under
this Section 10.1 shall be paid, as applicable, either to Executive or his
estate or designated beneficiaries and, at the Company's discretion, either in a
lump sum in cash within thirty (30) days after Executive's death or Disability,
or otherwise in accordance with the terms of the Company's regular schedule of
Base Salary payments any applicable plan or law; provided, however, that if the
Company elects to make a lump sum payment, such payment shall be equal to the
present value of all amounts so owed, using a discount rate to be agreed upon by
the parties hereto.
10.2. The Company may terminate the Executive's employment hereunder for
Cause. If the Company terminates the Executive's employment for Cause, the
Executive shall be entitled to receive:
(i) his Base Salary at the rate in effect at the time of such
termination through the Date of Termination
(ii) any deferred compensation and any accrued vacation pay as
of the Date of Termination;
(iii) reimbursement for expenses incurred, but not yet paid prior
to such Date of Termination; and
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(iv) any other compensation or benefits which may be owed or
provided to the Executive, in accordance with the terms and
provisions of any applicable agreements, plans and programs
of or made by the Company, through the Date of Termination.
All amounts payable under this Section 10.2 shall be paid to Executive
in a lump sum within thirty (30) days after the Date of Termination, and,
otherwise, in accordance with the terms of any applicable plan or law.
10.3. In the event of a proposed Termination by the Company for Cause under
Sections 1.3(c) or (d), the Executive shall be given written notice authorized
by a vote of at least a majority of the members of the Board of Directors of the
Company (excluding Executive) or of Tek, if applicable (excluding Executive, if
relevant) (the "Notice"), that the Company intends to terminate the Executive's
employment for Cause. Such notice shall specify the particular act or acts, or
failure to act, which is or are the basis for the decision to so terminate the
Executive's Employment for Cause. The Executive shall be given the opportunity
within ten (10) calendar days of the receipt of such Notice to meet with the
relevant Boards of Directors to defend such act or acts, or failure to act, and
the Executive shall be given ten (10) days after such meeting to correct such
acts or failure to act; provided, that if such act or failure to act reasonably
requires a longer period to correct, Executive shall be provided such longer
period as shall be reasonably specified by the relevant Boards of Directors. If
such acts or failure to act (i) are not correctable, or (ii) upon failure of the
Executive, within such periods provided above, to correct such acts or failure
to act, the Executive's employment by the Company shall automatically be
terminated for Cause immediately upon receipt of the Notice, or as of the date
specified in the Notice, respectively. If, in the reasonable determination of
the Board of Directors that issued the Notice, the Executive corrects such acts
or failure to act, then the Notice shall be automatically revoked and shall be
of no further force or effect. Termination for Cause under Sections 1.3(a) and
(b) shall be immediate upon receipt of the Notice for Cause as provided herein.
10.4. In the event the Company seeks to terminate Executive's Employment
without Cause, the Executive shall be entitled to all of the rights and benefits
which the Executive would be entitled to under this Agreement as follows:
(i) At the Company's option, either a lump sum payment in an
amount equal to the Base Salary owed through the end of the
Term of Employment (discounted at a rate to be agreed to by
the parties hereto) or those payments of Base Salary
through the Term of Employment, paid at such times as is in
accordance with the terms of this Agreement;
(ii) Any payment of deferred compensation and any accrued
vacation pay, accrued through the Date of Termination
(calculated, pro rata, with the Date of Termination being
deemed the last day of the Fiscal Year);
(iii) Reimbursement for expenses incurred but not paid prior to
such termination of employment; payment or award of any
other
<PAGE>
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compensation benefits which may be owed or provided to the
Executive in accordance with the terms and provision of any
applicable agreements, plans and programs of or made by the
Company. All outstanding warrants and options granted to
Executive which require a vesting period shall immediately
be vested and the Company (or Tek, as applicable) shall be
deemed to have waived such vesting periods; and
(iv) Continued health insurance for Executive's immediate family
for the balance of the coverage year in which Executive's
employment is terminated to the extent that such benefits
can legally be provided by the Company.
For purposes of this Agreement, the Executive's Employment shall be deemed to
have been terminated without Cause (x) following a material breach by the
Company of this Agreement, which breach is not cured within thirty (30) days
after notice from Executive thereof, (y) following Executive's voluntary
termination of employment, such that he is employed by neither Tek nor the
Company upon consummation of a Change of Control, or (z) following a breach of
section 18.2(a) of this Agreement. A "Change in Control" shall be deemed to
occur upon any of the following: (A) acquisition by any one "person" (as such
term is defined in section 3(a)(9) of the Securities and Exchange Act of 1934,
as amended, and used in section 13(d) and section 14(d) thereof, including
"group" as defined in section 13(d) thereof) of 33% or more of Tek's or the
Company's voting shares without the prior express approval of Tek's or the
Company's respective Board of Directors; (B) acquisition by any one "person" (as
referred to in the preceding phrase) of more than 50% of Tek's or the Company's
voting shares, respectively; (C) directors elected to the Board of Directors of
Tek or of the Company, respectively, over any 24 month period not nominated by
Tek or the Company representing 30% or more of the total number of directors
constituting the respective Board of Directors at the beginning of the period
(or such nomination results from an actual or threatened proxy contest); (D) any
merger, consolidation or other corporate combination upon the completion of
which Tek's or the Company's shares do not represent more than 50% of the
combined voting power of the resulting entity; and (E) upon the sale of all or
substantially all of the consolidated assets of Tek or the Company, other than a
distribution to shareholders of Tek or the Company, respectively.
All amounts payable under this Section 10.4 shall be paid to Executive
at the discretion of the Company either in a lump sum within thirty (30) days
after the Date of Termination, or in accordance with the terms of any applicable
plan or law; provided, however, that a lump sum payment shall be equal to the
present value of such owed amounts and shall be discounted at a rate to be
agreed to by the parties hereto.
10.5. The Company agrees that if Executive's employment with the Company is
terminated prior to end of the Term of Employment, as such may be extended, for
any reason whatsoever, Executive is not required to seek other employment or to
attempt in any way to reduce any amounts payable to Executive by the Company
pursuant to this Agreement. Further, the amount of payment provided for in this
Agreement shall not be reduced by any compensation earned
<PAGE>
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by Executive as the result of employment by another employer or otherwise; and
the amount of any benefit (other than health and medical benefits provided for
in Section 5 hereof) provided for in this Agreement shall not be reduced by any
benefit provided to Executive as the result of employment by another employer or
otherwise. The Company shall have the right to set off and apply against any
amount due and payable to Executive hereunder any amounts then due and owing by
Executive to the Company or any Subsidiary or Affiliate thereof under a note or
contract executed by the Executive with respect to advances of funds made by, or
indebtedness or other obligations owed to, the Company; provided, that this
right of set off shall not apply to any claim asserted by Tek, the Company or
its Affiliates against the Executive in any litigation.
10.6. The Company may not terminate the Executive without Cause prior to
April 15, 2001.
Notwithstanding anything to the contrary in any other agreement between
Tek or the Company, on the one hand, and Executive, on the other hand, upon the
occurrence of a Change in Control any and all options or other stock-based
compensation as referred to in Section 5.2 hereof granted to Executive (or his
assignees), to the extent not theretofore vested, unless duly assumed or
continued, shall be fully vested and, with respect to any and all shares of
stock theretofore issued to Executive bearing restrictions on transfer imposed
by Tek or the Company (rather than the impact of applicable securities laws and
regulations), such restrictions shall thereupon lapse.
11. Survival of Obligations.
Notwithstanding the expiration of the Term of Employment or the earlier
termination of this Agreement, any duty or obligation which has been incurred
and which has not been fully observed, performed and/or discharged, and any
right, unconditional or conditional, which has been created and has not been
fully enjoyed, enforced, and/or satisfied, shall survive such expiration or
termination until such duty or obligation has been fully observed, performed
and/or discharged and such right has been enforced, enjoyed and/or satisfied.
Additionally, the parties agree that the obligations set forth in Sections 7, 8
and 9 shall survive such termination or expiration in accordance with their
terms without time limitation.
12. Remedies.
12.1. The parties recognize that the provisions of Sections 7, 8 and 9 hereof
are necessary for the protection of the business and goodwill of the Company and
are considered by Executive to be reasonable to such purpose. Executive
acknowledges and agrees that money damages would not adequately compensate the
Company for any breach of these provisions and will cause the Company
substantial and irreparable damage and therefore, in the event of such a breach,
in addition to such other remedies which may be available, the Company shall
have the right to seek specific performance and injunctive relief.
12.2. In the event that any action, suit or other proceeding in law or in
equity is brought to enforce the covenants contained in Sections 7, 8 or 9
hereof, or to obtain money damages for the breach thereof, and such action
results in the award of a judgment for money damages or in the granting of any
injunction or restraining order in favor of the Company or any Affiliate, all
<PAGE>
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expenses (including reasonable attorneys' fees) of the Company or any Affiliate
in such action, suit or other proceeding shall be paid promptly by Executive.
13. Notices.
All notices or other communications hereunder shall be in writing and
shall be given by hand-delivery, overnight courier, facsimile, e-mail, or by
registered or certified mail, return receipt requested, postage prepaid, to the
other party addressed as follows:
If to the Executive: Kyle M. Tager (at the address above)
Fax: (415) 740-8558
email: [email protected]
With a copy to: Sheldon I. Hirshon, Esq.
Proskauer Rose LLP
1585 Broadway
New York, New York 10036
Fax: 212-969-2900
E-mail address: [email protected],
[email protected]
If to the Company: Big Technologies, Inc. (at the address above)
Fax: (415) 740-8558
email: [email protected]
With a copy to: Peter W. Rothberg, Esq.,
Nixon Peabody LLP
437 Madison Avenue
New York, New York 10022
Fax: 212-940-3111
E-mail address: [email protected]
Or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notices and Communications shall be
deemed to have been given or delivered three days after the date mailed in any
general or branch United States Post Office enclosed in a registered, postpaid
envelope addressed to the address of the respective parties stated above, or on
the date of hand delivery if delivered by hand provided there is an appropriate
receipt, or one day after delivery to a nationally recognized overnight carrier,
or upon delivery if delivered by facsimile or e-mail, with confirmation back.
14. Waiver.
Failure to insist upon strict compliance with any of the terms,
covenants or conditions hereof shall not be deemed a waiver of such term,
covenant or condition, nor shall any waiver or relinquishment of any right or
power hereunder at any one time or more times be deemed a waiver or
relinquishment of such right or power at any other time or times.
<PAGE>
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15. Indemnification.
15.1. General. The Company agrees that if the Executive is made a party or is
threatened to be made a party to any action, suit or proceeding, whether civil,
criminal, administrative or investigative (a "Proceeding"), by reason of the
fact that he is or was a director or officer of the Company, or any other
Affiliate or is or was serving at the request of the Company, or any other
Affiliate as a director, officer, member, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise,
including, without limitation, service with respect to employee benefit plans,
whether or not the basis of such Proceeding is alleged action in an official
capacity as a director, officer, member, employee or agent while serving as a
director, officer, member, employee or agent, he shall be indemnified and held
harmless by the Company and/or the Affiliate as permitted by and to the fullest
extent authorized by Delaware law and any other applicable law, as the same
exists or may hereafter be amended, against all Expenses (as hereinafter
defined) incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if the Executive has
ceased to be an officer, director or agent, or is no longer employed by the
Company and shall inure to the benefit of his/her heirs, executors and
administrators.
15.2. Expenses. As used in this Agreement, the term "Expenses" shall include,
without limitation, damages, losses, judgments, liabilities, fines, penalties,
excise taxes, settlements and costs, reasonable attorneys' fees, reasonable
accountants' fees, and disbursements and costs of attachment or similar bonds,
reasonable investigations, and any reasonable expenses of establishing a right
to indemnification under this Agreement.
15.3. Advances of Expenses. Expenses incurred by the Executive in connection
with any Proceeding shall be paid by the Company or the Affiliate in advance
upon request of the Executive that the Company pay such Expenses, subject to the
restrictions of Delaware law.
15.4. Notice of Claim. The Executive shall give to the Company notice of any
claim made against him for which indemnity will or could be sought under this
Agreement. In addition, the Executive shall give the Company such information
and cooperation as it may reasonably require and as shall be within the
Executive's power.
15.5. Defense of Claim. With respect to any Proceeding as to which the
Executive notifies the Company of the commencement thereof:
(a) The Company will be entitled to participate therein at its
own expense; and
(b) Except as otherwise provided, to the extent that it may
wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense
thereof, with counsel reasonably satisfactory to the
Executive (subject to Nixon Peabody LLP being hereby
approved as counsel). The Executive also shall have the
right to employ his own counsel in such action, suit or
proceeding and the fees and expenses of such counsel (which
shall be not more than one such counsel or law firm)
<PAGE>
-16-
shall be at the expense of the Company, if the Company
fails to assume the defense of the action, as aforesaid.
The Company shall not be entitled to assume the defense of
any action, suit or proceeding brought by or on behalf of
the Company or the Affiliate or as to which the Executive
shall have reasonably concluded, based on opinion of
counsel, that there exists a conflict of interest between
the Company or the Affiliate, on the one hand, and the
Executive, on the other hand, in the conduct of the defense
of such action, and Executive may engage separate counsel
in those circumstances.
(c) The Company shall not be liable to indemnify the Executive
under this Agreement for any amounts paid in settlement of
any action or claim effected without its written consent.
The Company shall not settle any action or claim in any
manner which would impose any penalty or limitation on the
Executive without Executive's written consent. Neither the
Company nor the Executive will unreasonably withhold or
delay their consent to any proposed settlement.
15.6. Non-exclusivity. The right to indemnification and the payment of
expenses incurred in defending a Proceeding in advance of its final disposition
conferred in this Section shall not be exclusive of any other right which the
Executive may have or hereafter may acquire under any statute, or any provision
of the certificate of incorporation or by-laws of any of the Company or its
Affiliates.
16. Severability.
The invalidity or unenforceability of any provisions hereof shall now
be in any affect the validity or enforceability of any other provision.
17. Modification.
This Agreement cannot be changed, modified or discharged orally, except
if consented to in writing by both parties.
18. Assignment.
18.1. The Executive. This Agreement is personal to the Executive and without
the prior express written consent of the Company shall not be assignable by the
Executive, except that the Executive's rights to receive any compensation or
benefits under this Agreement may be transferred or disposed of pursuant to
testamentary disposition, or intestate succession. This Agreement shall inure to
the benefit of and be enforceable by the Executive's heirs, beneficiaries and/or
legal representatives. The parties agree that Executive's immediate family
members are the intended third-party beneficiaries of certain provisions of this
Agreement, with the right to enforce such provisions as fully as if they were
parties to this Agreement.
<PAGE>
-17-
18.2. The Company. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors and assigns.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree in writing to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
transaction had taken place. Failure of the Company to obtain such express
assumption and agreement at or prior to the effectiveness of any such
transactions shall be a breach of this Agreement and shall entitle Executive to
compensation and benefits from the Company in the same amount and on the same
terms to which Executive would be entitled hereunder if the Company terminated
his employment without Cause, except that for purposes of implementing the
foregoing, the date on which any such transaction becomes effective shall be
deemed the date of termination. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business or assets
as aforesaid which assumes and agrees to perform this Agreement by operation of
law, or otherwise.
(b) The Company may not assign this Agreement except in connection
with, and to the acquiror of, all or substantially all of the business or assets
of the Company; provided that such acquiror expressly assumes and agrees in
writing to perform this Agreement as provided in Section 18.2(a) above.
19. Withholding.
The Company may withhold from any amounts payable under this Agreement
such as federal, state or local income taxes as shall be required to be withheld
pursuant to any applicable law or regulations.
20. Applicable Law.
This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Massachusetts applicable to contracts made and
to be performed entirely within such Commonwealth, without regard to conflicts
of law principles.
21. Contract Headings.
All headings of the Sections of this Agreement have been inserted for
convenience of reference only, are not to be considered a part of this
Agreement, and shall in no way affect the interpretation of any of the
provisions of this Agreement.
22. Entire Agreement.
The foregoing contains the entire agreement of the parties and
supersedes any prior understanding or agreement relating to the subject matter
hereof.
23. Representation.
<PAGE>
-18-
The Company represents and warrants that it is fully authorized and
empowered to enter into this Agreement and that the performance of its
obligations under this Agreement will not violate any Agreement between the
Company and any other persons, firm, organization or any applicable laws or
regulations.
<PAGE>
-19-
IN WITNESS WHEREOF, the parties have signed this Agreement the day and
year first above written.
BIG TECHNOLOGIES, INC.
By:______________________________________
By:______________________________________
Kyle M. Tager
TEKINSIGHT.COM, INC.
By:______________________________________
Exhibit 10.3
NON-COMPETITION, CONFIDENTIALITY AND
INVENTIONS AGREEMENT
THIS AGREEMENT, made as of May 17, 2000 by and between Big
Technologies, Inc., a Delaware corporation (the "Company"), and ________________
("Employee").
W I T N E S S E T H T H A T:
WHEREAS, the Company is engaged in the business of providing Web
development and other consulting services to clients;
WHEREAS, the Company's business depends upon the continued
confidentiality of its proprietary information, including, without limitation,
its trade secrets, know-how and other technology and intellectual property
relating to the services it provides and the details of its business
relationships with customers, suppliers and other third parties, and all other
non-public information;
WHEREAS, Employee will be employed by the Company in a capacity in
which Employee will become familiar with the Company's proprietary and
confidential information and the Company is willing to initiate the employment
only if Employee assents to the terms hereof; and
WHEREAS, Employee desires to be employed by the Company and to receive
all of the benefits appurtenant to such employment,
NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Company and Employee
hereby agree as follows:
1. Non-Competition. During Employee's employment by the Company and for
a period of 1 year following the termination of Employee's employment with the
Company for any reason, whether such termination is voluntary or involuntary,
with or without cause, Employee will not directly or indirectly, either as
principal, agent, employee, consultant, officer, director, stockholder, lender
or in any other capacity:
(a) engage in or have a financial interest in any business which is
competitive with the business of the Company; provided, however, that nothing
contained herein shall preclude the Employee from purchasing or owning less than
five percent (5%) of the stock or other securities of any company with
publicly-held securities; or
(b) contact or solicit any employee, consultant, independent
contractor, or agent of the Company with the intention or effect of encouraging
such party to terminate his or her employment, agency or other relationship, as
applicable, with the Company; or
(c) contact or otherwise solicit, accept business from, or compete for
existing or prospective customers or suppliers, licensors or licensees,
franchisors or franchisees of the Company with the intention or effect of
encouraging such party to
<PAGE>
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terminate or reduce the volume of its business with the Company or to place any
portion of its business elsewhere.
For the purposes hereof, a business will be deemed competitive with the
business of the Company or in competition with the Company if it is carried on
anywhere in the United States and Canada or other parts of North America and if
it involves the performing of services and/or the production, manufacture,
distribution, sale or development of any product similar to services performed
or products produced, manufactured, distributed, sold or developed or being
developed by the Company relating to the development of Web sites or
applications accessible over the Internet for local and state governments or for
not-for-profit entities (the "Work Scope") and/or the licensing of any process
or technology similar to those utilized, developed or being developed by the
Company during the period in which Employee is employed or otherwise affiliated
with the Company. Determination of whether services are within the Work Scope
shall be solely within the reasonable discretion of the Company's Board of
Directors, whose decisions will be final and binding, absent a non-appealable
final order by a court with jurisdiction that such Board of Directors acted
unreasonably.
Employee acknowledges and agrees that strict enforcement of the terms
of this Agreement is necessary for the purpose of ensuring the preservation,
protection and continuity of the business, trade secrets and goodwill of the
Company and that, in furtherance of such purpose, the prohibition against
competition imposed by this Section 1 is narrow, reasonable and fair. If any
part of this Section 1 should be determined by a court of competent jurisdiction
to be unreasonable in duration, geographic area, or scope, then this Agreement
is intended to and shall extend only for such period of time, in such area
and/or with respect to such activities as are determined to be reasonable by
such court.
2. Confidential Information.
(a) During the term of Employee's employment by the Company, or at any
time following the termination of Employee's employment by the Company, for any
or no reason, whether voluntary or involuntary, with or without cause, Employee
will not, without the express prior written consent of the Company, disclose to
others, use or publish (other than as may be required by Employee's duties while
employed by the Company in the ordinary course of the Company's business) any
proprietary, secret or confidential information of the Company ("Company
Information"), which for the purposes hereof shall include, without limitation,
information designated by the Company as "proprietary," "secret," or
"confidential" (or otherwise similarly designated) or information which is not
generally known to those outside of the Company detailing, listing, describing
or otherwise relating to:
(i) the business, conduct or operations of the Company or any
of the Company's customers, licensors, licensees, suppliers, consultants or
employees; or
(ii) any materials, devices, processes, methods, ways of
business, programs, and/or formulae, technology, research, development, lists
naming the parties in the categories described in Section 2(a)(i) hereof and the
like, used in organizing, promoting, conducting, managing or exploiting the
Company's products or services; or
<PAGE>
-3-
(iii) the existence or betterment of, or possible new uses or
applications for, any of the Company's products or services. The obligations of
confidentiality set forth in this Section 2 extend to any proprietary
information of any third parties contracting with the Company whether or not the
Company has undertaken an express obligation of confidentiality with regard to
such persons.
(b) Upon the termination of Employee's employment by the Company,
Employee agrees that Employee will not take from (nor keep copies or duplicates
of), but will promptly return to the Company, any drawings, notes, plans, lists,
computer programs or files, blueprints, letters, writings or any other documents
whatsoever or reproductions thereof recording, reflecting or embodying any
Company Information.
(c) Employee acknowledges that the Company is now and may hereafter be
subject to non-disclosure or confidentiality agreements with third persons or
entities pursuant to which the Company must protect or refrain from use of
proprietary information which is the property of such third persons. Employee
hereby agrees upon the direction of the Company to be bound by the terms of such
agreements in the event Employee has access to the proprietary information
protected thereunder to the same extent as if Employee was an original
individual signatory thereto.
(d) Notwithstanding the foregoing, the term Company Information shall
not apply to information (u) Employee is compelled pursuant to an order of a
court or other body having jurisdiction over such matter to do so (in which case
the Company shall be given prompt written notice of such intention to divulge
not less that five (5) days prior to such disclosure or such shorter period as
the circumstances may reasonably permit), (v) which the Company or an Affiliate
has voluntarily disclosed to the public without restriction, (w) which has
otherwise lawfully entered the public domain, (x) which the Company or an
Affiliate has permitted Employee to disclose by its prior written consent; or
(y) which Employee may disclose at a forum, workshop or round table conference
with the prior knowledge and consent of the Company.
3. Rights to Intellectual Property.
(a) Any and all inventions, processes, procedures, systems,
discoveries, designs, configurations, technology, works of authorship (including
but not limited to computer programs), trade secrets and improvements (whether
or not patentable and whether or not they are made, conceived or reduced to
practice during working hours or using the Company's data or facilities)
(collectively, the "Inventions") which Employee makes, conceives, reduces to
practice, or otherwise acquires during the term of this Agreement (either solely
or jointly with others), and which are related to the Company's present or
planned business, services or products, shall be the sole property of the
Company and shall at all times and for all purposes be regarded as acquired and
held by Employee in a fiduciary capacity for the sole benefit of the Company.
All Inventions that consist of works of authorship capable of protection under
copyright laws shall be prepared by Employee as "works made for hire", with the
understanding that the Company shall own all of the exclusive rights to such
works of authorship under the United States copyright law and all international
copyright conventions and foreign laws. Employee hereby assigns to the Company,
<PAGE>
-4-
without further compensation, all such Inventions and any and all patents,
copyrights, trademarks, trade names or applications therefor, in the United
States and elsewhere, relating thereto. Employee shall promptly disclose to the
Company and to no other party all such Inventions and shall assist the Company
for its own benefit in obtaining and enforcing patents and copyright
registrations on such Inventions in all countries. Upon request, Employee shall
execute all applications, assignments, instruments and papers and perform all
acts (such as the giving of testimony in interference proceedings and
infringement suits or other litigation) necessary or desired by the Company to
enable the Company and its successors, assigns and nominees to secure and enjoy
the full benefits and advantages of such Inventions.
(b) In the event the Company is unable, after reasonable effort, to
secure Employee's signature on any document or instrument necessary to secure
trademarks, letters patent, copyrights or other analogous protection relating to
an Invention, whether because of Employee's physical or mental incapacity or for
any other reason whatsoever, Employee hereby irrevocably designates and appoints
the Company and its duly authorized officers and agents as Employee's agent and
attorney-in-fact, to act for and in Employee's behalf and stead to execute and
file any such application or applications and to do all other lawfully permitted
acts to further the prosecution and issuance of trademarks, letters patent,
copyright or other analogous protection thereon with the same legal force and
effect as if executed by Employee.
4. No Conflicting Obligation. Employee hereby represents and warrants
to the Company that Employee (i) is not presently under and will not hereafter
become subject to any obligation to any person which is inconsistent or in
conflict with this Agreement or which would prevent, limit or impair in any way
Employee's performance of Employee's obligations hereunder and (ii) has not
disclosed and will not disclose to the Company, nor use for the Company's
benefit, any confidential information or trade secrets of any prior employer or
principal, unless and until such confidential information and trade secrets have
become public knowledge without Employee's participation, or unless such
disclosure is expressly permitted by any agreement with such prior employer or
principal.
5. Governing Law; Severability. This Agreement and the rights and
obligations of the parties hereunder shall be governed by and construed
according to the laws of the State of New York without giving effect to choice
or conflict of law provisions. If any term or provision of this Agreement, or
the application thereof to any person or circumstance, shall, for any reason and
to any extent, be declared invalid or unenforceable by a court of competent
jurisdiction, the remainder of this Agreement and the application of such
provisions to other persons or circumstances shall not be affected thereby, but
rather shall be enforced to the fullest extent permitted by law.
6. Injunctive Relief. Employee hereby expressly acknowledges and agrees
that any breach or threatened breach of any of the terms set forth in Sections
1, 2 or 3 of this Agreement may result in significant and irreparable damage to
the Company. Therefore, Employee hereby agrees that the Company shall be
entitled, in addition to any other remedies available at law, to injunctive or
other equitable relief by a court of appropriate jurisdiction in the event of
any breach or threatened breach of the terms
<PAGE>
-5-
of Sections 1, 2 or 3 of this Agreement. If any such action is brought by the
Company to enforce, or seek damages for the violation of, the provisions of this
Agreement, and the Company prevails in such action, Employee shall be obligated
to pay to the Company all costs and expenses, including actual attorneys' fees,
incurred therein by the Company, and such costs, expenses and attorneys' fees
shall be included in and as a part of such judgment or award; and the
determination by the judge in such action shall be conclusive on the matter of
whether the Company prevailed for purposes hereof.
7. Amendments; Waiver; Counterparts. No amendment or alteration of the
terms of this Agreement shall be valid or binding unless made in a writing
signed by each of the parties to this Agreement specifically referring to this
Agreement. No failure or delay in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such power, right or privilege preclude any other or further
exercise thereof. This Agreement may be executed in one or more counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which together
shall constitute one and the same instrument.
8. Entire Agreement; Binding Effect. This Agreement contains the entire
agreement of the parties hereto with respect to the subject matter hereof and
shall be binding upon and inure to the benefit of the Company and any affiliate
thereof and Employee and their respective successors and assigns and legal
representatives.
9. Advice of Counsel. Employee acknowledges that Employee has been
advised by the Company to review the terms of this Agreement with legal counsel
of Employee's choice and that he/she has been given reasonable opportunity to
seek such legal advice. The parties hereto acknowledge and agree that: (i) each
party and their counsel have (or had the opportunity to have) reviewed and
negotiated the terms and provisions of this Agreement and have contributed to
its revision; (ii) the rule of construction to the effect that any ambiguities
are resolved against the drafting party shall not be employed in the
interpretation of this Agreement; and (iii) the terms and provisions of this
Agreement shall be construed fairly as to all parties hereto and not in favor of
or against any party, regardless of which party was generally responsible for
the preparation of this Agreement.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed under seal by its duly authorized representative and Employee has
executed this Agreement under seal on the date first above written.
BIG TECHNOLOGIES, INC.
By:____________________________________
Its:____________________________________
ACKNOWLEDGED AND CONSENTED TO:
________________________________
[Employee]
Exhibit 99.1
Filed by TekInsight.com,Inc.
pursuant to Rule 425 under the Securities
Act of 1933, as amended.
Subject Company: Data Systems Network
Corporation
Commission File No.: 33-336044
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION, CONTACT:
Melissa Beck
Edelman Public Relations Worldwide
312-240-3376
[email protected]
Julie Hall
Edelman Public Relations Worldwide
312-297-7525
[email protected]
TEKINSIGHT.COM CLOSES ACQUISITION OF BIGTECHNOLOGIES, INC.
Acquisition enhances TekInsight's state
and local government technology initiatives
NEW YORK - MAY 17, 2000 - TekInsight.com (NASDAQ: TEKS-TEKSW), announced today
the closing of its acquisition of bigtechnologies, Inc., an Internet solutions
firm specializing in the development of e-government sites with advanced
transactional applications. bigtechnologies' stockholders received $1.05 million
in market value of TekInsight.com's common stock, $150,000 in cash and an
incentive plan which could earn an additional $650,000 in market value of
TekInsight.com's common stock. The original letter of intent was signed on March
30.
"States, municipalities and government agencies that have taken advantage of the
Internet by offering online services to its constituents are already receiving
political and economic benefits," said Kyle Tager, President of bigtechnologies,
Inc. "Although the e-government business is in its infancy, as TekInsight.com we
look forward to working with more cities across the country by helping them
deliver excellent customer service with online governmental offerings such as
permitting, licensing, deeds and tax/violation payments."
Since 1995, bigtechnologies has served the unique content and transactional
needs of municipal agencies, enhancing communications between governments and
constituents, saving both parties time and money. The firm works in conjunction
with state and local government MIS departments to create Web sites and specific
applications tailored to the unique needs of their constituents.
bigtechnologies' most notable municipal sites are the City of Boston
(www.cityofboston.com) and Suffolk County Registry of Deeds
(www.suffolkdeeds.com).
"With the acquisition of bigtechnologies, one of the premier companies to make
an impact in the e-government industry, TekInsight has gained a significant lead
in this new explosive area," said Alexander Kalpaxis, Chairman and CTO of
TekInsight.com. "An increasing number of local governments are serving
constituents via the Web. Similar to
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private sector companies, governmental organizations are realizing that to offer
their services online, they must give government workers the tools to manage
that interaction in real-time. Our Streaming XML(TM) technology will be an
essential component in implementing e-business services for state and local
governments."
bigtechnologies has received awards from Government Technology Magazine for the
"Best of the Web" in local government, Yahoo! Internet Life for a perfect "10"
in content development and first place for innovation on the Web from Public
Technology, Inc.
In January, TekInsight.com announced its intent to acquire Data Systems (Press
Release dated 1/20/00), a leading provider of enterprise services, with a
customer base that is also focused in the state and local government arena.
ABOUT TEKINSIGHT.COM
TekInsight.com is a world-class Internet development company that offers
software and services based on its Streaming XML(TM) technology, which harnesses
the vast amount of information by streaming it into XML and compressing the
format for real-time storage and presentation. TekInsight's customers include
Microsoft, IBM and other Fortune 500 companies. The company's proprietary
technology includes various web-based diagnostic software agents and web-based
e-commerce performance and analysis tools. In April 2000, TekInsight.com, Inc.
announced the availability of its first of several software agents,
BugSolver(TM) Developer. BugSolver Developer helps software development
personnel provide virtually instant, accurate answers to desktop/mobile computer
users when a hardware or software failure occurs.
# # #
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that
certain statements in this release are "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and involve
known and unknown risks, uncertainties and other factors. Such uncertainties and
risks include, among others, certain risks associated with the operation of the
company described above, government regulation, and general economic and
business conditions. Actual events, circumstances, effects and results may be
materially different from the results, performance or achievements expressed or
implied by the forward-looking statements. Consequently, the forward looking
statements contained herein should not be regarded as representations by
TekInsight.com, or any other person that the projected outcomes can or will be
achieved.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
TekInsight.com filed a Registration Statement on SEC Form S-4 in connection with
the merger on May 1, 2000 (SEC file # 33-336044), and TekInsight.com and Data
Systems expect to mail a Joint Proxy Statement/Prospectus to shareholders of
TekInsight.com and Data Systems containing information about the merger.
Investors and shareholders are urged to read the Registration Statement and the
Joint Proxy Statement/Prospectus. The Registration Statement and the Joint Proxy
Statement/Prospectus contain important information about TekInsight.com, Data
Systems, the merger, the persons soliciting proxies relating to the merger,
their interests in the merger, and other related matters. TekInsight and its
officers and directors may be deemed participants in the solicitation of proxies
from its stockholders with respect to the transactions contemplated by the
merger agreement and may have an interest either directly or
<PAGE>
-3-
indirectly by virtue of their security holdings or otherwise. Information
regarding such officers and directors is included in the Registration Statement
and the Joint Proxy Statement/ Prospectus. Data Systems and its officers and
directors may be deemed to be participants in the solicitation of proxies from
stockholders of Data Systems with respect to the transactions contemplated by
the merger agreement and may have an interest either directly or indirectly by
virtue of their security holdings or otherwise. Information regarding such
officers and directors is included in the Registration Statement and the Joint
Proxy Statement/Prospectus Investors and shareholders will be able to obtain
free copies of these documents through the website maintained by the U.S.
Securities and Exchange Commission at http://www.sec.gov. Free copies of the
Joint Proxy Statement/Prospectus and these other documents may also be obtained
from TekInsight.com by directing a request to TekInsight.com, Inc., 5 Hanover
Square, 24th Floor, New York, New York 10004, attention: Arion Kalpaxis,
telephone: (212) 278-8520.
In addition to the Registration Statement and the Joint Proxy
Statement/Prospectus, TekInsight.com and Data Systems file annual, quarterly and
special reports, proxy statements and other information with the Securities and
Exchange Commission. You may read and copy any reports, statements or other
information filed by TekInsight.com or Data Systems at the SEC's public
reference room at 450 Fifth Street, N.W., Washington D.C. 20549 or at any of the
Commission's other public reference rooms in New York, New York and Chicago,
Illinois. Please call the Commission at 1-800-SEC-0330 for further information
on the public reference rooms. TekInsight.com's and Data Systems' filings with
the SEC are also available to the public from commercial document-retrieval
services and at the Web site maintained by the SEC at http://www.sec.gov
Filed by TekInsight.com,Inc.
pursuant to Rule 425 under the Securities
Act of 1933, as amended.
Subject Company: Data Systems Network
Corporation
Commission File No.: 33-336044
FOR IMMEDIATE RELEASE
FOR MORE INFORMATION, CONTACT:
Melissa Beck
Edelman Public Relations Worldwide
312-240-3376
[email protected]
Julie Hall
Edelman Public Relations Worldwide
312-297-7525
[email protected]
TEKINSIGHT.COM LAUNCHES TEKINSIGHT E-GOVERNMENT SERVICES
New e-government unit uses extensive experience to build Internet-enabled
infrastructure and applications for state and local government
NEW YORK - MAY 18, 2000 - TekInsight.com (NASDAQ: TEKS-TEKSW), an Internet
development company that offers software and services based on its Streaming
XML(TM) technology and Data Systems Network Corporation (OTCBB: DSYS), a
provider of enterprise services with a focus on state and local governments,
announced today the formation of TekInsight e-Government Services
(http://egov.tekinsight.com), a joint marketing effort design to serve large and
medium-sized municipalities, states and government agencies. In January 2000,
TekInsight announced the intent to acquire Data Systems.
The formation of TekInsight e-Government Services follows TekInsight's
announcement that the company has completed the acquisition of bigtechnologies,
Inc., an Internet solutions firm specializing in the development of e-government
sites with advanced transactional applications, such as the one built for the
City of Boston.
"The Internet has changed the way the world conducts business, and it was only a
matter of time before governments looking to increase efficiency and deliver
better service followed suit. States, municipalities and government agencies
that have taken advantage of the Internet by offering online services to their
constituents are already receiving political and economic benefits," said Kyle
Tager, General Manager of TekInsight e-Government Services.
Tager continued, "We understand that government works because of the hard work
of committed employees. TekInsight e-Government Services is designed to make
their jobs easier, so they can make the lives of their constituents easier.
Ultimately, the people are what it's all about. And many of them have grown
cynical, expecting the worst in their dealings with government, and often
getting just that. If governments take steps to
<PAGE>
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increase their efficiency and reduce their operating costs while providing
better, faster service, we're confident many of these people will change their
views."
Public Technology, Inc. (PTI) estimates that the majority of local governments
will be looking to take transactions online in the next year and virtually all
large and medium-sized governments will be looking to conduct online
transactions by 2002.
"Similar to private sector companies, governmental organizations are realizing
that to offer their services online, they must develop new ways to serve people
online," said Alexander Kalpaxis, Chairman and CTO of TekInsight.com.
"TekInsight's unique Streaming XML(TM) technology will let government workers
provide those services in real-time while allowing more cost-effective
development and deployment of their e-Government Services."
The TekInsight e-Government Services team first creates the municipality's Web
site, if the site is not already developed. After Web site development,
TekInsight will create and install an e-Government Operating System (OS), which
contains all of the important security features, including encryption, digital
signatures, imaging, credit card payment validation, and integration necessary
to protect constituents' transactions. The e-Government OS also allows employees
to access a server to locate a variety of "back-end" forms, enabling easy
updates to items such as community calendars, job postings, press releases and
directories.
Once the e-Government OS is installed, the e-Government Services team utilizes a
unique suite of software modules, each providing a different online service
tailored to the unique needs of the specific government's constituents. The
modules are "hooked" into existing Web sites and databases, allowing for a
seamless, real-time transfer of information. Additional modules will be added in
the future. Current modules include:
o Tax/Violation Payments - Addresses all types of taxes and violations,
allowing constituents to browse through pertinent information, look up what
he or she owes, and make payments, all from the comfort of their home. And
by utilizing back-end user tools, government employees can search for
payments made, reconcile, post information, and create user-designed
reports.
o Permitting - This module is especially useful if a person is renovating a
house or starting a business. Individuals and businesses can file permits
online, 24 hours a day. Fees, if any, can be paid with a credit card, and
back-end forms enable government employees to view and approve applications
online.
o Licensing - Provides forms in which the government can display information
about how to obtain a license, the proper documentation required, and any
renewal guidelines. The licensing module allows users to apply online for
documents such as incorporation papers, driver's license renewals and
marriage certificates.
<PAGE>
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o Deeds - Allows individuals to access all information pertaining to a deed
and to view the actual deed images online prior to requesting certified
copies. The deed module allows the government to accept payments for those
copies.
o Procurement - A major activity that all governments have in common is the
need to procure items. Requests for Proposal (RFPs) are placed online to
ensure maximum distribution. Each can be downloaded, printed and sent back
through the mail or online. Customized reports can sort the responses for
easy review and award. This module is currently under development.
o My Government - With the "My Government" module, all of a constituent's
information, from every department, can be found in one centralized
location. For example, a user can verify that a payment was credited,
search for the name of the local police captain, find out when certain
voting polls close and discover whether his or her home remodeling permit
application was approved.
The e-Government Services team can also install freestanding e-kiosks in
conveniently accessible areas. This will benefit those constituents that do not
have access to a computer, bridging the digital divide allowing for better
service to all of a government's constituents.
TekInsight e-Government Services' people have 15 years of experience installing
and upgrading total systems for government, in a quick and efficient fashion.
Successful implementations include e-Government initiatives with the City of
Boston (www.cityofboston.com), the Suffolk County Registry of Deeds
(www.suffolkdeeds.com), the State of Florida and the State of Louisiana.
AWARD-WINNING E-GOVERNMENT EXPERIENCE
The City of Boston e-government program has received awards from Government
Technology Magazine for the "Best of the Web" in local government, Yahoo!
Internet Life for a perfect "10" in content development and first place for
innovation on the web from Public Technology, Inc. (PTI).
TekInsight e-Government Services engagements include application development,
integration and support. TekInsight e-Government systems include full management
and trending features that allow for continuous status and performance
monitoring, ensuring that systems are highly available and running at peak
performance. Technical support help desks are available, 24 hours per day, seven
days a week.
ABOUT TEKINSIGHT.COM
TekInsight.com is a world-class Internet development company that offers
software and services based on its Streaming XML(TM) technology, which harnesses
the vast amount of information by streaming it into XML and compressing the
format for real-time storage and presentation. TekInsight's customers include
the city of Boston, state of Louisiana,
<PAGE>
-4-
state of New York, state of Florida, Microsoft, IBM and other Fortune 500
companies. The company's proprietary technology includes various web-based
diagnostic software agents and web-based e-commerce performance and analysis
tools. In April 2000, TekInsight.com, Inc. announced the availability of its
first of several software agents, BugSolver(TM) Developer. BugSolver Developer
helps software development personnel provide virtually instant, accurate answers
to desktop/mobile computer users when a hardware or software failure occurs.
ABOUT DATA SYSTEMS NETWORK CORPORATION
Data Systems Network Corporation has more than 14 years of experience providing
strategic technology solutions to Fortune 1000 companies and state and local
government agencies. The company provides a wide range of services, including
Applications Development, Network Services, Enterprise Management, Help Desk and
E-Commerce Services. Data Systems utilizes TekInsight.com's Streaming XML(TM)
technology to rapidly develop applications and solutions for clients. For more
information, please visit WWW.DATASYSTEMS.COM.
# # #
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities Exchange Act of 1934, as amended, which are intended to be
covered by the safe harbors created thereby. Investors are cautioned that
certain statements in this release are "forward looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995 and involve
known and unknown risks, uncertainties and other factors. Such uncertainties and
risks include, among others, certain risks associated with the operation of the
company described above, government regulation, and general economic and
business conditions. Actual events, circumstances, effects and results may be
materially different from the results, performance or achievements expressed or
implied by the forward-looking statements. Consequently, the forward looking
statements contained herein should not be regarded as representations by
TekInsight.com, or any other person that the projected outcomes can or will be
achieved.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
TekInsight.com filed a Registration Statement on SEC Form S-4 in connection with
the merger on May 1, 2000 (SEC file # 33-336044), and TekInsight.com and Data
Systems expect to mail a Joint Proxy Statement/Prospectus to shareholders of
TekInsight.com and Data Systems containing information about the merger.
Investors and shareholders are urged to read the Registration Statement and the
Joint Proxy Statement/Prospectus. The Registration Statement and the Joint Proxy
Statement/Prospectus contain important information about TekInsight.com, Data
Systems, the merger, the persons soliciting proxies relating to the merger,
their interests in the merger, and other related matters. TekInsight and its
officers and directors may be deemed participants in the solicitation of proxies
from its stockholders with respect to the transactions contemplated by the
merger agreement and may have an interest either directly or indirectly by
virtue of their security holdings or otherwise. Information regarding such
officers and directors is included in the Registration Statement and the Joint
Proxy Statement/ Prospectus. Data Systems and its officers and directors may be
deemed to be participants in the solicitation of proxies from stockholders of
Data Systems with respect to the transactions contemplated by the merger
agreement and may have an interest either directly or indirectly by virtue of
their security holdings or otherwise. Information regarding such officers and
directors is included in the Registration Statement and the Joint Proxy
Statement/Prospectus. Investors and shareholders will be able to obtain free
copies of these documents through the website maintained by the U.S. Securities
and Exchange Commission at http://www.sec.gov. Free copies of the Joint Proxy
Statement/Prospectus and these other documents may
<PAGE>
-5-
also be obtained from TekInsight.com by directing a request to TekInsight.com,
Inc., 5 Hanover Square, 24th Floor, New York, New York 10004, attention: Arion
Kalpaxis, telephone: (212) 278-8520.
In addition to the Registration Statement and the Joint Proxy
Statement/Prospectus, TekInsight.com and Data Systems file annual, quarterly and
special reports, proxy statements and other information with the Securities and
Exchange Commission. You may read and copy any reports, statements or other
information filed by TekInsight.com or Data Systems at the SEC's public
reference room at 450 Fifth Street, N.W., Washington D.C. 20549 or at any of the
Commission's other public reference rooms in New York, New York and Chicago,
Illinois. Please call the Commission at 1-800-SEC-0330 for further information
on the public reference rooms. TekInsight.com's and Data Systems' filings with
the SEC are also available to the public from commercial document-retrieval
services and at the Web site maintained by the SEC at http://www.sec.gov
