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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): April 9, 1997.
CYBERGUARD CORPORATION
(Exact name of registrant as specified in its charter)
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FLORIDA
(State or other 65-0510339
jurisdiction of 0-24544 (IRS Employer
incorporation (Commission File Number) Identification No.)
2101 WEST CYPRESS CREEK ROAD, FORT LAUDERDALE, FLORIDA 33309
(Address of principal executive offices) (Zip code)
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Registrant's telephone number, including area code: (305) 974-1700
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On April 9, 1997, the Registrant, through its wholly owned subsidiary,
TradeWave Corporation, a Florida corporation (the "Buyer"), acquired
substantially all the assets of TradeWave Corporation, a Delaware corporation
(the "Seller"). Seller is a wholly owned subsidiary of SunRiver Corporation. The
purchased assets relate to the design, production and marketing of a suite of
software products that enable businesses to design and implement public-key
security network security systems for use across TCP/IP-based networks,
including the Internet and corporate intranets (the acquisition of such assets,
as described herein, is referred to as the "Acquisition"). The Acquisition
included all rights in and to the Seller's intellectual property, including all
versions and derivative works of software designed by the Seller in its
business. A significant user of the purchased technology includes the Open
Access Same-time Information System (or "OASIS"), a federally mandated system
for the purchase by public utilities of capacity in power transmission lines.
The Acquisition was effected pursuant to an Asset Purchase Agreement dated as of
April 9, 1997 (the "Acquisition Agreement") between Buyer and Seller. The
purchase price was approximately $350,000 paid in cash plus 3% of Buyer's
revenues (the "Royalty Consideration") over the two-year period following the
closing of the Acquisition that are attributable to OASIS (the Buyer may at any
time terminate its obligation to pay any further Royalty Consideration by paying
Seller $200,000). In connection with the Acquisition, the Seller and its
corporate parent entered into a three-year noncompetition agreement with the
Buyer.
The Registrant capitalized the Buyer for purposes of the Acquisition using the
Registrant's own funds. The Buyer intends to continue for the foreseeable future
the uses to which the assets were devoted immediately prior to the Acquisition.
The Buyer intends to continue the business of the Seller at its current location
in Austin, Texas, where the Seller and all of the purchased assets are located.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
The following financial statements, pro forma financial information and
exhibits are filed as part of this Form 8-K:
(a) Financial Statements.
(b) It is not practical to provide financial information required
to be filed on account of the Acquisition (the "Financial Information") on the
date that this report is being filed with the Securities and Exchange
Commission. The Financial Information will be filed by amendment to this Form
8-K as soon as practicable, but in any event not later than June 9, 1997.
(c) Pro Forma Financial Information.
It is not practical to provide the pro forma financial information
required to be filed on account of the Acquisition (the "Pro Forma Information")
on the date that this report is being filed with the Securities and Exchange
Commission. The Pro Forma Information will be filed by amendment to this Form
8-K as soon as practicable, but in any event not later June 9, 1997.
(d) Exhibits.
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EXHIBIT NO. DESCRIPTION
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10.1 Asset Purchase Agreement
10.2 Agreement (regarding noncompetition, nonsolicitation and
confidentiality)
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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 thereunto duly authorized.
CYBERGUARD CORPORATION
By: /s/ Patrick O. Wheeler
-------------------------------
Patrick O. Wheeler
Vice President and Chief
Financial Officer
Dated: April 23, 1997
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Exhibit 10.1
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ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT ("AGREEMENT") is dated as of April 9,
1997, by and between TradeWave Corporation ("BUYER"), a Florida corporation and
wholly owned subsidiary of CyberGuard Corporation ("CYBERGUARD"), a Florida
corporation, having its principal place of business at 2101 West Cypress Creek
Road, Fort Lauderdale, Florida, and TradeWave Corporation, a Delaware
corporation ("SELLER"), having its principal place of business at 3636 Executive
Center Drive, Suite 100, Austin, TX 78731.
Seller is engaged solely in the business of developing, marketing,
licensing and supporting a suite of software products and related services (the
"BUSINESS"). The parties have entered into a letter of intent dated March 13,
1997 (the "LETTER OF INTENT") providing for, among other things, the purchase by
Buyer of certain of the Seller's assets. Seller wishes to sell, and Buyer wishes
to purchase, substantially all of the assets of Seller (as more fully described
below) and assume certain liabilities of the Business, for the purchase price
and upon the terms and subject to the conditions described in this Agreement,
and to terminate the Letter of Intent.
In consideration of the premises and the mutual promises, terms, and
conditions herein made, the parties, intending to be legally bound, agree as
follows:
1. Assets. Subject to the terms and conditions of this Agreement,
at the Closing (as defined in Paragraph hereof), Seller shall sell to Buyer, and
Buyer shall purchase from Seller, all those assets, properties, privileges,
rights, interests, business and goodwill owned by Seller or in which Seller has
an interest (except the Excluded Assets, as such term in defined in Paragraph 2.
hereof) that are used or held for use in connection with the operation of the
Business, of every kind and description, real, personal and mixed, tangible and
intangible and wherever located (the assets, properties, privileges, rights,
interests, business and goodwill being transferred hereunder are hereinafter
referred to collectively as the "ASSETS"), free and clear of any liability,
debt, mortgage, security interest, lien, claim, encumbrance, title defect,
pledge, charge, assessment, covenant, royalty obligation, encroachment and
burdens of any kind or nature whatsoever (collectively, "ENCUMBRANCES") other
than the Assumed Liabilities (as defined below). Without limiting the generality
of the foregoing, the Assets shall include all of Seller's right, title and
interest in and to the following (except to the extent any of the following
constitute Excluded Assets):
(a) Those assets appearing on Schedule hereto;
(b) Seller's accounts receivable as shown on Seller's
unaudited March 10, 1997 balance sheet (the "BALANCE SHEET") and any
accounts receivable previously written off.;
(c) Seller's cash on hand on the Closing Date;
(d) all other non-current assets of Seller, including
without limitation, property, plant, fixtures, inventories and supplies
(including building service and mechanical supplies), machinery and
equipment (including all spare parts), vehicles, furniture and
furnishings, fixtures, displays, office equipment, computers, telephone
systems, tools,
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memorabilia, leasehold improvements, tangible personal property and
current operational systems such as the certificate authority server;
(e) The Business and its permits, licenses, telephone
numbers, customer lists, vendor lists, advertising material and data,
restrictive covenants, choses in action, rights of recovery, rights of
recoupment, together with all books, computer software, files, papers,
records and other data of Seller relating to its assets, properties,
business and operations;
(f) all of Seller's right, title and interest in and to
those Seller Contracts listed on Schedule 6.(g) hereto that are not
listed on Schedule hereto as Excluded Assets (the "ASSUMED CONTRACTS");
(g) All of Seller's right, title and interest in and to
all intellectual property used in, or necessary to conduct the Business
(collectively "INTELLECTUAL PROPERTY"), including without limitation,
rights worldwide to all trademarks, copyrights, service marks, trade
names, patents, licenses, mask works, trade secrets, schematics,
sketches, designs, notebooks, reports, memoranda, drafts, worksheets,
procedures, technology, source code, computer software programs,
know-how, documentation, support materials, customer lists, files,
"golden master" and any inventory of TradeVPI and other program
products, and any other physical or electronic forms of information,
and, without limiting the generality of the foregoing, all worldwide
copyrights in and to TradeVPI, its source code, the documentation
and/or the end-user documentation whether registered or unregistered,
vested or inchoate, and including the right to sue and recover damages
for infringements and including any past infringements and any such
rights acquired by Seller between the date hereof and the Closing Date;
(h) All of Seller's utility, security and other deposits;
(i) All rights and incidents in and to all licenses,
permits and approvals (other than corporate charters and qualifications
to do business) issued by any governmental body relating to the
Business and in effect as of the Closing Date, which are capable of
being transferred; and
(j) All of Seller's right and incidents of interest
arising in connection with the Assumed Liabilities, including all
deposits and reserves relating thereto.
Notwithstanding anything to the contrary in this Agreement, Seller does
not represent or warrant to Buyer that there exist any assets of Seller other
than those set forth on Schedule hereto.
2. Excluded Assets. Notwithstanding anything to the contrary in
Paragraph hereof, Seller shall not be obligated to sell, convey, grant, assign,
transfer or deliver to Buyer any of the assets (referred to herein collectively
as the "EXCLUDED ASSETS") set forth on Schedule 2. hereto, all of which shall be
retained by Seller as its personal property and shall not be sold or conveyed to
Buyer hereunder.
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3. Assumption of Certain Liabilities.
(a) At the Closing, Buyer shall assume all the following
liabilities (the "ASSUMED LIABILITIES"):
(i) the assumption of liabilities under the
Assumed Contracts to the extent that such liabilities arise
after the Closing and to the extent such liabilities are based
on the terms of such Assumed Contracts.
(ii) the assumption of customer service
requirements represented as "deferred revenue" on the Balance
Sheet up to a maximum amount of $
(iii) the assumption by Buyer of that certain
original lease dated May 4, 1995 with Koger Equity,
Incorporated (having an initial occupancy date of July 1,
1995) at the rate currently in effect thereunder and for a
period no longer than the leasehold interest currently held by
Seller pursuant thereto (the "FACILITIES LEASE").
(b) Except for the Assumed Liabilities, Buyer shall not
assume nor be liable for, nor shall Buyer be deemed to have assumed or
to be liable for, any other liabilities or obligations of Seller, fixed
or contingent, known or unknown, matured or unmatured, liquidated or
unliquidated, secured or unsecured, whether arising prior to, on or
after the Closing.
(c) The assumption by Buyer of the Assumed Liabilities
shall not enlarge any rights or remedies of any third parties under any
contracts or arrangements with Seller, except to the extent the other
party or parties to an Assumed Contract may become able to enforce such
obligations against Buyer.
4. Purchase Price. In full consideration for the Assets and the
covenants, representations and warranties contained in this Agreement and any
ancillary Agreement, Buyer shall pay to Seller an initial aggregate purchase
price as follows:
(a) Buyer shall pay to Seller by wire transfer or
otherwise in immediately available funds the amount (the "CASH
CONSIDERATION") of Four Hundred Thousand Dollars ($400,000) less 10/12
of certificate authority cash receipts for the period January 1, 1997
through March 10, 1997 and less the amount of any "ADVANCE" (as such
term is defined in Paragraph below) up to a maximum amount of $220,000;
and
(b) Buyer shall pay to Seller a royalty (the "ROYALTY
CONSIDERATION") of 3% of certificate authority revenues related to
OASIS (as defined in Paragraph 6.(m) received each month for twenty-
four months beginning on the Closing Date, subject to the following:
(i) the payment of the Royalty Consideration
shall be made no later than the 10th day of each month with
respect to certificate authority revenues received in the
preceding month; and
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(ii) Buyer may at any time terminate its
obligation to pay any further Royalty Consideration by paying
Seller $200,000, in which case the obligation to pay Royalty
Consideration shall terminate immediately upon such payment
and no further Royalty Consideration shall be due or payable
hereunder with respect to any subsequent month.
5. Closing. The closing of the transactions contemplated hereby
(the "CLOSING") shall take place at the offices of Seller on April 9, 1997 or at
such other time and place as the parties shall mutually determine. The date of
the Closing is sometimes herein referred to as the "CLOSING DATE." Legal title,
equitable title, and risk of loss with respect to the Assets will not pass to
Buyer until the Assets are transferred at the Closing pursuant to the
transaction documents required hereunder.
6. Representations and Warranties of Seller. Seller hereby
represents and warrants to the Buyer that the statements contained in this
Paragraph 6 are true, correct and complete as of the date of this Agreement and
will be true, correct and complete as of the Closing Date (as though made anew
on such date):
(a) Except as set forth in Schedule 6.(a) attached
hereto, Seller has good and marketable title to the Assets, free and
clear of all Encumbrances. The Assets constitute all the assets used
by Seller in connection with the operation of the Business. Upon
consummation of the transactions contemplated hereby, Buyer will
acquire good and marketable title to the Assets, free and clear of all
Encumbrances except for Assumed Liabilities.
(b) Seller is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Delaware,
and Seller has the requisite corporate power and authority to carry on
the Business as presently conducted and to own, lease and operate the
Assets. The Seller is duly qualified and in good standing to do
business as a foreign corporation in each jurisdiction in which the
property owned, leased or operated by it in connection with the
Business makes such qualification necessary. Seller has the requisite
corporate power and authority to execute and deliver this Agreement and
the other transaction documents referred to herein, to perform its
obligations hereunder and thereunder, and to consummate the
transactions contemplated hereby and thereby. The execution and
delivery of this Agreement and the other transaction documents referred
to herein, the performance of Seller's obligations hereunder and
thereunder, and the consummation of the transactions contemplated
hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of Seller and SunRiver
Corporation, its sole shareholder. Each of this Agreement and the other
transaction documents delivered or to be delivered by Seller hereunder
has been, or at Closing will be, duly and validly executed and
delivered by Seller and constitutes, or at Closing will constitute, the
legal, valid and binding agreement of Seller and is, or at Closing will
be, enforceable in accordance with its respective terms, subject to the
possibility that enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium and
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other similar laws now or hereinafter in effect relating to creditors'
rights generally, and (ii) principles of equity.
(c) Seller owns or is licensed to use all Intellectual
Property, free and clear of all Encumbrances and without conflict with
the rights of others. Other than as set forth in Schedule , no
Intellectual Property is used in, or necessary to conduct the Business
in the manner as conducted on and prior to March 7, 1997.. Each item of
Intellectual Property owned or used by Seller immediately prior to the
Closing shall be owned or available for use by Buyer on identical terms
and conditions immediately subsequent to the Closing. Seller has taken
all necessary and desirable action to maintain and protect each item of
Intellectual Property that Seller owns or uses and to consummate the
transfer and assignment thereof to Buyer. Seller has not interfered
with, infringed upon, misappropriated or otherwise come into conflict
with any intellectual property rights of third parties, and Seller has
not received any charge, complaint, claim, demand or notice alleging
any such interference, infringement, misappropriation or violation. No
third party has interfered with, infringed upon, misappropriated or
otherwise come into conflict with any Intellectual Property rights of
Seller. Schedule 6.(c) contains a true and correct description of the
following:
(i) All Intellectual Property currently owned,
in whole or in part, by Seller, and all licenses, royalties,
assignments and other similar agreements relating to the
foregoing to which Seller is a party; and
(ii) All agreements relating to Intellectual
Property that Seller is licensed or authorized to use from
others or which Seller licenses or authorizes others to use.
(d) All liabilities of Seller (whether accrued,
unmatured, contingent, or otherwise and whether due or to become due)
are either set forth on Schedule 6.(d) attached hereto or included in
the Balance Sheet, except for liabilities incurred since March 10,
1997 in the ordinary course of business as theretofore conducted that
are not materially adverse to the operations or prospects of the
Business (for these purposes, "ordinary course" shall not include
breaches of contract, torts, or violations of law). This Agreement and
the transactions contemplated hereby will not result in Buyer's
assuming any liabilities whatsoever of Seller other than the Assumed
Liabilities.
(e) Schedule 6.(e) attached hereto sets forth a list of
all of the accounts receivable of Seller as of March 10, 1997, which
accounts, plus cash plus cash received by Seller from payments on
accounts receivable since March 10, 1997, equals at least the amount
of accounts receivable as shown on the Balance Sheet. Except as set
forth in Schedule 6.(e) attached hereto, all of Seller's accounts
receivable have arisen in the ordinary course of business and,
together with the allowance for doubtful accounts, have been reflected
in the Seller's Balance Sheet in accordance with generally accepted
accounting principles consistently applied. All such accounts
receivable net of allowance for doubtful accounts, are bona fide,
valid and binding receivables representing obligations
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for the face dollar amount thereof and are subject to no defenses,
counterclaims or set-offs of any nature whatsoever.
(f) Schedule 6.(f) attached hereto contains a list of
Seller's ten largest customers and suppliers (measured by dollar
volume of purchases and sales, as applicable) and the estimated dollar
amount and percentage of Seller's business which each such customer or
supplier represented during Seller's latest completed fiscal year.
Seller is engaged in no material disputes with any customers or
suppliers. To Seller's knowledge, except as set forth on Schedule
6.(f), no customer or supplier is considering termination,
non-renewal, or any adverse modification of its arrangements with
Seller, and, to Seller's knowledge, the transactions contemplated by
this Agreement will not have a material adverse effect on Seller's
relationship with any of its suppliers or customers.
(g) Schedule 6.(g) attached hereto contains a list of all
contracts, leases, agreements and commitments to which Seller is a
party or by which it or the Assets are bound or which otherwise relate
to the Business, including summaries of the terms of any unwritten
commitments (hereinafter referred to collectively as the "SELLER
CONTRACTS"). Seller has made available to Buyer true copies of all
Seller Contracts. Except as set forth in Schedule 6.(g), (i) Seller
and the other parties thereto, have complied in all material respects
with all of the Seller's Contracts, all of which are valid and
enforceable; (ii) all of Seller's Contracts are in full force and
effect and there exists no event or condition which with or without
notice or lapse of time would be a default thereunder, give rise to a
right to accelerate or terminate any provision thereof, or give rise
to any lien, claim, Encumbrance, or restriction on any of the Assets
or properties of Seller; (iii) all of Seller's contracts, leases, and
commitments have been entered into on an arm's-length basis; and (iv)
none of Seller's purchase commitments is in excess of the normal
requirements of its business or at an excessive price.
(h) Seller holds, and is in compliance with, all
licenses, permits and authorizations required for the use of the Assets
and the operations of the Business, which licenses, permits and
authorizations are listed on Schedule 6.(h) attached hereto.
(i) Except as set forth on Schedule 6.(i) attached
hereto, there are no outstanding judgments, decrees, injunctions,
orders, rulings or charges to which Seller, the Business or the Assets
are subject, and there are no legal, administrative, arbitration or
other proceedings or governmental investigations pending or,
threatened against Seller, the Business or the Assets.
(j) Seller is in compliance with all applicable laws and
regulations relating to the employment of labor and employment
practices; Seller is not a party to any collective bargaining
agreement; Seller has not engaged in any unfair labor practice; there
has been no attempt to organize the employees of Seller into a
collective bargaining unit, and there is no labor strike, slowdown,
stoppage, grievance or other labor difficulty pending or threatened
with respect to Seller; there are no pension, profit-sharing, savings,
thrift, medical benefit, death benefit, disability, vacation, sick
leave, bonus, commission, or other
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fringe benefit plans, policies or arrangements applicable to the
employees of Seller except as listed on Schedule ; and Seller is in
compliance with all applicable provisions of the Employee Retirement
Income Security Act of 1974, as amended.
(k) Seller is in compliance with all applicable laws and
regulations, including without limitation those dealing with
occupational safety and health and those dealing with the use,
generation, storage and disposal of hazardous, toxic and polluting
substances, underground storage tanks and all other environmental
matters. Seller has not transported, generated, stored or disposed of
any hazardous, toxic or polluting substances or arranged for the
transportation of any such substances to any location which is listed
or proposed for listing under the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended ("CERCLA") or which
is the subject of any federal, state or local enforcement actions or
other investigations which may lead to claims against the Seller or the
Business for clean-up costs, remedial work, damages to natural
resources or personal injury claims, including, but not limited to,
claims under CERCLA or under applicable state laws or regulations.
(l) Seller owns no real property.
(m) Except as set forth on Schedule 6.(m) attached
hereto, there is no requirement applicable to Seller to make any
filing with, or to obtain any permit, authorization, license, consent
or approval of, any governmental or regulatory authority or any third
party as a condition to the lawful consummation of the transactions
contemplated hereby. The execution and delivery of this Agreement by
Seller and the performance by Seller of its obligations under this
Agreement and the other transaction documents contemplated hereby will
not: (i) conflict with or result in any breach of any provision of any
law or the Certificate of Incorporation or other charter documents or
Bylaws of Seller; (ii) conflict with or result in a default or give
rise to any right of termination, cancellation or acceleration under
any of the terms, conditions or provisions of any Seller Contract
(including without limitation any contract or arrangement related to
the "OASIS") or other instrument or obligation to which Seller is a
party or by which any of Seller or any of the Assets may be bound,
assuming the consents or other authorizations set forth on Schedule
6.(m) are obtained; (iii) violate any order, writ, judgment,
injunction or decree applicable to Seller or the Assets; or (iv)
result in the creation or imposition of any Encumbrances upon any of
the Assets nor give rise to any extraordinary rights or remedies in
favor of parties to the Seller Contracts (including without limitation
contracts or arrangements related to the OASIS). For purposes of this
Agreement, the "OASIS" means the federally mandated on-line
transmission capacity purchasing program known as the Open Access
Same-time Information System.
(n) Seller has filed all necessary state, federal and
local tax returns applicable to the operation of the Business required
to be filed prior to the date hereof. Seller has satisfied all tax
obligations as are due and payable under applicable law.
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(o) Seller has had no dealings with any broker, finder or
agent in connection with the transactions contemplated by this
Agreement.
(p) Except as set forth in Schedule 6.(p) attached
hereto, the Balance Sheet of Seller and the unaudited statements of
income and cash flows for the calendar year ended December 31, 1996 as
previously furnished to Buyer have been prepared in accordance with
general accepted accounting principles consistently applied and fairly
present the financial condition of the Seller and results of
operations of the Seller as at the dates and for the periods
indicated.
(q) Neither this Agreement nor any Schedule or other
document furnished by the Seller in connection with the transactions
contemplated thereby contains or will contain any untrue statement of a
material fact or omits or will omit to state any material fact which is
necessary to make the statements contained herein or therein not
misleading.
7. Representations and Warranties of Buyer. Buyer hereby
represents and warrants to the Seller that the statements contained in this
Paragraph 7. are true, correct, and complete as of the date of this Agreement
and will be true, correct and complete as of the Closing Date (as though made
anew on such date).
(a) Buyer is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Florida,
and Buyer has the requisite corporate power and authority to carry on
its business as presently conducted and to own, lease and operate its
assets. Buyer has the requisite corporate power and authority to
execute and deliver this Agreement and the other transaction documents
referred to herein, to perform its obligations hereunder and
thereunder, and to consummate the transactions contemplated hereby and
thereby. The execution and delivery of this Agreement and the other
transaction documents referred to herein, the performance of Buyer's
obligations hereunder and thereunder, and the consummation of the
transactions contemplated hereby and thereby have been duly and validly
authorized by all necessary corporate action on the part of Buyer. Each
of this Agreement and the other transaction documents delivered or to
be delivered by Buyer hereunder has been, or at Closing will be, duly
and validly executed and delivered by Buyer and constitutes, or at
Closing will constitute, the legal, valid and binding agreement of
Buyer and is, or at Closing will be, enforceable in accordance with its
respective terms, subject to the possibility that enforceability may be
limited by (i) bankruptcy, insolvency, reorganization, moratorium and
other similar laws now or hereinafter in effect relating to creditors'
rights generally, and (ii) principles of equity.
(b) There is no requirement applicable to Buyer to make
any filing with, or to obtain any permit, authorization, license,
consent or approval of, any governmental or regulatory authority or any
third party as a condition to the lawful consummation of the
transactions contemplated hereby. The execution and delivery of this
Agreement by Buyer and the performance by Buyer of its obligations
under this Agreement and the other transaction documents contemplated
hereby will not: (i) conflict with or result in any
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breach of any law or any provision of the Articles of Incorporation or
other charter documents or Bylaws of Buyer; (ii) result in a default or
give rise to any right of termination, cancellation or acceleration
under any of the terms, conditions or provisions of contract or other
instrument or obligation to which Buyer is a party or by which Buyer
may be bound; or (iii) violate any order, writ, judgment, injunction or
decree applicable to Buyer.
(c) Buyer has had no dealings with any broker, finder or
agent in connection with the transactions contemplated by this
Agreement.
8. Conditions Precedent to Buyer's Obligations Hereunder. Buyer's
obligations to consummate the transactions contemplated hereby shall be subject
to the fulfillment at or prior to the Closing Date of the conditions that:
(a) All representations and warranties of Seller set
forth in this Agreement shall be true and correct in all material
respects on and as of the Closing Date;
(b) The Assets (but not the Excluded Assets) shall have
been conveyed, transferred and assigned to Buyer by appropriate bills
of sale, assignments and other instruments of transfer and conveyance,
in form and substance reasonably satisfactory to the Buyer's counsel,
and which shall have vested in Buyer all of Seller's right, title and
interest in and to such Assets free and clear of all Encumbrances;
Seller otherwise shall have complied with (or Buyer shall have waived)
all covenants contained herein required to be performed at or prior to
the Closing Date; and Seller shall have delivered a certificate of an
officer of Seller that all conditions specified in this Paragraph 8
have been satisfied in all respects;
(c) Buyer's shall have completed to its satisfaction in
its sole discretion its review and investigation ("DUE DILIGENCE") of
the business and operations of the Seller, including appropriate audits
of legal, financial, contractual, operational, environmental, product
liability and employment matters of the Business; Seller acknowledges
that Buyer has performed some review with respect to the Business but
that such review is not complete and shall not limit Buyer's Due
Diligence;
(d) The "Cost Savings of Chapter 7" as described on
Exhibit A hereto shall have been reduced to an amount (the "TARGET
SAVINGS AMOUNT") equal to or less than $300,000 as evidenced by proof
to such effect in form reasonably satisfactory to Buyer;
(e) Buyer shall have received an opinion of Seller's
counsel in form and substance satisfactory to Buyer relating to the
representations of Seller in Paragraph 6.(b) hereof;
(f) Seller shall have obtained, in form and substance
satisfactory to Buyer, any written consents, waivers, permits and
approvals from third parties or governmental or administrative
authorities and shall have filed all notices and other governmental
filings necessary to transfer any of the Assets and Assumed Contracts
(including the Facilities
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Lease) as in effect on the date hereof, or to otherwise consummate the
transactions contemplated hereby, at no cost or other adverse
consequence to Buyer;
(g) Buyer shall have entered into employment agreements
with certain former key employees identified by Buyer on terms and
conditions mutually acceptable to Buyer and such former employees;
(h) Buyer, Seller and Seller's stockholder shall have
entered into the Agreement regarding noncompetition, nonsolicitation
and confidentiality in substantially the form attached hereto;
(i) Buyer shall have entered into a lease with respect to
the building in which Seller currently conducts the Business;
(j) There shall not have occurred since the date of the
Letter of Intent (i) any material adverse change in the financial
condition or results of operations of Seller or the assets,
liabilities, earnings, properties, net worth, Business, operations or
prospects of Seller; or (ii) any other event, loss, damage, condition
or state of facts of any character which materially and adversely
affects or can reasonably be expected in the ordinary course of events
materially and adversely to affect the Assets, the Business or
prospects of the Business;
(k) Seller shall have delivered to Buyer estoppel
certificates in form and substance satisfactory to counsel for Buyer
with respect to all lease agreements to which it is a party;
(l) Seller shall have delivered to Buyer such other
certificates, instruments and other documents as Buyer shall reasonably
require in connection with the transactions contemplated by this
Agreement; and
(m) None of the parties hereto shall be subject on the
Closing Date to any order, decree or injunction of a court of competent
jurisdiction that enjoins or prohibits the consummation of the
transactions contemplated by this Agreement, nor shall there be a
pending suit or proceeding that seeks injunctive or other relief in
connection with such transactions.
9. Conditions Precedent to Seller's Obligations Hereunder.
Seller's obligations to consummate the transactions contemplated hereby shall be
subject to the fulfillment at or prior to the Closing Date of the conditions
that:
(a) All representations and warranties of Buyer set forth
in this Agreement shall be true and correct in all material respects on
and as of the Closing Date;
(b) Buyer shall have complied with (or Seller shall have
waived) all covenants contained herein required to be performed at or
prior to the Closing Date (including without limitation payment of the
Cash Consideration); and Buyer shall have delivered of a
10
<PAGE> 12
certificate signed by an officer of Buyer that all conditions specified
in this Paragraph have been satisfied in all respects;
(c) Seller shall have received an opinion of Buyer's
counsel in form and substance satisfactory to Seller relating to the
representations of Buyer in Paragraph 7.(a) hereof
(d) The "Cost Savings of Chapter 7" as described on
Exhibit A hereto shall have been reduced to the Target Savings Amount
as evidenced by proof to such effect in form reasonably satisfactory to
Seller;;
(e) Buyer shall have delivered to Seller such other
certificates, instruments and other documents as Seller shall
reasonably require in connection with the transactions contemplated by
this Agreement; and
(f) None of the parties hereto shall be subject on the
Closing Date to any order, decree or injunction of a court of competent
jurisdiction that enjoins or prohibits the consummation of the
transactions contemplated by this Agreement, nor shall there be a
pending suit or proceeding that seeks injunctive or other relief in
connection with such transactions.
(g) Seller shall have obtained, in form and substance
satisfactory to Buyer, any written consents, waivers, permits and
approvals from third parties or governmental or administrative
authorities and shall have filed all notices and other governmental
filings necessary to transfer any of the Assets and Assumed Contracts
(including the Facilities Lease) as in effect on the date hereof, or to
otherwise consummate the transactions contemplated hereby, at no cost
or other adverse consequence to Buyer;
(h) Seller shall have received a letter agreement from
CyberGuard Corporation indemnifying and holding harmless Seller and
SunRiver Corporation regarding the Assumed Liabilities.
10. Termination
(a) This Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time prior to the Closing
Date by the mutual agreement of Buyer and Seller, in which case this
Agreement shall terminate immediately upon the effectiveness of such
agreement.
(b) Buyer may terminate this Agreement at any time prior
to the Closing if:
(i) Buyer, in its sole discretion, shall
determine based on its Due Diligence that the transactions
contemplated hereby are not advisable or that the condition
contained in Paragraph 8.(c) cannot be met, in which case this
Agreement shall terminate immediately upon notice by Buyer to
Seller of such event;
11
<PAGE> 13
(ii) Buyer shall determine that any of the
conditions of Paragraph 8. (other than Paragraph 8.(c)
thereof) cannot reasonably be fulfilled by the Closing Date
(and the reason for such non-fulfillment is not a breach by
Buyer of its obligations hereunder), or Seller shall have
materially breached any of its obligations hereunder, in
which case Buyer shall notify Seller of such prospective
failure of condition or breach, and this Agreement shall
terminate on the fifth business day following such notice
unless the Seller shall have given Buyer reasonable assurance
that such condition can be fulfilled by the Closing Date, or
Seller shall have cured such breach, as the case may be; or
(iii) The Closing shall not have occurred by April
9, 1997, in which case this Agreement shall terminate upon
receipt by Seller of Buyer's notice of its intention to
terminate this Agreement by reason of this subparagraph.
(c) Seller may terminate this Agreement at any time prior
to the Closing if:
(i) Seller shall determine that any of the
conditions of Paragraph 9. cannot reasonably be fulfilled by
the Closing Date (and the reason for such non-fulfillment is
not a breach by Seller of its obligations hereunder), or
Buyer shall have materially breached any of its obligations
hereunder, in which case Seller shall notify Buyer of such
prospective failure of condition or breach, and this
Agreement shall terminate on the fifth business day following
such notice unless the Buyer shall have given Seller
reasonable assurance that such condition can be fulfilled by
the Closing Date, or Buyer shall have cured such breach, as
the case may be;
(ii) The Closing shall not have occurred by April
9, 1997, in which case this Agreement shall terminate upon
receipt by Buyer of Seller's notice of its intention to
terminate this Agreement by reason of this subparagraph.
(d) The failure by Buyer or Seller, reasonably and in
good faith, to act or to omit to act in order to cause the fulfilling
of the conditions precedent to this Agreement shall be deemed a breach
of the Agreement, but only if action, or omitting to act, would not
result in substantial expense not otherwise contemplated by this
Agreement to the party whose actions or omission is required.
(e) In the event of termination pursuant to this
Paragraph 10., all obligations of the parties hereto shall terminate,
except the obligations of the parties pursuant to this Paragraph
10.(e) and Paragraphs 11. and 12.(i).
(i) In the event that the Buyer terminates this
Agreement by reason of a material breach by Seller of the
terms hereof, then Seller shall reimburse Buyer for the actual
amount of the Advance, with interest at 10% per annum.
(ii) If Buyer terminates this Agreement by reason
of a material breach by Seller of the terms hereof, and within
180 days thereafter Seller consummates a
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<PAGE> 14
Competing Transaction, Seller shall reimburse Buyer for double
the actual amount of the Advance.
(iii) If Seller terminates this Agreement in the
absence of a material breach by Buyer and within 180 days
thereafter Seller consummates a Competing Transaction, Seller
shall reimburse Buyer for double the actual amount of the
Advance.
11. Indemnification.
(a) From and after the date hereof, Seller shall
indemnify, defend and hold Buyer harmless from and against all claims,
losses, liabilities, costs, expenses, obligations and damages,
including without limitation litigation costs and reasonable attorneys'
fees, sustained, incurred or required to be paid by Buyer that: (i)
would not have been sustained, incurred or paid if all the
representations, warranties, agreements and covenants of Seller
hereunder had been true, correct and duly performed; (ii) relate to or
arise out of the failure to comply with any law relating to sales of
all or substantially all assets, or similar laws applicable to the
transactions contemplated hereby; or (iii) relate to or arise out of
any assertion against Buyer that it should be responsible for any
liabilities, (including tax liabilities), transactions or occurrences
affecting Seller or the Assets which accrue or take place prior to the
Closing Date, other than Assumed Liabilities.
(b) From and after the date hereof, Buyer shall
indemnify, defend and hold Seller harmless from and against all claims,
losses, liabilities, costs, expenses, obligations and damages,
including without limitation litigation costs and reasonable attorneys'
fees, sustained, incurred or required to be paid by Seller that would
not have been sustained, incurred or paid if all the representations,
warranties, agreements and covenants of Buyer hereunder had been true,
correct and duly performed.
(c) An indemnified party shall promptly give written
notice to the indemnifying party after the indemnified party has
knowledge that any legal proceeding has been instituted or any claim
has been asserted, in respect of which, indemnification may be sought
under the provisions of Paragraph 11. provided that failure to give
such notice shall not preclude indemnification with respect to such
proceeding or claim except to the extent of any additional or
increased Losses directly caused by such failure. Upon receipt of
notice by the indemnifying party, the indemnifying party shall assume
the defense thereof, including the employment of counsel reasonably
satisfactory to the indemnified party, and the indemnifying party
shall pay all fees and expenses of such defense. The indemnified party
shall have the right to retain separate counsel, but the fees and
expenses of such counsel shall be at the expense of the indemnified
party unless (i) the employment of such counsel shall have been
specifically authorized in writing by the indemnifying party or (ii)
the indemnifying party has failed to assume the defense and employ
counsel as provided above, in which case the indemnifying party shall
pay the fees and expenses of the counsel employed by the indemnified
party.
13
<PAGE> 15
12. Miscellaneous Covenants and Agreements
(a) Conduct of Business Prior to the Closing. Seller
agrees that from the date hereof until the Closing, except as otherwise
consented to or approved by an officer of Buyer in writing or required
by this Agreement (but only to the extent reasonably possible using the
Advances provided by Buyer pursuant to Section 12.(c):
(i) The business of Seller shall be operated
diligently and conducted only in the ordinary course of
business consistent with past and current practices.
(ii) Seller shall use its best efforts to
continue sales and profit margins at not less than the present
rate; to preserve its business organization; to keep available
to Buyer the present services of its officers and employees;
and to preserve for Buyer the goodwill of its suppliers,
landlords, customers, distributors and others with whom
business relationships exist.
(iii) Seller shall maintain in effect all
insurance policies with respect to its business and properties
of the type and in amounts consistent with past and current
practices.
(iv) Seller shall, consistent with prior
practice, maintain and preserve the Assets in their current
condition and repair, reasonable wear and tear excepted, and
shall not dispose of any capital assets (except for trade-ins
or dispositions of obsolete equipment in the normal course of
business).
(v) Seller shall maintain its books, accounts
and records in accordance with its customary accounting
practices and in a manner consistent with good business
practices.
(vi) Seller shall comply with all provisions of
laws and of its leases and contracts.
(vii) From the date hereof through the Closing
Date, Seller shall give to Buyer and its authorized
accountants, counsel, advisors, and other representatives full
reasonable access to any and all of its premises, properties,
assets, inventories, contracts, books, records (including tax
returns filed and those in preparation) and affairs and shall
cause its officers to furnish to Buyer and its representatives
any and all financial and operating data and other information
regarding the financial condition, results of operations,
business, properties, assets, liabilities or future prospects
of Seller as Buyer may from time to time request to the extent
they can be produced without substantial expense to Seller.
(viii) Seller agrees that from the date hereof
until the Closing, except as otherwise consented to or
approved by an officer of Buyer in writing or required by this
Agreement, Seller shall not (i) modify, amend or cancel any of
the provisions of any of its leases or contracts or enter into
any new contract that is not terminable
14
<PAGE> 16
by it on not more than thirty (30) days notice; (ii) increase
the remuneration (including wages, bonuses, salaries, expense
accounts and benefits of any kind) of any director, officer or
employee of Seller; (iii) enter into any contract relating to
employment, compensation or benefits or enter into or amend
any employee benefit plan; (i) permit or suffer any director,
officer or shareholder of Seller or any agent thereof to
remove or purchase anything of value located at the premises
of any office, or other facility of Seller; (iv) enter into
any commitment for any capital expenditures which in any one
instance exceed $2,000, or in the aggregate, exceed $5,000;
(v) cease the sale and distribution of any products presently
or services sold, distributed or offered by Seller or (vi)
make any distributions to its shareholders, or any affiliates
thereof, in any form whatsoever, including, without
limitation, dividends, share redemptions or any non-cash
distributions.
(ix) Seller shall give Buyer prompt notice of any
change in any of the information contained in the
representations and warranties of Seller hereunder, the
Schedules hereto or the documents furnished by Seller in
connection herewith which occurs prior to the Closing.
(b) All title clearance charges and all transfer taxes
and all documentary, filing, recording and vehicle registration fees
(if any) relating to the sale of the Assets shall be borne solely by
the Seller, but only to the extent that the payment by Seller of such
taxes or fees will not result in the Target Savings Amount exceeding
$300,000. The parties shall furnish such information and execute such
certificates and other documents as the parties may determine in order
to obtain any available tax clearance certificates. All other costs and
expenses incurred in connection with this agreement and the
transactions contemplated hereby shall be paid by the party incurring
such costs and expenses.
(c) From the date hereof until April 10, 1997, Buyer will
continue to advance funds (which, together with all "Advances" as
defined in the Letter of Intent are referred to herein as the
"ADVANCE") in the amount of $50,000 per week (or, if less, the actual
expenses of Seller), which amount shall calculated at $10,000 per
business day for the period after April 4, 1997 through April 9, 1997,
up to a maximum amount of $270,000 (including amounts of all "Advances"
funded pursuant to the Letter of Intent) to be used exclusively for the
operations of Seller at a level of effort of 24 employees and
consultants and sufficient equipment (the determination of which
employees and consultants and which equipment to be maintained to be in
Buyer's sole discretion) to support such number of employees and
consultants. Seller agrees that the Advance shall be used exclusively
in the operation of the Business. Without limiting the generality of
the foregoing sentence, out of each week's installment of the Advance,
outstanding Seller payroll and consulting fees shall be paid in full
and a portion of the remaining Advance shall be used to pay amounts due
under the Equipment Leases and the Facilities Lease, and to pay other
expenses necessary to keep the Business operating. Past due accounts
payable and other past due liabilities shall be paid only to the extent
necessary to keep the Business operating.
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<PAGE> 17
(d) From the date hereof until 375 days from the Closing
Date and so long as Buyer is not in material breach of any of its
financial obligations under this Agreement or any related agreements
and CyberGuard is not in material breach of its obligations under the
letter agreement required by Section 9.(h) hereof, Seller shall not
voluntary file (and shall vigorously defend, if involuntarily filed)
any petition in Bankruptcy under federal or analogous state law, the
commencement of a liquidation, the appointment of a receiver, an
assignment for the benefit of creditors or any similar event.
(e) Seller shall use commercially reasonable efforts to
furnish, and to cause any third party to furnish, to Buyer and its
auditors such documents, information and work papers reasonably
necessary (in Buyer's sole discretion), to permit Buyer to prepare, and
conduct an audit with respect to, financial statements of the Seller at
and for the fiscal years ended December 31, 1994, 1995 and 1996;
provided, however, that Buyer shall restrict, and shall cause its
auditors to restrict, their use of such documents, information and
workpapers to the preparation of such financial statements and the
audit thereof.
(f) From the date hereof, Seller shall not, directly or
indirectly, solicit, encourage, entertain or support, or engage in any
discussions with respect to, any inquiry, proposal or offer from any
other party regarding the sale of the Assets, the Business or a
substantial portion thereof (a "COMPETING TRANSACTION"). For purposes,
the term "sale" shall include a sale or other disposition of assets, a
merger, a consolidation, a sale of stock, an exchange of stock, or
other similar transaction.
(g) Promptly following the Closing Date, Seller shall
file Articles of Amendment to its Articles of Incorporation changing
its corporate name to a name not containing the word "TradeWave" or any
similar word and shall file or cause to be filed such certificates,
documents or other instruments as may be necessary to effect such
change in each state or other jurisdiction in which it is qualified to
do business.
(h) Seller acknowledges and agrees that the Assets are
unique, that a breach of this Agreement may not provide Buyer with
sufficient remedies at law, and that Buyer may enforce the provisions
of this Agreement through an injunction, without the posting of a bond,
or through any other equitable remedies. The provisions of the
preceding sentence shall not comprise the sole remedy available to
Buyer. Buyer and Seller shall be entitled to all available remedies at
law, cumulatively and in the alternative.
(i) The transactions contemplated by this Agreement shall
be governed by the Nondisclosure Agreement dated January 20, 1997
between Buyer and Seller. Notwithstanding the foregoing, except as
otherwise required by law, the Buyer and Seller agree to keep this
proposed transaction confidential until mutual agreement is reached in
writing on publicity or any other form of disclosure to any party other
than Buyer, Seller or their affiliates, and all subsequent publicity by
a party on this transaction will be cleared with the other party prior
to release.
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<PAGE> 18
(j) This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors
and assigns. This Agreement may not be assigned by either of the
parties hereto without the prior written consent of the other party,
except that Buyer may assign this Agreement to any corporation wholly
owned by Buyer or CyberGuard. Notwithstanding any investigation made by
or on behalf of either party, the representations and warranties of
both parties hereunder, together with all covenants and agreements of
each party contained herein, shall survive the Closing and consummation
of all the transactions contemplated hereby for a period of two years
from the Closing Date.
(k) This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without regard to its
conflicts of law rules.
(l) This Agreement may be executed in multiple
counterparts, each of which shall have the force and effect of an
original.
(m) Words such as "herein," hereof," and "hereunder"
shall refer to this Agreement as a whole and not to any particular
section or paragraph.
(n) All notices and other communications hereunder shall
be in writing and shall be deemed to have been given when (i) delivered
by hand; (ii) acknowledgment of receipt is sent by the party to whom a
facsimile transmission was sent or (iii) on the third business day
after being mailed by registered or certified mail (return receipt
requested), postage prepaid, to the parties at the following addresses
(or at such other address for a party as shall be specified by like
notice):
If to Seller:
TradeWave Corporation
c/o Sun River Corporation
9430 Research Boulevard
Echelon IV, Suite 200
Austin, Texas 79759-6543
Attention: Wayne Schroeder
Copies to:
Byron L. Willeford, Esq.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith St., Suite 1400
Houston, TX 77002
Executive Center Drive, Suite 100,
Austin, TX 78731
If to Buyer:
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<PAGE> 19
TradeWave Corporation
c/o CyberGuard Corporation
West Cypress Creek Road
Fort Lauderdale, Florida 33309
Attention: Robert L. Carberry, Chairman, President, and
Chief Executive Officer, and Brian Foremny,
General Counsel and Secretary
(o) Seller shall from time to time after the Closing, at
Buyer's request and without further consideration, execute and deliver
or cause to be executed and delivered such instruments of transfer,
conveyance and assignment (in addition to those delivered at Closing)
prepared by Buyer, such other action, as Buyer may reasonably require
to more effectively transfer, convey and assign to, and to put Buyer in
actual possession and control of, each of the Assets.
(p) No person who is not a party to this Agreement,
including without limitation any employee or former employee of any
Seller, shall be deemed to be a beneficiary of any provision of this
Agreement, and no such person shall have any claim, cause of action,
right or remedy pursuant to this Agreement.
(q) This Agreement, including the Exhibits and Schedules
attached hereto (and any other instruments executed and delivered at
the Closing), embodies the entire agreement and understanding of the
parties with respect to the transactions contemplated by this
Agreement. This Agreement supersedes all prior discussions,
negotiations, agreements and understandings, both written and oral,
(including without limitation the Letter of Intent) between the parties
and their respective affiliates with respect to the transactions
contemplated hereby that are not reflected or set forth in this
Agreement or the Exhibits and Schedules attached hereto. No amendment
of any portion of this Agreement shall be valid unless in writing and
signed by the parties hereto.
18
<PAGE> 20
IN WITNESS WHEREOF, on the date first above written, the parties have
duly executed this Agreement.
BUYER
TRADEWAVE CORPORATION,
a Florida corporation
By: /s/ Robert L. Carberry
-------------------------------
Its: President
SELLER
TRADEWAVE CORPORATION
a Delaware corporation
By: Wayne Schroeder
-------------------------------
Its:Vice President-Finance and
Chief Financial Officer
19
<PAGE> 21
SCHEDULE 1 - PURCHASED (INCLUDED) ASSETS
Includes assets as defined in Paragraph (1) of the Asset Purchase Agreement.
Includes but not limited to all assets described in the following lists and
schedules. Excludes all assets described in Schedule 2, Excluded Assets.
Purchased (Included) Assets
1 All equipment described in Equipment List "A" including all or
portions of the following:
A. All or part of equipment leased through High Tech Leasing Inc.
B. All or part of equipment leased through Computer Leasing Inc.
C. All equipment owned, without encumbrance, by TradeWave
2 A. All software leased through JLA credit (SYBASE)
B. All of Leasehold improvements financed through Graybar Financial
Services - Specific to Suite 100 & G60
C. Other Owned Equipment not excluded in Schedule 2.
3 Equipment provided through assumed Operating leases limited to the
following:
A. Part of AT&T Lease - Phone system - Schedules 00010, 00021, 00050
B. Pagenet
C. UUNET
D. AT&T Wireless Phones & Services
4 Owned and leased software not excluded in Schedule 2
5 Furniture, Fixtures, and other Non-Current Assets not excluded in
Schedule 2.
6 All other inventories and supplies including office, building service
and mechanical supplies.
7 Building Lease - Koger Equity - Suite 100 & G60
8 Contracts, Agreements and Licenses not excluded in Schedule 2.
Refer to Schedules:
Schedule 6C - Intellectual Property
Schedule 6G - Contracts Leases, and Agreements
Schedule 6H - Licenses
Schedule 6J - Labor Agreements
9 Accounts Receivable, Cash, and Deposits
Schedule 6E - Current Assets
10 All intangible assets including privledges, rights, interests,
trademarks, and copyrights including but not limited to the following:
Schedule 6C - Intellectual Property, Patents, Trade Marks
and Copyrights
Schedule 6H - Licenses
Schedule 6G - Contracts Leases, and Agreements
The Company Name
All product names trademarked or otherwise unique to the
TradeWave business
<PAGE> 22
SCHEDULE 1
<TABLE>
<CAPTION>
SELECTED FURNITURE AND FIXTURES
SUMMARIZED FURNITURE INVENTORY
ALL FURNITURE & FIXTURES INCLUDING BUT NOT LIMITED TO THE UNITS
FOLLOWING ITEMS.
DESK
<S> <C>
All Steel 25
All Steel - Owned 1
HON Desk 1
HON Secy 1
MacTavish Mahogany Desk 6
MacTavish Mahogany Secy 3
Unknown Oak 1
Steelcase 19
Steelcase - Owned 3
Wooden Student 2
COMPUTER TABLES
Kueger Data Board 920 88
CHAIRS
All Steel - Brown Tweed 46
All Steel - Bright Blue Tweed 26
All Steel - Salmon 1
Comforto - Light Blue w Cushion - Stacker 10
Euronti - Maroon & Walnut Up - 5w Ped 1
Haskell - Blue Tubular 2
Hiebert - Blue Up w Oak Peds Conf 4
Hiebert - Blue Up w Oak Peds Highback 1
Hiebert - Blue Up w Oak Trim Side 2
HON - Grey w Ped Arm 2
La-Z-Boy - Maroon Up w Oak Ped 1
Steelcase - Brown 22
Steelcase - Dark Blue w Brown Back 13
</TABLE>
<PAGE> 23
<TABLE>
<S> <C>
Steelcase - Blue Concentrx 35
Superior - Ped Arm Maroon Conf 10
Unknown - Brn Up & Wood Kneeling 1
Unknown - Tan Up & Oak Kneeling 1
Unknown - Rust Up & Oak Kneeling 1
Unknown - Grey w Ped Arm 1
Unknown - Blue Up Side 2
Unknown - Mauve Up & Walnut Side 4
Unknown - Turquoise Side 1
Welton Nielson - Oak & Brown Up Side 1
LATERAL FILES
All Steel 30
HON - 4 Drawer 1
Unknown - Oak 1
Steelcase 30
Superior Equipment & Systems 1
BOOKSHELVES
All Steel - Small 56
SC - Large D15"XH55"XW36" 20
Unknown - Extra Large 1
Wood D10"XH48"XW30" 1
Wood D12"XH48"XW36" 3
Wood D13.5'XH52'XW36.5" 1
MISCELLANEOUS
Blackboard - 4'X6' 1
Box Fan 2
Carpet Pad - 4'X5' 43
CB - 18"X24" 1
CB - 18"X30" 2
CB - 2'X3' w 1 Unopened 8
CB - 3'X4' w 1 Wood Trim & 6 Unopened 37
CB - 3'X5' 1
</TABLE>
<PAGE> 24
<TABLE>
<S> <C>
CB - 4'X6' 1
CB - 4'X8" 1
Coat Rack, Oak, Wall Mounted 1
Coat Tree, Brushed Alum 2
Coat Tree, Wooden 2
Coffee Maker, Proctor Silex White 12 Cup 1
Coffee Maker, West Bend 12 Cup 1
Coffee Perculator, Regal 30 Cup 1
Coffee Perculator, West Bend 100 Cup 1
Coffee Pumps 2
Conf Table, 5 Piece Blond Oak 1
Conf Table, 5 Piece Mahogany, D48"XH29"XW122" 1
Couch, Blue/Brn w Oak Trim 1
Couch, Schefer 7' Maroon 1
Credenza, MacTavish Mahogany w KB Pad D20"XH29"XW65" 2
Credenza, MacTavish Mahogany D20"XH29"XW65" 2
Credenza, Oak w Lock H118 D20"XH29"XW74" 1
Credenza, Wood 1
Cutting Board, Boston 2618 1
Dollies, Heavy Duty Flat Wooden 2
Easel, Ampad Adjustable D3"XH36'XW27" 1
Eastern 35 First Aid Kit 1
Fabric Board - 3'X4' 1
Filing Cabt, 4-Drwr w Lock T593 1
Hand Truck, Green 2
Heater, Lakewood 1
Heater, Titan 5
Key Boxes 3
Keyboard Trays - SC 2
Ladder, Werner Fiberglas Step 1
Lamp - Articulated Desk - White 1
</TABLE>
<PAGE> 25
<TABLE>
<S> <C>
Lamp, Black Halogen Floor 3
Lamp, Clip On 1
Lamp, Desk 1
Loveseat, Blue/Brn w Oak Trim 1
Mail Center, 15 Slots 6
Meeting Table, Blonde Oak Round D42" 1
Meeting Table, Grey Rnd Ped 1
Metal Frame for Card Board File Insert 2
Microwave Oven, Sharp Carousel 1
Modular Panel H53"XW29" Purple & Blue 4
Modular Panel H53"XW48" Purple & Blue 10
Modular Panel H65"XW30" 3
Modular Panels, Light Grey H65"XW45" 6
Patch Panel, ELP 96 Port 1
Patch Panel, Ortronics 96 Port 6
Platt Travel Case D14.5"XH16.5"XW22" 1
Platt Travel Case D22"XH9"XW22" 1
Platt Travel Case D23"XH23"XW25" 3
Portable Drill w Rchrgr, Black & Decker 1
Printer Stand - Wooden 1
Projector Screen w Stand, Knox 1
Projector Screen wo Stand, Bretford 1
Refrigerator, GE 1
Refrigerator, Gibson (not working) 1
Rolodex - New 1
Router Rack - Enclosed 1
Safe, Schwab Fireguard D30"XH41"XW30" 1
Service Cart, Globe Steel - 36"X44"X24" 1
Service Cart, Rubbermaid - 25.5"X32.5"x40" 1
Settee from Boundless 1
Shelving Units, 10 Pine w 10 Supports & 5 Wall Tracks 1
Shelving Units, 10 White w 35 White Supports & 10 Wall Tracks 1
</TABLE>
<PAGE> 26
<TABLE>
<S> <C>
Shelving Units, 3 White w 2 Wall Tracks on Floor 1
Shelving Units, 8 White w 34 White Supports & 12 Wall Tracks 1
ShopVac Shop Vac 1
Skyline Trade Show Travel Cases D13.5"XH39.5"XW14" 4
Skyline Trade Show Travel Cases D16.5"XH37.5"XW22" 1
Skyline Trade Show Travel Cases D50"XH7"XW29" 3
Socket & Bit Set, Allied Rachet 1
Stereo Enclosure, Wood Laminate w Wheels D21.25XH32.75XW29" 1
Storage Cabt - AS 1
Storage Cabt - AS w Locks 3
Table, Blonde Oak w Rnd Corners D36"XH30"XW36" 1
Table, Grey Cylindrical Lamp 1
Table, Howe - Oak/Chrome Folding - D18'XH26.5"XW60" 1
Table, Mahogany Accessory, D24"XH29"XW60" 2
Table, Oak Coffee w Glass Insert 1
Table, Oak End 1
Table, Small Wooden 1
Table, Small Wooden Service 1
Telephone Rack 1
Tool Box, Work Force Plastic w Tools 1
Trash Container, Rubbermaid Bruiser 1
Tripod 1
Tripod, GMI Easel 1
WB - 3'X4' w 1 Unopened 44
WB - 4'X5' 1
WB - 4'X6' 9
</TABLE>
<PAGE> 27
<TABLE>
<S> <C>
WB - 4'X8' 3
WB - Exec Oak - 4'X8' 1
WB Executive Oak w Tack Brd Sides D1.75"XH3.5'XW12' Open 3
WB, Mahogany Wall Mounted w 2 Tack Brds, D3.5"XH4'XW12' Opened 1
Work Center, Bevis D24"XH31"XW48" 2
Work Ctr Top, Bevis D10"XH14.5"XW46.5" 1
Workstation - Grey Wrap-around Corner 1
WS - SC Overhead w 2 Locks & Light, D15"XH35"XW60" 3
WS - SC w Locks & KB Pad D30"XH30"XW60" 1
WS - SC w Locks, 3 Drwrs, D30"XH30"XW60" 4
WS - SC w Lock D30"XH30"XW48" 1
WS - SC w Lock D30"XH30"XW75" 2
WS - SC w Locks, 3 Drwrs D30"XH30"XW45" 1
WS - SC w Lock & 6 Drwrs D30"XH30"XW73" 1
WT - AS 9
WT - SC 27
</TABLE>
<PAGE> 28
<TABLE>
<CAPTION>
INTERNAL ASSET SYSTEM TYPE SYSTEM NAME MONITOR TYPE OWNED LEASE
<S> <C> <C> <C> <C> <C> <C>
113 Kevin Gourley Austin P90 Notebook outnova L HT
168 Jeff Achtermann Sun Sparcstation 5/85 iridium L HT
275 Giny Hern HP LaserJet 4M+ journal L HT
510 Philip Eberz Compusource P133 strontium L HT
284 Boundless AES P100 L HT
513 Boundless AES P100 zinc L HT
397 Secure Lab reggie Sun GDM-17E10 L HT
398 Gary Williams boron Sun GDM-17E10 L HT
293 Computer Room borg Orchestra L HT
Tuba-17
278 Computer Room supernova Orchestra L HT
Tuba 17"
467 Liz Robertson palmwood Orchestra L HT
Tuba-17
120 Shailagh Clarke Sun Sparcstation 1 anger L HT-1
121 Leslie Devlin Sun Sparcstation 1 bandicoot L HT-1
122 System Storage Sun Sparcstation 1 L HT-1
124 System Storage Sun Sparcstation IPC L HT-1
488 System Storage Sun Sparcstation IPC L HT-1
169 Boundless NEC P100 Chasis
(spare parts) L HT-1
170 Boundless NEC P100 Chasis
(spare parts) L HT-1
230 Ken Fiduk Sun Sparcstation 1 eclipse L HT-1
231 Rachel Zardiackas Sun Sparcstation 1 farad L HT-1
234 Charlotte Laborde Sun Sparcstation 1 zenith L HT-1
482 Kathy Wells Sun Sparcstation 1 volos L HT-1
235 QA Lab Area Sun Sparcstation 1 arcadia L HT-1
236 System Storage Sun Sparcstation 1 L HT-1
276 Boundless HP LaserJet 4M+ LaserJet observer L HT-1
271 Clay Harris Apple PowerPC 5300 PB chromium L HT-1
272 Bob Barnard Apple PowerPC 5300 PB niobium L HT-1
273 System Storage Apple PowerMac 7100/80 titanium L HT-1
</TABLE>
<PAGE> 29
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
365 Boundless NEC XV17 L HT-1
367 Boundless NEC XV17 L HT-1
105 Chestelle Luck Austin P120 Power Plus sapphire L HT-2
106 Shailagh Clarke Austin P120 Power Plus thorium L HT-2
107 QA Lab Area Austin P120 Power Plus silver L HT-2
108 Doug Moench Austin P120 Power Plus indium L HT-2
109 Mitch Fincher Austin P120 Power Plus cadmium L HT-2
110 Boundless Austin P120 Power Plus platinum L HT-2
111 Kathy Wells Austin P120 Power Plus beryllium L HT-2
112 Russell Martinez Austin P90 Notebook cerium L HT-2
167 Chris Britton Sun Sparcstation 5/85 pegasus L HT-2
39 Phone Room Bay Networks 800 hub L HT-4
41 Computer Room 2 Gateway2000 G6-200 supernova L HT-4
42 David Eckelkamp Gateway2000 G6-200 jade L HT-4
43 Open - Developmt Gateway2000 G6-200 pulsar L HT-4
44 Open - Developmt Gateway2000 G6-200 asteroid L HT-4
45 Cynthia Gardner Gateway2000 G6-200 comet L HT-4
46 Tom Myers Gateway2000 G6-200 quasar L HT-4
47 Open - Developmt Gateway2000 G6-200 nebula L HT-4
70 Open - Developmt asteroid Sony L HT-4
Trinitron
17SFII
71 Open - Developmt nebula Sony L HT-4
Trinitron
17SFII
72 Open - Developmt pulsar Sony L HT-4
Trinitron
17SFII
73 Cynthia Gardner comet Sony L HT-4
Trinitron
17SFII
</TABLE>
<PAGE> 30
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
74 Tom Myers quasar Sony L HT-4
Trinitron
17SFII
75 Chris Britton cadmium Sony L HT-4
Trinitron
17SFII
206 Clay Harris IBM Thinkpad 701CS osmium L HT-4
303 Phone Room Global Village Platinum
28.8 modem L HT-4
507 Doug Rosenthal US Robotics 28.8 Modem L HT-4
509 Open - Developmt strontium Sony L HT-4
Trinitron
17SFII
543 Russell Martinez Mac 2GB External Disk trademac L HT-4
544 Russell Martinez Mac 2GB External Disk L HT-4
574 Russell Martinez US Robotics 28.8 Modem L HT-4
Home Use-DE US Robotics 28.8 Modem L HT-4
Home Use-DR US Robotics 28.8 Modem L HT-4
559 Phone Room US Robotics 28.8 Modem no power L HT-4
supply
233 Computer Room Sun Sparcstation 1 emerald L HT-4
237 System Storage Sun Sparcstation 1 L HT-4
64 Phone Room Bay Networks 810 hub L HT-6
65 David Eckelkamp Bay Networks 810 hub L HT-6
66 Phone Room Bay Networks 810 hub L HT-6
69 Phone Room Bay Networks 810 hub L HT-6
197 Beth Paxton Sun UltraSparc 1 L HT-6
THE SANWA LEASE
326 Richard Cardona Apple PowerMac 8500/180 cobalt L Sanwa
473 Bob James crystal NEC XV17+ L Sanwa
371 Michael Gray eagle NEC XV17+ L Sanwa
468 Steve Smith gemstone NEC XV17+ L Sanwa
373 Pace Bonner copper NEC XV17+ L Sanwa
480 Dale Smith aluminum NEC XV17+ L Sanwa
</TABLE>
<PAGE> 31
OTHER EXCLUDED ITEMS & LEASES
<TABLE>
<S> <C> <C>
1 Portions of Graybar lease not specific to G60 & Suite 100 Ref - 6G
2 Addition to AT&T Lease created in November, 1996 Ref - 6G
DIGITAL BOARDS
96DR08312360
96DR08312389
DIGITAL STATIONS
96SP63387465
96SP63387479
96SP63387482
96SP63387484
96SP63387486
96SP63387493
96SP63387496
96SP63387498
96SP63387500
96SP63387501
96SP63387504
96SP63387509
96SP63387518
96SP63387516
3 Postage Machine leased through Pitney Bowes Ref - 6G
4 Copier machine leased through CDP Ref - 6G
5 Tradeshow booth leased through Berthal-Fisher Ref - 6G
6 Portions of Koger lease not associated with Suite 100 & G60 Ref - 6G
1 NO FURNITURE OR FIXTURES IS EXCLUDED Ref - 6G
2 NO OWNED SOFTWARE IS EXCLUDED Ref - 6G
EXCLUDED CONTRACTS
1 Dept Of The Air Force Award/Contract Ref - 6G
(AMII)
Dept Of The Air Force Award/Contract Ref - 6G
(AMII)
MODIFICATION
2 Benefit America Benefit Alternatives Ref - 6G
3 Employers Health Dental Insurance Ref - 6G
Insurance Co.
4 Colonial Life & Accident Flexible Benefits Ref - 6G
Ins Co. Plan
Medical
Reimbursement
Dependent Care
</TABLE>
<PAGE> 32
SCHEDULE 3 - ASSUMED LIABILITIES
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
File Name Type Address
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3.14 High-Tech Leasing Inc. Capital Leases 8 Boulevard Street
Milton, MA 02186
(617) 696-3203
High Tech Lease # 1 Capital Leases Computer Leasing INC
Computer Equipment Three University Plaza
Hackensack NJ 07601
201-646-9300
cust #5014250
High Tech Lease # 2 Capital Leases High Tech Leasing
Computer Equipment 3 Boulevard St
617-696-3203 Milton, MA 02186
Ralph Nagle
High Tech Lease # 4 Capital Leases Computer Systems of America
Computer Equipment 22 Batterymarch Street
Boston MA 02109-4812
617-357-1700
lease # TX - 046-3503
High Tech Lease # 6 Capital Leases High Tech Leasing
Computer Equipment 3 Boulevard St
617-696-3203 Milton, MA 02186
Ralph Nagle
3.14 Koger Equity Operating Leases Leasing & Management Office
3.14 UUNET Operating Leases 3060 Williams Dr
Fairfax, VA 22031
3.14 AT&T Wireless Operating Leases 1120 Loop 360
Austin, TX 78746
3.14 Sybase/JLA Credit Corp Operating Leases 970 West 190th Street
Torrance, CA 90502
3.14 AT&T Credit Corp Operating Leases 1120 Loop 360
Austin, TX 78746
</TABLE>
<PAGE> 33
6 A. - ENCUMBERANCES AGAINST ASSETS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
File Name Type Address Comments
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3.14 BancBoston Leasing Inc. Capital Leases 100 Federal St. Purchase
Boston, Massachusetts 02110
3.14 Computer Leasing Inc. Capital Leases Boston, Massachusetts 02110 Assignment Consent received
3.14 Computer Systems of America Capital Leases Boston, Massachusetts 02110 Not Transferred - 90 day
sublet from SunRiver
3.14 Graybar Financial Services Capital Leases 201 West Big Beaver Rd. Purchase portion related to
Suite 800 G60 & Suite 100
Troy, Michigan 48084
(810) 689-7000
3.14 High-Tech Leasing Inc. Capital Leases 8 Boulevard Street Apportioned - refer to
Milton, MA 02186 Schedules #1 & #2
(617) 696-3203
3.14 Koger Equity Operating Leases Leasing & Management Office Assignment received for G60
3420 Executive Center Dr. & Suite 100
Austin, TX 78731
(512) 345-1893
3.14 Pitney Bowes Credit Corp. Operating Leases 201 Merritt Seven Not Transferred
Norwalk, CT 06856-5151
3.14 AT&T Capital Corp. Operating leases P.O. Box 96064 Assignment received for
Bellevue, WA 98009 S510528-00010,-00021,-00050
(800) 426-9973
3.14 CDP Imaging Systems Operating Leases 2120 Denton Drive Not Transferred
Suite 102
Austin, TX 78758
(512) 834-2679
3.14 UUNET Operating Leases 3060 Williams Dr No consent required
Fairfax, VA 22031
3.14 AT&T Wireless Operating Leases 1120 Loop 360 Apportioned
Austin, TX 78746
</TABLE>
<PAGE> 34
<TABLE>
<S> <C> <C>
3.14 Sanwa Leasing Corp Capital Lease P.O. Box 371992 Not transferred
Pittsburgh, PA 15250-7992
3.14 Sybase/JLA Credit Corp Operating Leases 970 West 190th Street Assignment Consent Pending
Torrance, CA 90502
3.14 Berthal Fisher Corp Operating Leases Telecommunication Income Not transferred
Fund IX, LP
Box 780292
Milwaukee, WI 53278-0292
</TABLE>
<PAGE> 35
6 C. - I.P. LICENSES & AGREEMENTS
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
File Name Type Address
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1. USE TRADEWAVE I.P.
3.3 Northern Telecom Inc. Reseller Agreement 1000 Park Forty Plaza
Durham, North Carolina 27717
(919) 992-5000
3.3 Northern Telecom Inc. Teaming Agreement 1000 Park Forty Plaza
Durham, North Carolina 27717
(919) 992-5000
3.7 LJL Enterprises, Inc. VAR Agreement 4825 University Sqaure
Suite 6
Huntsville, AL 35816
3.7 Management Science Associates Reseller Agreement 6565 Penn Avenue
Pittsburgh, PA 15206-4490
3.8 BSG Alliance/IT, Inc. Reseller Agreement 11 Greenway Plaza
Suite 800
Houston, TX 77046-1102
3.8 BSG Alliance/IT, Inc. Principles of Cooperation
Cegelec ESCA Principles of Cooperation 11120 NE 33rd Place
Bellevue, Washington 98004
3.8 BSG Alliance/IT, Inc. Subcontracting Agreement 11 Greenway Plaza
Suite 800
Houston, TX 77046-1102
3.10 International Business Machines JTSN Outsource Services Payment Certification Technology
IBM
500 Columbus Avenue
Thornwood, NY 10594
3.10 International Business Machines Teaming Agreement Payment Certification Technology
IBM
500 Columbus Avenue
Thornwood, NY 10594
</TABLE>
<PAGE> 36
<TABLE>
<S> <C> <C>
3.13 IBEX - Global Business Alliance Inc Joint Marketing & License 55 Metcalf Street, suite 1490
Ottawa, Ontario, Canada KIP 6N4
3.21 World Clique Reseller Agreement 3539 Motor Avenue
Los Angeles, California 90034
3.22 BlueWare, Inc. Reseller Agreement P.O. Box 329
Cadillac, MI 49601
2. USE OTHER I.P.
3.11 Technologic, Inc. OEM Agreement 4170 Ashford Dunwoody Road
Suite 465
Atlanta, GA 30319
3.3 Northern Telecom Inc. Reseller Agreement 1000 Park Forty Plaza
Durham, North Carolina 27717
(919) 992-5000
3.3 Northern Telecom Inc. Teaming Agreement 1000 Park Forty Plaza
Durham, North Carolina 27717
(919) 992-5000
INTELLECTUAL PROPERTY
8.4 Paul Painter & John Hardin Patent Assignment 3636 Executive Center Drive
Austin, TX 78731
9.1 Gambrell Wilson & Hamilton, LLP Intellectual Property Audit 801 Congress Avenue
Suite 2150
Austin, TX 78701
9.3 Charles Petrie & Wayne Allen U.S. Patent 3636 Executive Center Drive
Austin, TX 78731
9.3 Paul Painter & John Hardin U.S. Patent Application 3636 Executive Center Drive
Austin, TX 78731
</TABLE>
<PAGE> 37
COPYRIGHTS
Copyright EINET
Copyright TradeWave
Copyright HealthWave
Copyright TradeAuthority*
Copyright TradeCertificate*
Copyright Galaxy*
Copyright TradeVPI*
Copyright TradeAttache*
Copyright TradeAgent*
Copyright MacWeb*
* Includes any and all prior versions and derivative works relating to
TradeWave or EINET intellectual property.
All software documentation and support materials.
All contents, prior versions and derivative works of the website.
The domain name, tradewave.com.
TRADE MARKS
Trade Mark EINET
Trade Mark TradeWave
TradeMark HealthWave
TradeMark Applications TradeAuthority
TradeCertificate
Galaxy
TradeVPI
TradeAttache
TradeAgent
MacWeb
All TradeMarks associated with TradeWave, TradeWave software, TradeWave
documentation and support materials, the TradeWave domain name, the
TradeWave website and contents, and all prior versions and derivative
works related to the TradeWave business and intellectual property.
<PAGE> 38
NON DISCLOSURE AGREEMENTS
<TABLE>
<S> <C> <C>
3.13 Sagus Security Inc Bi-Lateral NDA 180 Elgin Street, Suite 600
Ottawa, Ontario
Canada K2P 2K3
Eureka Software Solutions Joint NDA 6010 Balcones Drive, #280
Austin, Texas 78731
Chase Manhatten Banking Assoc NDA New York, New York
Mitretek NDA NAG
Northern Telecom Inc. NDA 1000 Park Forty Plaza
Durham, North Carolina 27717
(919) 992-5000
Citibank NDA with MCC 8430 W. Bryn Mawr Ave
Chigago, IL 60631
312-380-5928
Tiernan Communications Inc NDA with MCC San Diego, Ca
Planning Sciences NDA with MCC Denver CO
Wiltel Inc Mutual NDA with MCC NAG
Heck Exploration Co. NDA Texas
The Kansas City Star NDA Kansas City, Missouri
Signet Partners NDA Austin, Texas
Oracle Corporation Tri-party NDA with MCC NAG
Middleware Tri-party NDA with MCC NAG
IBEX - Global Business Alliance inc NDA 55 Metcalf Street, suite 1490
Ottawa, Ontario, Canada KIP 6N4
Morgan Guarentee Trust NDA New York, New York
IBM Corporation NDA 500 Columbus Ave
Thornwood, NY 10594
M2K NDA Austin, Texas
Maxserve NDA Delaware
Insurance Verification Network NDA NAG
First Union National Bank NDA NAG
Vitual Media Services Confidentiality Agreement NAG
Metrowerks NDA 3925 West Braker Lane, suite 310
Austin Tx 78759-7405
512-305-0439
</TABLE>
<PAGE> 39
<TABLE>
<S> <C> <C>
SBC Communications Inc NDA 175 E Houston St, room 10-H-60
San Antonio, TX 78205
210-351-5020
John Trube, Contractor NDA
Susan Barry, Contractor NDA
Kathy Wells, Contractor NDA
Louis Scalpati, Contractor NDA
Bruce Sheehan, Contractor NDA
Emmett Muckeroy, Contractor NDA
Richard Cole, Contractor NDA
Greg Balfanz NDA
</TABLE>
<PAGE> 40
6 F. - TEN LARGEST VENDORS & CUSTOMERS FOR 1996
Vendors
Barron McDonald & Wells
EMPLOYERS HEALTH
KOGER EQUITY
MCC
Coopers & Lybrand
TECHNOLOGIC
Eureka Software Solutioins
Sicola Martin
Fischbein, Badillo
Akin Gump
Customers
Happysize
Management Science Assoc.
MCC
Digital Equipment Corp
Austin Amereican Statesman
Usefulware, Inc.
BSG
IBM
ESCA Corp
World Clique
<PAGE> 41
6 G. CONTRACTS, LEASES, AGREEMENTS, & COMMITMENTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
File Name Type Address
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
2.1 Benefit America Benefit Alternatives Benefit America
P.O. Box 1365
Columbia, SC 29202-1365
(803) 731-5555
2.1 Employers Health Insurance Co. Dental Insurance 1100 Employers Blvd.
Green Bay, WI 54344
(800) 558-4444
2.1 Colonial Life & Accident Ins Co. Flexible Benefits Plan NAG
Medical Reimbursement NAG
Dependent Care NAG
3.11 Microelectronics & Computer Satisfaction Of Indebtedness 3500 West Balcones Center Dr.
Technology Corp Austin, TX 78759-6509
(512) 343-0978
3.3 Northern Telecom Inc. Reseller Agreement 1000 Park Forty Plaza
Durham, North Carolina 27717
(919) 992-5000
3.7 South Carolina Utility Site License Agreement 1426 Main Street
Columbia, SC 29201
(803) 748-3361
3.7 Performance Technology Reseller Agreement 800 Lincoln Center
7800 IH-10 West
San Antonio, TX
3.7 Management Science Associates Reseller Agreement 6565 Penn Avenue
Pittsburgh, PA 15206-4490
3.8 East Central Area Reliability (ECAR) Certification Authority Agrmnt 220 Market Avenue South
Suite 501
Canton, Ohio 44702
3.8 MAPPCOR Certification Authority Agrmnt 1111 third Avenue South
Suite 430
Minneapolis, Minnesota 55404
</TABLE>
<PAGE> 42
<TABLE>
<S> <C> <C>
3.8 Southwest Power Pool Certification Authority Agrmnt 415 North McKinley
700 Plaza West
Little Rock, AR 72205-3020
3.8 The New England Power Pool Certification Authority Agrmnt One Sullivan Road,
Holyoke, MA 01040-2841
3.8 Mid-America Interconnected Network Certification Authority Agrmnt 939 Parkview Blvd.
Lombard, Illinois 60148-3267
3.8 Public Service Company of Colorado Certification Authority Agrmnt Lookout Center
P.O. Box 1078
Golden, Colorado 80402-1078
3.8 VACAR Certification Authority Agrmnt NAG
Carolina Power & Light
South Carolina Electric & Gas
South Carolina Public Service Auth
Duke Power Company
Virginia Electric and Power
Yadkin Inc.
US. Dept Of Energy/
Southeastern Power Administration
3.8 BSG Alliance/IT, Inc. Reseller Agreement 11 Greenway Plaza
Suite 800
Houston, TX 77046-1102
3.8 BSG Alliance/IT, Inc. Principles of Cooperation
Cegelec ESCA Principles of Cooperation 11120 NE 33rd Place
Bellevue, Washington 98004
3.9 Dept Of The Air Force Award/Contract (AMII) DCMAO San Antonio
615 E. Houston St
PO Box 1040
San Antonio, TX 78294-1040
3.9 Dept Of The Air Force Award/Contract (AMII) DCMAO San Antonio
MODIFICATION 615 E. Houston St
PO Box 1040
San Antonio, TX 78294-1040
3.10 International Business Machines JTSN Outsource Services Payment Certification Technology
IBM
500 Columbus Avenue
Thornwood, NY 10594
3.10 International Business Machines Teaming Agreement Payment Certification Technology
IBM
500 Columbus Avenue
Thornwood, NY 10594
</TABLE>
<PAGE> 43
<TABLE>
<S> <C> <C>
3.11 Technologic, Inc. OEM Agreement 4170 Ashford Dunwoody Road
Suite 465
Atlanta, GA 30319
3.12 Global Business Alliance Inc. Joint Development & License 55 Metcalfe Street
Suite 1490
Ottawa, Ontario
Canada KIP 6N4
3.14 BancBoston Leasing Inc. Capital Leases 100 Federal St.
Boston, Massachusetts 02110
3.14 Graybar Financial Services Capital Leases 201 West Big Beaver Rd.
Suite 800
Troy, Michigan 48084
(810) 689-7000
3.14 High-Tech Leasing Inc. Capital Leases 8 Boulevard Street
Milton, MA 02186
(617) 696-3203
3.14 Koger Equity Operating Leases Leasing & Management Office
3420 Executive Center Dr.
Austin, TX 78731
(512) 345-1893
3.14 Pitney Bowes Credit Corp. Operating Leases 201 Merritt Seven
Norwalk, CT 06856-5151
3.14 AT&T Capital Corp. Operating leases P.O. Box 96064
Bellevue, WA 98009
(800) 426-9973
3.14 CDP Imaging Systems Operating Leases 2120 Denton Drive
Suite 102
Austin, TX 78758
(512) 834-2679
3.14 UUNET Operating Leases 3060 Williams Dr
Fairfax, VA 22031
</TABLE>
<PAGE> 44
<TABLE>
<S> <C> <C>
3.14 AT&T Wireless Operating Leases 1120 Loop 360
Austin, TX 78746
3.14 Sanwa Leasing Corp Capital Lease P.O. Box 371992
Pittsburgh, PA 15250-7992
3.14 Sybase/JLA Credit Corp Operating Leases 970 West 190th Street
Torrance, CA 90502
3.14 Berthal Fisher Corp Operating Leases Telecommunication Income
Fund IX, LP
Box 780292
Milwaukee, WI 53278-0292
3.15 Morgan Guaranty Trust Company Evaluation Agreement 60 Well Street
Suite 75 W
New York, NY 10260
3.16 Eureka Software Solutions Inc. Service Agreement 6010 Balcones Drive
Suite 280
Austin, TX 78731
3.21 World Clique Reseller Agreement 3539 Motor Avenue
Los Angeles, California 90034
3.22 BlueWare, Inc. Reseller Agreement P.O. Box 329
Cadillac, MI 49601
8.4 Paul Painter & John Hardin Patent Assignment 3636 Executive Center Drive
Austin, TX 78731
9.1 Gambrell Wilson & Hamilton, LLP Intellectual Property Audit 801 Congress Avenue
Suite 2150
Austin, TX 78701
9.3 Charles Petrie & Wayne Allen U.S. Patent 3636 Executive Center Drive
Austin, TX 78731
9.3 Paul Painter & John Hardin U.S. Patent Application 3636 Executive Center Drive
Austin, TX 78731
XX Trade Mark TradeWave
XX TradeMark HealthWave
TradeMark Applications TradeAuthority
TradeCertificate
Galaxy
TradeVPI
TradeAttache
TradeAgent
MacWeb
</TABLE>
Refer To Sched. 6 C. For NDAs
<PAGE> 45
6 H. - LICENSES & PERMITS FOR BUSINESS
- ------------------------------------------------------------------------------
File Name Type
- ------------------------------------------------------------------------------
1.1 State of Delaware Incorporation
<PAGE> 46
6 I. - OUTSTANDING JUDGMENTS & DECREES
- ------------------------------------------------------------------------------
File Name Type
- ------------------------------------------------------------------------------
None
<PAGE> 47
6 J. - LABOR AGREEMENTS
- -------------------------------------------------------------------------------
File Name Type
- -------------------------------------------------------------------------------
2.7 Donald Hackett Employment Agreements
2.7 Roy Smith Employment Agreements
2.7 Ken Wyrick Employment Agreements
2.7 Wayne Allen Employment Agreements
2.7 Kevin Gourley Employment Agreements
2.7 Doug Rosenthal Employment Agreements
2.7 Paul Painter Employment Agreements
2.7 Ken Fiduk Employment Agreements
2.7 Alexander Cavalli Employment Agreements
2.7 Patricia Friar Employment Agreements
2.7 John Hardin Employment Agreements
2.7 Clay Harris Employment Agreements
John Arisco Consulting Agreement
Chris Britton Consulting Agreement
Rich Cardona Consulting Agreement
Alex Cavalli Consulting Agreement
Lou Desmond Consulting Agreement
David Dow Consulting Agreement
David Eckelkamp Consulting Agreement
Ken Fiduk Consulting Agreement
Cynthia Gardner Consulting Agreement
Kevin Gourley Consulting Agreement
Michael Gray Consulting Agreement
John Hardin Consulting Agreement
Clay Harris Consulting Agreement
Virginia Hern Consulting Agreement
Trey Isaacks Consulting Agreement
Warren James Consulting Agreement
Evelyn Marr Consulting Agreement
Russell Martinez Consulting Agreement
Mary McCommon Consulting Agreement
Carmin McLaughlin Consulting Agreement
Tom Myers Consulting Agreement
Paul Painter Consulting Agreement
Elizabeth Robertson Consulting Agreement
Doug Rosenthal Consulting Agreement
Dale Smith Consulting Agreement
Steve Smith Consulting Agreement
Michael Strong Consulting Agreement
Eric Friar Consulting Agreement
<PAGE> 48
6 K. - OCCUPATIONAL SAFETY
- ------------------------------------------------------------------------------
File Name Type
- ------------------------------------------------------------------------------
None
<PAGE> 49
6 L. - REAL PROPERTY
- -------------------------------------------------------------------------------
File Name Type
- -------------------------------------------------------------------------------
None
<PAGE> 50
6 M. - POTENTIAL CONFLICTS TO ASSET ASSUMPTIONS
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
File Name Type Address
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
3.3 Northern Telecom Inc. Reseller Agreement 1000 Park Forty Plaza
Durham, North Carolina 27717
(919) 992-5000
3.8 BSG Alliance/IT, Inc. Reseller Agreement 11 Greenway Plaza
Suite 800
Houston, TX 77046-1102
3.8 BSG Alliance/IT, Inc. Principles of Cooperation
Cegelec ESCA Principles of Cooperation 11120 NE 33rd Place
Bellevue, Washington 98004
3.10 International Business Machines JTSN Outsource Services Payment Certification
Technology
IBM
500 Columbus Avenue
Thornwood, NY 10594
3.10 International Business Machines Teaming Agreement Payment Certification
Technology
IBM
500 Columbus Avenue
Thornwood, NY 10594
3.11 Technologic, Inc. OEM Agreement 4170 Ashford Dunwoody Road
Suite 465
Atlanta, GA 30319
3.14 BancBoston Leasing Inc. Capital Leases 100 Federal St.
Boston, Massachusetts 02110
3.14 Graybar Financial Services Capital Leases 201 West Big Beaver Rd.
Suite 800
Troy, Michigan 48084
(810) 689-7000
</TABLE>
<PAGE> 51
<TABLE>
<S> <C> <C>
3.14 High-Tech Leasing Inc. Capital Leases 8 Boulevard Street
Milton, MA 02186
(617) 696-3203
3.14 Koger Equity Operating Leases Leasing & Management Office
3420 Executive Center Dr.
Austin, TX 78731
(512) 345-1893
3.14 Pitney Bowes Credit Corp. Operating Leases 201 Merritt Seven
Norwalk, CT 06856-5151
3.14 AT&T Capital Corp. Operating leases P.O. Box 96064
Bellevue, WA 98009
(800) 426-9973
3.14 CDP Imaging Systems Operating Leases 2120 Denton Drive
Suite 102
Austin, TX 78758
(512) 834-2679
3.14 UUNET Operating Leases 3060 Williams Dr
Fairfax, VA 22031
3.14 AT&T Wireless Operating Leases 1120 Loop 360
Austin, TX 78746
3.14 Sanwa Leasing Corp Capital Lease P.O. Box 371992
Pittsburgh, PA 15250-7992
3.14 Sybase/JLA Credit Corp Operating Leases 970 West 190th Street
Torrance, CA 90502
3.14 Berthal Fisher Corp Operating Leases Telecommunication Income
Fund IX, LP
Box 780292
Milwaukee, WI 53278-0292
</TABLE>
<PAGE> 52
6 P. - ACCOUNTING PRACTICES NOT CONSISTENT WITH GAAP
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File Name Type
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None
<PAGE> 1
Exhibit 10.02
<PAGE> 2
AGREEMENT
THIS AGREEMENT is made as of the 9th day of April, 1997 by and among
TradeWave Corporation, a Florida corporation (the "Buyer"), TradeWave
Corporation, a Delaware corporation ("Seller"), and SunRiver Corporation, a
Delaware corporation ("SunRiver, and each of Seller and SunRiver Corporation a
"Covenantor" and collectively the "Coventors").
By an Agreement dated April 9, 1997 (the "Purchase Agreement"), the
Buyer agreed to purchase from Seller all those assets, properties, privileges,
rights, interests, business and goodwill owned by Seller or in which Seller has
an interest (except the Excluded Assets, as such term in defined in the Purchase
Agreement) that are used or held for use in connection with the operation of the
business of developing, marketing, licensing and supporting a suite of software
products and related services (the "BUSINESS") with such transaction being
closed on April 9, 1997 (the "Closing Date"). SunRiver executed a separate
letter agreement with Buyer on April 9, 1997 relating to the Purchase Agreement.
It is understood that such purchase includes the purchase of the
goodwill of the Business. Buyer would be irreparably injured if any Covenantor
were to disclose any of the confidential information concerning the business and
operations of the Business which Covenantor has or may acquire or if any
Covenantor were to enter into any business competition with the Business. The
obligations of Buyer under the Purchase Agreement are expressly subject to
certain covenants and conditions set forth therein, including the execution and
delivery of this Agreement by Covenantors and Buyer.
Therefore, In consideration of all the terms and conditions contained
herein and in the Purchase Agreement, the receipt and sufficiency of which is
hereby acknowledged, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. NONCOMPETITION.
Each Covenantor covenants and agrees that it will not, for a period of
three years after the Closing Date, without the Buyer's prior written consent,
directly or indirectly, engage in any business, enterprise or employment,
whether as owner, operator, shareholder, director, partner, creditor,
consultant, agent or any capacity whatsoever that manufactures products designed
to compete directly with the Business purchased by Buyer, or similar business
conducted by Buyer's parent company or any of Buyer's affiliated companies (the
Buyer, its parent company and affiliated companies are hereafter referred to as
the "Affiliated Companies") or markets such products anywhere in the world where
the Affiliated Companies (i) are engaged in business or (ii) have evidenced an
intention of engaging in business. Buyer acknowledges and agrees that the nature
of the geographical restrictions are reasonable given the international nature
of the Affiliated Companies' business. Notwithstanding the foregoing provisions
of this Section 1, either Covenantor may
<PAGE> 3
invest in a company that would be deemed to be a competitor as described in the
previous sentence ("Competitor"), so long as the Covenantor would not be deemed
an "affiliate" of the Competitor as defined by the Securities Act of 1933, as
amended, or the rules promulgated thereunder.
2. CONFIDENTIALITY
Each Covenantor hereby agrees to hold in strict confidence all secret or
confidential information (other than such information as is publicly available
from a source other than such Covenantor or its officers and director, if
applicable) relating to the Business and not, without the prior written consent
of Buyer, to disclose such information to anyone other than (i) disclosure to
Buyer and those designated by Buyer, and (ii) any disclosure which is required
by law.
3. NONSOLICITATION
Each Covenentor agrees that it will not, for a period of three years
from the date hereof, directly or indirectly, for itself or for any other person
or entity (i) cause any employee of Buyer to breach such employee's fiduciary
duties to or business relationship with Buyer, (ii) attempt to employ, employ or
enter into any contractual arrangement with any employee or former employee of
the Seller or the Business or the Buyer unless such employee or former employee
has not been employed by Seller or an Affiliated Company for a period in excess
of six months or (iii) call on or solicit any of the actual or targeted
prospective Customers (as hereafter defined) of the Business or an Affiliated
Company with respect to any matters related to or competitive with the Business
or the Buyer. For the purposes of this subsection, the term "Customer" shall
mean any individual or entity to whom Seller, within one year prior to the
Closing Date, has provided products or services in any way related to the
Business.
4. ENFORCEABILITY
a) Each Covenantor agrees and warrants that the covenants
contained herein are reasonable, that valid consideration has
been and will be received therefor and that the agreements set
forth herein are the result of arms-length negotiation between
the parties hereto.
b) Each Covenantor acknowledges that in the event of any
violation of the covenants contained in Section 1, 2, or 3
hereof, Buyer's damages will be difficult to ascertain and
Buyer's remedy at law will be inadequate. Accordingly, each
Covenantor agrees that, in addition to such remedies as Buyer
may have at law, Buyer shall be entitled to specific
performance of such covenants and to an injunction, without
the posting of a bond, to prevent any continuing violation
thereof.
2
<PAGE> 4
c) If any provision of or covenant contained in this Agreement is
hereafter construed to be invalid or unenforceable in any
jurisdiction, the same shall not affect the remainder of the
provisions or the enforceability thereof in any other
jurisdiction, which shall be given full effect, without regard
to the invalidity or unenforceability in such other
jurisdiction. If any provision of or covenant contained in
this Agreement is held to be unenforceable in any jurisdiction
because of the duration or geographical scope thereof, the
parties agree that the court making such determination shall
have the power to reduce the duration or geographical scope of
such provision or covenant and, in its reduced form, said
provision or covenant shall be enforceable; provided, however,
that the determination of such court shall not affect the
enforceability of such provision or covenant in any other
jurisdiction.
5. BINDING AGREEMENT.
This Agreement shall be binding upon, and inure to the benefit of
Covenantors and the Buyer and their respective heirs and permitted successors
and assigns.
6. CONSOLIDATION, MERGER, OR SALE OF ASSETS
Nothing in this Agreement shall preclude Buyer from consolidating or merging
into or with, or transferring all or substantially all of its assets or the
assets associated with the Business to another corporation or other entity which
assumes this Agreement and all obligations and undertakings of Buyer hereunder.
In addition, nothing shall preclude Buyer from changing its name at any time
after the date hereof. Upon such a consolidation, merger, transfer of assets and
assumption, or name change, the term the "Buyer" as used herein, shall mean such
corporation or other business entity, and this Agreement shall continue in full
force and effect.
7. WAIVER OF COMPLIANCE; CONSENTS
Except as otherwise provided in this Agreement, any failure of any of the
parties to comply with any obligation, representation, warranty, covenant,
agreement or condition herein may be waived by the party entitled to the
benefits thereof only by a written instrument signed by the party granting such
waiver, but such waiver or failure to insist upon strict compliance with such
obligation, representation, warranty, covenant, agreement or condition shall not
operate as a waiver of, or estoppel with respect to, any subsequent or other
failure. Whenever this Agreement requires or permits consent by or on behalf of
any party hereto, such consent shall be given in writing in a manner consistent
with the requirements for a waiver of compliance as set forth in this Section 7.
3
<PAGE> 5
8. MISCELLANEOUS TERMS AND COVENANTS
a) Counterparts. This Agreement may be executed in one or more
counterparts, none of which need contain the signatures of all
parties, each of which shall be deemed an original, and all of
which together shall constitute one and the same instrument.
It shall not be necessary in making proof of this Agreement to
produce or account for more than the number of counterparts
containing the respective signatures of, or on behalf of, all
of the parties hereto.
b) Gender. This agreement uses pronouns in the neuter gender to
refer to all parties. It is understood that one or more
parties to this Agreement are individuals, and the neuter
shall be deemed also to serve as a masculine or feminine
pronoun, as appropriate.
c) Governing law. This agreement shall be governed by the laws of
the State of Florida, excluding its choice of law rules.
d) Third Party Beneficiary. The Affiliated Companies shall be
deemed to be third party beneficiaries of this agreement,
entitled to enforce the provisions hereof against the
Covenantors.
e) Notices. All notices and other communications hereunder shall
be in writing and shall be deemed to have been given when (i)
delivered by hand; (ii) acknowledgment of receipt is sent by
the party to whom a facsimile transmission was sent or (iii)
on the third business day after being mailed by registered or
certified mail (return receipt requested), postage prepaid, to
the parties at the following addresses (or at such other
address for a party as shall be specified by like notice):
If to Seller:
TradeWave Corporation
c/o Sun River Corporation
9430 Research Boulevard
Echelon IV, Suite 200
Austin, Texas 79759-6543
Attention: Wayne Schroeder
4
<PAGE> 6
Copies to:
Byron L. Willeford, Esq.
Chamberlain, Hrdlicka, White, Williams & Martin
1200 Smith St., Suite 1400
Houston, TX 77002
If to SunRiver Corporation
Sun River Corporation
9430 Research Boulevard
Echelon IV, Suite 200
Austin, Texas 79759-6543
If to Buyer:
TradeWave Corporation
CyberGuard Corporation
West Cypress Creek Road
Fort Lauderdale, Florida 33309
The parties have caused this Agreement to be executed and delivered as
of the date first above written.
TRADEWAVE CORPORATION, a Florida corporation
/s/ Robert L. Carberry
By: Robert L. Carberry
TRADEWAVE CORPORATION, a Delaware corporation
/s/ Wayne Schroeder
By: Wayne Schroeder
SUNRIVER CORPORATION
/s/ Wayne Schroeder
By: Wayne Schroeder
5
