EXHIBIT-2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT, dated as of June 28 2002 (the "AGREEMENT DATE"), is by
and among SECURITY BIOMETRICS, INC., a Nevada corporation, having a place of
business at Xxxxx 0000, 0000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, XX, Xxxxxx, X0X 0X0
("PURCHASER"), SBTI ACQUISITION CORPORATION, a Washington corporation and a
wholly-owned subsidiary of Purchaser ("ACQUISITION SUBSIDIARY"), DATADESK
TECHNOLOGIES, INC., a Washington corporation, having a place of business at
00000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx Xxxxxx, XX, XXX, 00000 ("SELLER"), and
EDINBURGH INVESTMENTS LLC, a Washington limited liability company, having a
place of business at National Securities, c/o Xxxxx Xxxxxxx, 0000 0xx Xxxxxx
0000, Xxxxxxx, XX, XXX, 00000 ("LENDER").
RECITALS
A. The Board of Directors of each of Purchaser, Acquisition Subsidiary
and the Seller believe it is in the best interests of each company and
their respective shareholders that Purchaser acquires the Seller through
the statutory merger of the Seller with the Acquisition Subsidiary (the
"MERGER") and, in furtherance thereof, have approved the Merger.
B. Pursuant to the Merger, among other things, all of the issued and
outstanding shares of capital stock of the Seller shall be converted into
the right to receive shares of common stock of the Purchaser.
C. The parties intend for the Merger to qualify as a tax-free
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986 (the "CODE").
D. Simultaneous with and as a condition to the Merger, the Board of
Directors of Purchaser, and the Manager of Lender believe that it is in the
best interests of each company and their respective shareholders or
members, as the case may be, that Purchaser acquire substantially all of
the assets of Lender on the terms and conditions provided herein.
E. Purchaser, Acquisition Subsidiary, Seller, and Lender desire to make
certain representations, warranties, covenants and other agreements in
connection with the transactions contemplated hereby (collectively, the
"TRANSACTIONS").
5
AGREEMENT
The parties hereby agree as follows:
I. MERGER AND ASSET PURCHASE
1.1 The Merger - Seller. Subject to the terms and conditions set forth
herein, at the Effective Time (as defined below), the Acquisition
Subsidiary shall merge with and into the Seller. From and after the
Closing, the separate corporate existence of the Acquisition
Subsidiary shall cease and the Seller shall continue as the surviving
corporation in the Merger ("SURVIVING CORPORATION"). The "EFFECTIVE
TIME" shall be the time at which the Surviving Corporation has filed a
certificate of merger or other appropriate documents prepared and
executed in accordance with the Washington Business Corporations Act
(the "CERTIFICATE OF MERGER") with the Secretary of State of the State
of Washington. The Merger shall have the effects set forth in Section
23B.11.060 of the Washington Business Corporations Act.
1.2 The Asset Purchase - Lender. Subject to the terms and conditions of
this Agreement, at the Closing described in Section 1.3 of this
Agreement, Lender shall sell, transfer and deliver to the Purchaser,
and the Purchaser shall accept from Lender, substantially all of the
assets, properties, rights and interests of Lender (the "Assets"),
free and clear of any pledge, lien, encumbrance, mortgage, deed of
trust, charge or other security interest. The Assets shall consist of
the following:
1.2.1 that certain secured promissory note, dated January 21, 2000,
by and between Seller and Key Bank, as subsequently assigned
to Lender, for $1,000,000 ("KEY BANK LOAN"), and any and all
security agreements or other agreements related to the Key
Bank Loan, provided, however, that certain of the personal
guarantees of the Key Bank Loan will be forgiven by Lender
prior to the Closing Date;
1.2.2 that certain secured promissory note, dated February 15, 2002,
by and between Seller and Xxxx Xxxxxxx ("XXXXXXX"), as
subsequently assigned by Xxxxxxx to Lender, for $103,000
("XXXXXXX LOAN" and together with the Key Bank Loan, the
"LOANS"), and any and all other agreements, if any, related to
the Xxxxxxx Loan; and
1.2.3 all cash assets owned by Lender less $10,000 ("CASH ASSETS"
and together with the Loans, the "ASSETS").
1.3 Closing. The closing of the Transactions ("CLOSING") shall take place
at the offices of Cairncross & Hempelmann, P.S., in Seattle,
Washington, commencing at 9:00 a.m. local time on June 28, 2002, or,
if all of the conditions to the obligations of the parties to
consummate the Transactions have not been satisfied or waived by such
date, on such mutually agreeable later date as soon as practicable
(and in any event not later than three business days) after the
satisfaction or waiver of all conditions set forth in Articles IX and
X hereof. After the Closing, Seller and Lender, at Purchaser's cost,
will execute, deliver, and acknowledge all such further instruments of
transfer and conveyance and will perform all such other acts as
Purchaser may reasonably request to effectively transfer the shares.
6
1.4 Actions at Closing. At the Closing:
1.4.1 Seller shall deliver to Purchaser and Acquisition Subsidiary
the various certificates, instruments and documents required
to by delivered by Seller pursuant to Article 9;
1.4.2 Purchaser shall deliver to Seller the various certificates,
instruments, and documents required to be delivered by
Purchaser pursuant to Article 10;
1.4.3 The Surviving Corporation shall file the Certificate of Merger
with the Secretary of State of the State of Washington;
1.4.4 Lender shall deliver and assign to Purchaser the Assets and
the various certificates, instruments and documents referred
to in Section 9.5.1;
1.4.5 Purchaser shall execute and deliver to Lender the convertible
promissory note in the principal amount of $1,680,000,
substantially in the form set forth on Exhibit C, and
Purchaser shall further execute and deliver to Lender such
other certificates, instruments and documents required to be
delivered by Purchaser pursuant to Article 10;
1.4.6 Lender shall either (a) wire, according to the payment
instructions provided on Exhibit E, or (b) provide a certified
check, in the an amount equal to the Cash Assets to Purchaser;
and
1.4.7 SBTI shall deliver executed stock option agreements to each of
the individuals, to purchase Purchaser Common Stock in the
amounts, on the vesting schedules, and at the exercise prices
as provided in Exhibit O (the options subject to such stock
option agreements are referred to herein as the "SBTI
OPTIONS").
1.5 Conversion of Shares. At the Effective Time, by virtue of the Merger
and without any action on the part of any party hereto or the holder
of any of the following securities:
1.5.1 Each share of Seller common stock ("SELLER COMMON STOCK")
issued and outstanding immediately prior to the Effective Time
shall be converted into and represent the right to receive
1.3125 shares (the "CONVERSION RATIO") of Purchaser's common
stock ("PURCHASER COMMON STOCK"). The Conversion Ratio shall
be rounded to the nearest ten-thousandth of a decimal point.
The Purchaser Common Stock issued to the Seller shareholders
pursuant to the Merger shall be referred to as the "Merger
Shares".
1.5.2 The Seller Common Stock, when so converted into Purchaser
Common Stock, shall no longer be outstanding and shall
automatically be canceled and retired and shall cease to exist
and each holder of a certificate representing any such shares
shall cease to have any rights with respect thereto, except
the right to receive the shares of Purchaser Common Stock to
be issued in consideration therefore upon the surrender of
such certificate.
7
1.5.3 The Conversion Ratio shall be adjusted to reflect
appropriately the effect of any stock split, reverse stock
split, stock dividend (including any dividend or distribution
of securities convertible into shares of Seller Common Stock),
reorganization, recapitalization, reclassification or other
like change with respect to shares of Seller Common Stock
occurring on or after the Agreement Date and prior to the
Effective Time. The Conversion Ratio is based on the total
number of shares of Seller Common Stock issued and outstanding
as of the Agreement Date as reflected on Exhibit A. In the
event that the Seller issues additional shares of Seller
Common Stock after the Agreement Date and prior to Closing
pursuant to exercise of any Options, Warrants or Other Rights
(as defined in Section 1.6 below) or otherwise (other than as
contemplated by the first sentence of this Section 1.5.3), the
Conversion Ratio shall be further adjusted so that the maximum
number of Merger Shares issuable to holders of Seller Common
Stock as a class does not exceed 11,000,000 shares of
Purchaser Common Stock, plus such number of shares of
Purchaser Common Stock issuable for any fractional shares
pursuant to Section 1.7. The allocation schedule attached
hereto and incorporated herein as Exhibit P ("ALLOCATION
SCHEDULE") sets forth the total number of shares of Seller
Common Stock issued and outstanding on the Agreement Date and,
for each Seller shareholder, the number of shares of Purchaser
Common Stock he, she or it is entitled to receive in the
Merger as determined in accordance with Sections 1.4 and 1.5.
The Merger Shares shall not exceed 11,000,000 shares of
Purchaser Common Stock, plus such number of shares of
Purchaser Common Stock issuable for any fractional shares
pursuant to Section 1.7.
1.6 Cancellation of Company Options, Warrants and Other Rights. At the
Effective Time, all then outstanding options, warrants, rights
convertible into capital stock, or similar rights to purchase capital
stock of the Seller, whether vested or unvested (the "OPTIONS,
WARRANTS AND OTHER RIGHTS"), that remain unexercised immediately prior
to the Effective Time shall be automatically terminated and canceled.
1.7 Fractional Shares. No certificates or scrip representing fractional
Merger Shares shall be issued to former Seller shareholders upon the
surrender for exchange of Certificates (as defined in Section 1.9.1).
In lieu of any fractional Merger Shares that would have otherwise been
issued, each such fraction shall be rounded up to the nearest whole
share of Purchaser Common Stock.
1.8 Dissenters' Rights.
1.8.1 Notwithstanding any provision of this Agreement to the
contrary, any shares of Seller Common Stock held by a holder
who has exercised and perfected appraisal rights for such
shares in accordance with Washington
8
law and who, as of the Effective Time, has not effectively
withdrawn or lost such appraisal rights ("DISSENTING SHARES"),
shall not be converted into or represent a right to receive
the Merger Shares, but the holder thereof shall only be
entitled to such rights as are granted by Washington Law.
1.8.2 Notwithstanding the provisions of Section 1.8.1, if any holder
of Dissenting Shares shall effectively withdraw or lose
(through failure to perfect or otherwise) his, her or its
appraisal rights, then, as of the later of the Effective Time
and the occurrence of such event, such holder's shares shall
automatically be converted into and represent only the right
to receive the number of shares of Purchaser Common Stock,
without interest thereon, upon surrender of the Certificate
representing such shares.
1.8.3 The Seller shall give Purchaser (i) prompt notice of any
written demand for appraisal received by the Seller pursuant
to the applicable provisions of Washington law and (ii) the
opportunity to participate in all negotiations and proceedings
with respect to such demands. The Seller shall not, except
with the prior written consent of Purchaser, voluntarily make
any payment with respect to any such demands or offer to
settle or settle any such demands.
1.8.4 Dissenting Shares, if any, after payments of fair value in
respect thereto have been made to dissenting stockholders of
the Seller pursuant to Washington Law, shall be canceled.
1.9 Exchange of Certificates.
1.9.1 Exchange Agent. Purchaser shall act as the exchange agent in
the Merger. As soon as practicable following the Effective
Time, Purchaser shall make available for exchange in
accordance with this Section 1.9, through such reasonable
procedures as Purchaser may adopt, the Merger Shares issuable
to the Seller shareholders upon due surrender pursuant to the
provisions of this Section 1.9 of certificates which
immediately prior to the Effective Time represented
outstanding shares of Seller Common Stock (the
"CERTIFICATES").
1.9.2 Exchange Procedures. From and after the Effective Time, each
holder of an outstanding Certificate or Certificates which
represented shares of Seller Common Stock immediately prior to
the Effective Time shall have the right to surrender each
Certificate to Purchaser and receive promptly in exchange for
all Certificates held by such holder a certificate
representing the number of whole shares of Purchaser Common
Stock into which the shares of Seller Common Stock evidenced
by the Certificates so surrendered shall have been converted
pursuant to the provisions of Section 1.5, as set forth
opposite the surrendering holder's name on the
9
Allocations Schedule. All Certificates so surrendered shall
forthwith be canceled. From and after the Effective Time,
until surrendered as contemplated by this Section 1.9, each
Certificate shall be deemed for all corporate purposes to
evidence ownership of the number of shares of Purchaser Common
Stock into which the shares of Seller Common Stock represented
by such Certificate have been converted, and shall, subject to
applicable dissenters' rights under Washington Law, have no
other rights.
1.9.3 No Further Ownership Rights in Seller Common Stock. The shares
of Purchaser Common Stock delivered upon the surrender for
exchange of Certificates representing shares of Seller Common
Stock in accordance with the terms hereof shall be deemed to
have been delivered in full satisfaction of all rights
pertaining to such Seller Common Stock. There shall be no
further registration of transfers on the stock transfer books
of the Surviving Corporation of Seller Common Stock that were
outstanding immediately prior to the Effective Time. If, after
the Effective Time, Certificates are presented to Purchaser,
the Surviving Corporation or the Exchange Agent for any
reason, they shall be canceled and exchanged as provided in
this Section 1.9, provided that the presenting holder is
listed on the Allocations Schedule as a holder of Seller
Common Stock entitled to exchange his, her or its shares
hereunder.
1.9.4 Distributions With Respect to Unexchanged Shares. No dividends
or other distributions declared or made after the Effective
Time with respect to Purchaser Series A Preferred Stock with a
record date after the Effective Time shall be paid to the
holder of any unsurrendered Certificate with respect to the
shares of Purchaser Series A Preferred Stock represented
thereby until the holder of record of such Certificate shall
surrender such Certificate. Subject to applicable law,
following surrender of any such Certificate, Purchaser shall
deliver to the record holder thereof, without interest,
certificates representing whole shares of Purchaser Series A
Preferred Stock along with the amount of any dividends or
other distributions with a record date after the Effective
Time payable with respect to such whole shares of Purchaser
Series A Preferred Stock.
1.9.5 Securities Act Compliance. The certificates for the shares of
Purchaser Common Stock to be issued in the Merger shall bear
appropriate legends to identify such privately placed shares
as being restricted under the Securities Act, to comply with
applicable state securities laws and, if applicable, to notice
the restrictions on transfer of such shares.
1.9.6 Lost, Stolen or Destroyed Certificates. In the event that any
Certificates evidencing shares of Seller Common Stock shall
have been lost, stolen or destroyed, Purchaser shall issue in
exchange for such lost, stolen or destroyed Certificates, upon
the making of an affidavit of that fact by the
10
holder thereof, the shares of Purchaser Common Stock issuable
in exchange therefor pursuant to the provision of Section 1.9.
1.9.7 No Liability. Notwithstanding anything to the contrary in this
Section 1.9, no party hereto shall be liable to a holder of
shares of Purchaser Common Stock or Seller Common Stock for
any amount properly paid to a public official pursuant to any
applicable abandoned property, escheat or similar law.
1.10 Surviving Corporation - Articles of Incorporation and Bylaws,
Directors and Officers.
1.10.1 The Articles of Incorporation of the Surviving Corporation
immediately following the Effective Time shall be the same as
the Articles of Incorporation of the Acquisition Subsidiary
immediately prior to the Effective Time, except that (1) the
name of the corporation set forth therein shall be changed to
"Datadesk Technologies, Inc." and (2) the identity of the
incorporator shall be deleted.
1.10.2 The Bylaws of the Surviving Corporation immediately following
the Effective Time shall be the same as the Bylaws of the
Acquisition Subsidiary immediately prior to the Effective
Time, except that the name of the corporation set forth
therein shall be changed to "Datadesk Technologies, Inc.".
1.10.3 The directors and officers of the Surviving Corporation
immediately following the Effective Time shall be the same as
the directors and officers in office of the Acquisition
Subsidiary immediately prior to the Effective Time, each to
hold office in accordance with the Articles of Incorporation
and Bylaws of the Surviving Corporation.
1.11 No Further Rights. From and after the Effective Time, no shares of
Seller Common Stock that were issued and outstanding immediately prior
to the Effective Time shall be deemed to be outstanding, and holders
of certificates shall cease to have any rights with respect thereto,
except as provided herein or by law.
1.12 Closing of Transfer Books. At the Effective Time, the stock transfer
books of the Seller shall be closed and no transfer of shares of
Seller Common Stock shall thereafter be made. If, after the Effective
Time, certificates representing shares of Seller Common Stock are
presented to Purchaser, the Surviving Corporation or the Exchange
Agent, they shall be cancelled and exchanged for shares of Purchaser
Common Stock in accordance with Section 1.9.
1.13 Additional Action. The Surviving Corporation may, at any time after
the Effective Time, take any action, including executing and
delivering any document, in the name and on behalf of either the
Seller or the Acquisition Subsidiary, in order to consummate the
transactions contemplated by this Agreement.
11
1.14 Tax Consequences. It is intended by the parties hereto that the Merger
shall constitute a "reorganization" within the meaning of Section 368
of the Code. The parties hereto adopt this Agreement as a "plan of
reorganization" within the meaning of Sections 1.368-2(g) and 1.368(a)
of the United States Income Tax Regulations.
II. REPRESENTATIONS AND WARRANTIES OF THE SELLER
Except as disclosed on any exhibit attached hereto, and incorporated herein, the
Seller represents and warrants that:
2.1 Organization and Corporate Power.
2.1.1 Seller has, or at Closing will have, all the requisite
corporate power and authority as required and all material
licenses, permits and authorizations necessary to complete the
Transactions.
2.1.2 A list of Seller's shareholder is provided on Exhibit B, and
Seller agrees not to issue any additional shares after the
Agreement Date other than those disclosed on Exhibit B.
2.1.3 Seller is a corporation duly incorporated and validly existing
and in good standing under the laws of Washington.
2.1.4 Seller has all requisite corporate power and authority to
carry on its business as currently conducted.
2.2 Assets and Related Matters. As of the Agreement Date, other than in
the ordinary course of business, to the best of Seller's knowledge,
2.2.1 other than licenses with third parties entered in the ordinary
course of business, no intellectual property owned at any time
by Seller has been sold or otherwise transferred to any person
or entity;
2.2.2 the Seller has not agreed, orally or in writing, to dispose of
its assets, nor does the Seller have any outstanding options
or rights to dispose or otherwise sell its assets;
2.2.3 subject to the items disclosed and the payments to be made by
Lender as disclosed in Exhibit D, and subject to the terms of
this Agreement, Seller holds good and marketable title to the
assets, free and clear of all security interest, liens
encumbrances, or other restrictions or claims;
2.2.4 the assets of the Seller are described and listed on Exhibit
F; and
2.2.5 the receivables of the Seller are described and listed on
Exhibit Q.
12
2.3 Conduct of Business; Liabilities. To the best of Seller's knowledge,
other than the obligations to be paid by the Lender as described on
Exhibit D, the execution, delivery and performance of this Agreement
by Seller does not and will not violate, conflict with or result in
the breach of any term, condition or provision of, or require the
consent of any other person under:
2.3.1 any mortgage, loan agreement, evidence of indebtedness, or
other instrument evidencing borrowed money to which Seller has
been pledged as security; or
2.3.2 any judgment, order, or injunction of any court, arbitrator,
or governmental agency that would reasonably be expected to
affect materially and adversely affect the Transactions.
2.4 No Undisclosed Liabilities. All of the material liabilities of the
Seller including all known contingent liabilities or obligations are
include on Exhibit G.
2.5 Absence of Certain Changes. Except as contemplated or permitted by
this Agreement, after the Agreement Date and through Closing, there
has not been:
2.5.1 Any material adverse changes in the Seller; or
2.5.2 Any damage, destruction or loss, whether covered by insurance
or not, materially adversely affecting the Seller; or
2.5.3 Any sale or transfer of Assets including any tangible or
intangible asset other than in the ordinary course of
business, any mortgage or pledge or the creation of any
security interest, lien or encumbrance on any asset, or any
lease of property, including equipment, other than tax liens
with respect to taxes not yet due and contract rights of
customers in inventory; or
2.5.4 Any material transaction involving equity of the Seller,
borrowings by the Seller, dealings with insiders of the
Seller; or
2.5.5 The discharge or satisfaction of any material lien or
encumbrance or the payment of any material liability through
the sale or disposition of Assets; or
2.5.6 Any agreement to do any of the foregoing.
2.6 Title and Related Matters; No Declaration of Dividends. Other than as
disclosed on exhibits hereto, including without limitation Exhibit D,
Seller has good and marketable title to all of its assets including
property, real and personal, and other assets, free and clear of all
security interests, mortgages, liens, pledges, charges, claims or
encumbrances of any kind or character. To the best of the Seller's
13
knowledge, there has never been any declaration of any dividends which
involved the distribution of cash, other assets or shares.
2.7 Litigation. Other than as disclosed on exhibits hereto, including
without limitation Exhibit G, there are no material actions, suits,
proceedings, orders, investigations, or claims pending or, to the best
of the knowledge of Seller, assertible or overtly threatened against
the Seller, at law or in equity, or before or by any governmental
department, commission, board, bureau, agency or instrumentality.
Seller is not subject to any arbitration proceedings under collective
bargaining agreements or otherwise or, to the best of the knowledge of
Seller, any governmental investigations or inquiries; and to the best
of the knowledge of Seller, there is no basis for any of the
foregoing.
2.8 Patents, Trade Marks, Copyrights, etc. With respect to all
intellectual property included in Exhibit F, all reports, returns,
statements (including, without limitation, estimated reports, returns
or statements), and other similar filings required to be filed on or
before Closing by Seller (the "REPORTS") have been timely filed with
the appropriate governmental agencies in all jurisdictions in which
such Reports are required to be filed, and all such Reports correctly
reflect the current status of the Seller.
2.9 Compliance with Laws. To the best of the knowledge of Seller, the
Seller is, in the conduct of its business, in substantial compliance
with all applicable laws, statutes, ordinances, regulations, orders,
judgments or decrees, the enforcement of which, if Seller was not in
compliance therewith, would have a materially adverse effect on the
ability of Seller to consummate the Transactions. To the best of the
knowledge of Seller, Seller has not received any notice of any
asserted present or past failure by Seller to comply with such laws,
statutes, ordinances, regulations, orders, judgments or decrees which
may affect the ability of the parties to consummate the Closing.
2.10 No Brokers. Other than compensation payable to certain consultants and
attorneys as provided in Exhibit D, there are no, and neither will
there be, claims for brokerage commissions, finders' fees, or similar
compensation in connection with the Agreement.
2.11 Contractors and Labor Relations Matters.
2.11.1 To the best of the knowledge of Seller, no executive or key
contractor of Seller or any group of contractors of the Seller
has any plans to terminate employment with Seller;
2.11.2 No questions concerning union representation have been raised
or, to the best of the knowledge of Seller, are threatened
with respect to contractors of Seller;
2.11.3 To the best of the knowledge of Seller, no contractors of
Seller are subject
14
to non-competition, nondisclosure, confidentiality,
employment, consulting or similar agreements with persons
relating to the present business activities of the Seller.
2.12 Disclosure. To the best of the knowledge of Seller, neither this
Agreement nor any of the exhibits, schedules, attachments, written
statements, documents, certificates, or other items prepared or
supplied to Purchaser by or on behalf of Seller with respect to the
Transactions contain any untrue statement of a material fact or omit a
material fact necessary to make each statement contained herein or
therein not misleading.
2.13 Power of Attorney. No material power of attorney or similar
authorization given by Seller is presently in effect.
2.14 No Conflict with Buy-Sell. To the best of Seller's knowledge, the
transaction contemplated hereunder does not conflict with any buy-sell
agreement or such other similar agreement executed by the parties.
2.15 Personnel. Exhibit H sets forth a true and complete list of:
2.15.1 The names, titles and current salaries of all employees and
consultants of Seller;
2.15.2 The salary and wage rates (or ranges, if applicable) of all
employees and consultants of Seller;
2.15.3 All scheduled or contemplated increases in compensation or
bonuses; and
2.15.4 All scheduled or contemplated contractor promotions.
2.16 Patents, Trademarks, Trade Names, etc. Exhibit F includes an accurate
and complete list of all patents, trademarks, trade names, service
marks, and copyrights, and all applications therefore, presently owned
or held subject to license by Seller and, to the best of the knowledge
of Seller, the use thereof by Seller does not materially infringe on
any patents, trademarks, or copyrights or of any other rights of any
person. To the best of the knowledge of Seller, Seller has not
operated and is not operating its business in a manner that infringes
the proprietary rights of any other person in any patents, trademarks,
trade names, service marks, copyrights or confidential information.
2.17 Purchase Price. Notwithstanding the registration rights granted
herein, the Seller understands that the Merger Shares issued in
connection with the Merger cannot be resold in a transaction to which
the 1933 Act and state securities laws apply unless (i) subsequently
registered under the 1933 Act and applicable state securities laws or
(ii) exemptions from such registrations are available. Purchaser is
aware of the provisions of Rule 144 promulgated under the 1933 Act,
which permit limited resale of shares purchased in a private
transaction subject to the satisfaction of certain conditions.
15
III. REPRESENTATIONS AND WARRANTIES OF PURCHASER
As a material inducement to Seller and Lender to enter into this Agreement, the
Purchaser hereby represents and warrants to Seller, Seller's shareholders and
the Lender as follows:
3.1 Organization; Power. Purchaser is a corporation duly incorporated and
validly existing under the laws of the State of Nevada, and has all
requisite corporate power and authority to enter into this Agreement
and perform its obligations hereunder.
3.2 Authorization. The execution, delivery, and performance by Purchaser,
including without limitation the execution, deliver, and performance
by Xxx Xxxx, President of Purchaser, on the behalf of Purchaser, of
this Agreement and all other agreements contemplated hereby to which
Purchaser is a party have been duly and validly authorized by all
necessary corporate action of Purchaser, and this Agreement and each
other agreement, when executed and delivered by the parties thereto,
will constitute the legal, valid and binding obligation of Purchaser
enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency and
similar statutes affecting creditors' rights generally and judicial
limits on equitable remedies.
3.3 No Conflict with Other Instruments or Agreements. The execution,
delivery and performance by Purchaser of this Agreement and all other
agreements contemplated hereby to which Purchaser is a party will not
result in a breach or violation of, or constitute a default under, its
Articles of Incorporation or Bylaws or any material agreement to which
Purchaser is a party or by which Purchaser is bound.
3.4 Governmental Authorities. (i) Purchaser is not required to submit any
notice, report, or other filing with any governmental or regulatory
authority in connection with the execution and delivery by Purchaser
of this Agreement and the consummation of the Transactions and (ii) no
consent, approval or authorization of any governmental or regulatory
authority is required to be obtained by Purchaser or any affiliate in
connection with Purchaser's execution, delivery and performance of
this Agreement and the consummation of the Transactions.
3.5 Litigation. There are no actions, suits, proceedings or governmental
investigations or inquiries pending or, to the knowledge of Purchaser,
threatened against Purchaser or its properties, assets, operations or
businesses that might delay, prevent or hinder the consummation of
this purchase.
16
3.6 Investment Representations.
3.6.1 Purchaser is acquiring the shares of Seller for its own
account for purposes of investment and without expectation,
desire or need for resale and not with the view toward
distribution, resale, subdivision or fractionalization of the
shares.
3.6.2 During the course of the negotiation of this Agreement, and
until Close, the Purchaser has reviewed all information
provided to it by Seller and has had the opportunity to ask
questions of and receive answers from representatives of
Seller concerning Seller, the securities offered and sold
hereby, and this purchase and to obtain certain additional
information requested by Purchaser. Purchaser has had access
to all of the books and records of Seller, to audited and
unaudited statements, to personnel of Seller familiar with its
financial and operational issues and to bankers and accountant
familiar with Seller and its operations.
3.6.3 Purchaser understands that the shares cannot be resold in a
transaction to which the 1933 Act and state securities laws
apply unless (i) subsequently registered under the 1933 Act
and applicable state securities laws or (ii) exemptions from
such registrations are available. Purchaser is aware of the
provisions of Rule 144 promulgated under the 1933 Act which
permit limited resale of shares purchased in a private
transaction subject to the satisfaction of certain conditions.
3.6.4 Purchaser understands that no public market now exists for the
shares and that it is uncertain that a public market will ever
exist for the shares.
3.7 Brokerage. There are no claims for brokerage commissions, finders'
fees, or similar compensation in connection with this purchase based
on any arrangement or agreement entered into by Purchaser and binding
upon any of the parties hereto.
3.8 Capitalization. The authorized capital stock of the Purchaser consists
of 300,000,000 shares of Purchaser Common Stock, of which, as of the
Agreement Date, 94,193,325 shares were issued and outstanding.
Additionally, Purchaser intends to issue up to an additional 9,450,000
shares of Purchaser Common Stock, not in connection with the Merger,
on Friday, June 28 or Monday, July 1, 2002. Additionally, there are
outstanding options, warrants and other rights to purchase stock
representing the right to acquire 12,200,000 shares of Purchaser
Common Stock. All of the issued and outstanding shares of Purchaser
Common Stock were issued in compliance with applicable federal and
state securities laws.
3.9 SEC Reports and Financials. To the best of the Purchaser's knowledge,
all reports filed by the Purchaser under the Securities Exchange Act
with the SEC (such reports are collectively referred to herein as the
"PURCHASER REPORTS"), including without limitation any financial
information included therein, constitute all of the documents required
to be filed by the Buyer under Section 13 or
17
subsections (a) or (c) of Section 14 of the Exchange Act with the SEC
through the Agreement Date. The Purchaser Reports complied in all
material respects with the requirements of the Exchange Act and the
rules and regulations thereunder when filed. As of their respective
dates, the Purchaser Reports did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
3.10 Absence of Material Adverse Change. Other than as disclosed by
Purchaser to Seller and Lender prior to the Closing Date, since March
31, 2002, there has occurred no event or development which has had, or
could reasonably be expected to have in the future, a material adverse
effect on Purchaser.
3.11 Purchaser Option Plan; SBTI Options. Purchaser has a stock option plan
("OPTION PLAN"), which has been duly adopted by the Purchaser's board
of directors and which will be presented to the shareholders for their
approval at the next shareholders meeting. Purchaser has reserved for
sale and issuance an appropriate number of shares of Purchaser Common
Stock for sale and issuance upon exercise of the SBTI Options. The
SBTI Options and the shares of Purchaser Common Stock underlying the
SBTI Options qualify for exemption or have been registered under the
blue sky laws in the various states which require such exemption or
registration. Upon exercise of the SBTI Options, and upon payment of
the exercise price therefore, Purchaser shall issue stock certificates
representing the shares of Purchaser Common Stock and all such shares,
when issued in accordance with the terms of the Option Plan, shall be
validly issued, fully paid, and nonassessable. The grant of the SBTI
Options to the individuals and on the terms provided on Exhibit O, and
the execution, delivery, and performance by the Purchaser of the stock
option agreements evidencing the SBTI Options, have been duly and
validly authorized by all necessary action of Purchaser, and such
stock option agreements evidencing the SBTI Options, when executed and
delivered by the parties thereto, will constitute the legal, valid and
binding obligation of Purchaser enforceable against it in accordance
with its terms.
IV. REPRESENTATIONS AND WARRANTIES OF LENDER
As a material inducement to Purchaser to enter into this Agreement the Lender
hereby represents and warrants to Purchaser:
4.1 Lender Ownership. The owners of the Lender may or may not also be
shareholders of the Seller.
4.2 Organization; Power. Lender is a limited liability company duly
incorporated and validly existing under the laws of the State of
Washington, and has all requisite power and authority to enter into
this Agreement and perform its obligations hereunder.
18
4.3 Authorization. The execution, delivery, and performance by the Lender
of this Agreement and all other agreements contemplated hereby to
which Lender is a party have been duly and validly authorized by all
necessary action of Lender, and this Agreement and each other
agreement, when executed and delivered by the parties thereto, will
constitute the legal, valid and binding obligation of Lender
enforceable against it in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency and
similar statutes affecting creditors' rights generally and judicial
limits on equitable remedies.
4.4 No Conflict with Other Instruments or Agreements. The execution,
delivery and performance by Lender of this Agreement and all other
agreements contemplated hereby to which Lender is a party will not
result in a breach or violation of, or constitute a default under, its
Limited Liability Company Operating Agreement or any material
agreement to which Lender is a party or by which Lender is bound.
V. CONDUCT OF SELLER'S BUSINESS PENDING THE CLOSING
From the Agreement Date until the Closing, and except as otherwise consented to
or approved by Purchaser in writing, Seller covenants and agrees with Purchaser
as follows and covenants and agrees with Purchaser that Seller will not take any
action (or cause any action to be taken) which will create a conflict with any
of the following:
5.1 Regular Course of Business. Seller will operate its business in
accordance with the reasonable judgment of its management, diligently
and in good faith, consistent with past management practices, and
Seller will continue to use its reasonable efforts to keep available
the services of present officers and contractors (other than planned
retirements) and to preserve its present relationships with persons
having business dealings with it.
5.2 Distributions. Seller will not declare, pay or set aside for payment
any dividend or other distribution in respect of its capital stock.
5.3 Capital Changes. Except as provided in Exhibit B, Seller will not
issue any shares of its stock, or issue or sell any securities
convertible into or exchangeable for its stock, or options, warrants
to purchase, or rights to subscribe to any shares of its stock, or
subdivide or in any way reclassify any shares of its capital stock, or
repurchase, reacquire, cancel or redeem any such shares, except as may
be required by the terms of this Agreement.
5.4 Assets. The assets, property and rights now owned by Seller will be
used, preserved and maintained, as far as practicable, in the ordinary
course of business, to the same extent and in the same condition as
said assets, property and rights are on the Agreement Date, ordinary
wear and tear excepted, and no unusual or novel methods of
manufacture, purchase, sale, management or operation of said
properties or business or accumulation or valuation of inventory will
be made or instituted.
19
5.5 Insurance. Seller will keep or cause to be kept in effect and
undiminished any insurance in effect on the Agreement Date on its
various properties and assets.
5.6 Contractors. Seller will not grant to any contractor any promotion,
any increase in compensation or any bonus or other award other than
promotions, increases or awards that are regularly scheduled in the
ordinary course of business or contemplated on the Agreement Date.
5.7 No Violations. Seller will comply in all material respects with all
statutes, laws, ordinances, rules and regulations applicable to it in
the ordinary course of business.
5.8 Public Announcements. No press release or other announcement to the
contractors, customers or suppliers of Seller related to this
Agreement or this purchase will be issued without the joint approval
of the parties, unless required by law, in which case Purchaser and
Seller will consult with each other regarding the announcement.
VI. COVENANTS OF SELLER
Seller covenants and agrees with Purchaser as follows:
6.1 Satisfaction of Conditions. Seller will use reasonable efforts to
obtain as promptly as practicable the satisfaction of the conditions
to Closing set forth in Section 9 and any necessary consents or
waivers under or amendments to agreements by which Seller is bound.
6.2 Supplements to Appendices. From time to time prior to Closing, Lender,
and Seller will promptly supplement or amend the Exhibits with respect
to any matter hereafter arising that, if existing or occurring at the
Agreement Date, would have been required to be set forth or described
in any Exhibit and will promptly notify Purchaser of any breach by
either of them that either of them discovers of any representation,
warranty or covenant contained in this Agreement. No supplement or
amendment of any Exhibit made pursuant to this section will be deemed
to cure any breach of any representation or warranty made in this
Agreement unless Purchaser specifically agrees thereto in writing;
provided, however, that if this purchase is closed, Purchaser will be
deemed to have waived its rights with respect to any breach of a
representation, warranty, or covenant or any supplement to any Exhibit
of which it shall have been notified pursuant to this Section.
6.3 No Solicitation. Until the Closing or termination pursuant to Section
11 of this Agreement, Seller shall not, directly or indirectly,
encourage, solicit, initiate or enter into any discussions or
negotiations concerning any disposition of any of the capital stock or
all or substantially all of the assets of Seller (other than pursuant
to this Agreement), or any proposal therefore, or furnish or cause to
be furnished any information concerning Seller to any party in
connection with any transaction
20
involving the acquisition of the capital stock or assets of Seller by
any person other than Purchaser. Lender or Seller will promptly inform
Purchaser of any inquiry (including the terms thereof and the person
making such inquiry) received by any responsible officer or director
Seller after the date hereof and believed by such person to be a bona
fide, serious inquiry relating to any such proposal.
6.4 Action after the Closing. Upon the reasonable request of any party
hereto after Closing, any other party will take all action and will
execute all documents and instruments necessary or desirable to
consummate and give effect to the Transactions. These include, by way
of illustration and not by way of limitation, the following:
6.4.1 Various conditions relating to filing, payment and collecting
of refunds relating to taxes;
6.4.2 Resignations of each of the officers and directors of Seller,
unless requested otherwise by Purchaser;
6.4.3 Provisions relating to the delivery of corporate books and
records;
6.4.4 Provisions relating to treatment of confidential, proprietary
information obtained in the acquisition process; and
6.4.5 Non-interference by Lender or Seller with the post-closing
relationships between Purchaser and its vendors, suppliers,
customers and contractors.
VII. COVENANTS OF PURCHASER
Purchaser covenants and agrees with Seller and Lender as follows:
7.1 Consummation of Transactions. Purchaser agrees to use its best efforts
to cause the consummation of the Transactions in accordance with the
terms and conditions of this Agreement.
7.2 Retention of Records. Purchaser shall retain all books and records of
Seller which Purchaser receives from Seller for a period of seven (7)
years from the date of generation thereof or for a period of seven (7)
years after Closing, whichever occurs earlier. After the Closing,
Seller and its representatives shall have reasonable access to all
such books and records during normal business hours for the following
purposes: (i) tax or other regulatory purposes; or (ii) for the
purpose of identifying and photocopying documents related to
litigation or administrative matters to which Seller must respond,
either formally or informally.
7.3 Piggy back Rights. If (but without any obligation to do so) the
Purchaser proposes to register (including for this purpose a
registration effected by the Company for other Purchaser shareholders)
any of its stock under the Securities Act of 1933 in
21
connection with the public offering of such securities, the Purchaser
shall, at such time, cause to be registered all of the shares issued
in connection with this Agreement. If no registration occurs prior to
June 30, 2003, the Purchaser agrees to assist the former Seller
shareholders remove all legends restricting the re-selling of their
shares of the Purchaser.
7.4 Enforcement of Guarantees. Purchaser acknowledges that as of the
Agreement Date, Seller is in default on the Key Bank Loan for failing
to pay the Key Bank Loan by its maturity date. If Seller remains in
default under the Key Bank Loan, Purchaser shall use its reasonable
efforts to enforce any personal guarantees on the Key Bank Loan
assigned to Purchaser by Lender. If, after 90 days following the
Closing Date, such guarantees have not been paid in full or satisfied,
Purchaser shall immediately transfer all right and title in and to the
guarantees to the Lender, who shall have the right to take any lawful
action on the behalf of Purchaser to pursue collection.
VIII. COVENANTS OF LENDER
Lender covenants and agrees with Purchaser as follows:
8.1 Consummation of Agreement. Lender agrees to use its best efforts to
cause the consummation of the Transactions in accordance with the
terms and conditions of this Agreement.
IX. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF PURCHASER
Each and every obligation of Purchaser under this Agreement is subject to the
satisfaction, at or before the Closing, of each of the following conditions:
9.1 Representations and Warranties; Performance.
9.1.1 Each of the Representations and warranties made by Seller will
be true and correct in all material respects as of the Closing
with the same effect as though made at that time except for
changes contemplated, permitted or required by this Agreement;
Seller will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be
performed and complied with by them prior to Closing; and
Purchaser will have received, at the Closing, a certificate of
Seller in the form of Exhibit I, signed by the President of
Seller, stating that each of the representations and
warranties made by Seller herein is true and correct in all
material respects as of the Closing, except for changes
contemplated, permitted or required by this Agreement, and
that the Seller has performed and complied with all
agreements, covenants and conditions required by this
Agreement to be performed and complied with by them prior to
the Closing.
22
9.1.2 Seller will have obtained all consents, releases and
permissions which may be necessary for the consummation of the
Transactions.
9.1.3 Each of the Representations and warranties made by Lender will
be true and correct in all material respects as of the Closing
with the same effect as though made at that time except for
changes contemplated, permitted or required by this Agreement;
Lender will have performed and complied with all agreements,
covenants, and conditions required by this Agreement to be
performed and complied with by them prior to Closing; and
Purchaser will have received, at the Closing, a certificate of
Lender in the form of Exhibit M, signed by the manager of
Lender, stating that each of the representations and
warranties made by Lender herein is true and correct in all
material respects as of the Closing, except for changes
contemplated, permitted or required by this Agreement, and
that the Lender has performed and complied with all
agreements, covenants and conditions required by this
Agreement to be performed and complied with by them prior to
the Closing.
9.2 Litigation. No material action, suit or proceeding before any court,
governmental or regulatory authority will have been threatened or
commenced and be continuing, and no investigation by any governmental
or regulatory authority will have been commenced and be continuing,
and no action, investigation, suit or proceeding will be threatened at
the time of Closing against Seller or Purchaser or any of their
affiliates, associates, officers or directors, seeking to restrain,
prevent or change this purchase, questioning the validity or legality
of this purchase, or seeking damages in connection with this purchase.
9.3 Material Change. From the Agreement Date to the Closing, Seller shall
not have suffered any material adverse change (whether or not such
change is referred to or described in any supplement to any Exhibit to
this Agreement) in its business prospects, financial condition,
working capital, assets, liabilities (absolute, accrued, contingent,
or otherwise) or operations.
9.4 Seller's Corporate Action. Seller will have furnished to Purchaser:
9.4.1 The Articles of Incorporation and all amendments thereto and
restatements thereof of Seller certified by the official
having custody over corporate records in the jurisdiction of
incorporation of the corporation in question;
9.4.2 The current Bylaws and minutes of all meetings and consents of
shareholders and directors of Seller;
9.4.3 Each certificate of qualification to do business as a
Washington corporation of Seller;
9.4.4 All known existing stock transaction records of Seller; and
23
9.4.5 A certificate of the Secretary or Assistant Secretary of
Seller, attached hereto as Exhibit J, as to the accuracy,
currency and completeness of each of the above documents, the
incumbency and signatures of officers of Seller, the absence
of any amendment to the Articles of Incorporation of Seller
and the absence of any proceeding for dissolution or
liquidation of Seller.
9.5 Lender's Corporate Action. Lender will have furnished to Purchaser:
9.5.1 A certificate of the manager of Lender, attached hereto as
Exhibit N, as to the accuracy, currency and completeness of
each of the above documents, the incumbency and signatures of
officers of Lender and the absence of any proceeding for
dissolution or liquidation of Lender.
X. CONDITIONS PRECEDENT TO THE OBLIGATIONS OF SELLER AND LENDER
Each and every obligation of Seller and Lender under this Agreement is subject
to the satisfaction, at or before Closing, of each of the following conditions:
10.1 Representations and Warranties; Performance. Each of the
Representations and warranties made by Purchaser will be true and
correct in all material respects as of the Closing with the same
effect as though made at that time except for changes contemplated,
permitted or required by this Agreement; Purchaser will have performed
and complied with all agreements, covenants, and conditions required
by this Agreement to be performed and complied with by them prior to
Closing; and each of Seller and Lender will have received, at the
Closing, a certificate of Purchaser in the form of Exhibit K, signed
by the President or other authorized agent of Purchaser, stating that
each of the representations and warranties made by Purchaser herein is
true and correct in all material respects as of the Closing, except
for changes contemplated, permitted or required by this Agreement, and
that Purchaser has performed and complied with all agreements,
covenants and conditions required by this Agreement to be performed
and complied with by them prior to the Closing.
10.2 Litigation. No material action, suit or proceeding before any court
(other than suits seeking monetary damages only and in the aggregate
sum of less than $10,000), governmental or regulatory authority will
have been threatened or commenced and be continuing, and no
investigation by any governmental or regulatory authority will have
been commenced and be continuing, and no action, investigation, suit
or proceeding will be threatened at the time of Closing against
Acquisition Subsidiary or Purchaser or any of their affiliates,
associates, officers or directors, seeking to restrain, prevent or
change this purchase, questioning the validity or legality of this
purchase, or seeking damages in connection with this purchase.
10.3 Corporate Action. Purchaser will have furnished to each of Seller and
Lender a copy, certified by the Secretary or Assistant Secretary of
Purchaser, of the
24
resolutions of Purchaser authorizing the execution, delivery and
performance of this Agreement, together with a certificate of the
Secretary or Assistant Secretary of Purchaser, attached hereto as
Exhibit L, as to the accuracy, currency and completeness of such
resolutions, the incumbency and signatures of officers of Purchaser,
and the absence of any proceeding for dissolution or liquidation of
Purchaser.
10.4 Material Change. From the Agreement Date to the Closing, Purchaser
shall not have suffered any material adverse change (whether or not
such change is referred to or described in any supplement to any
Exhibit to this Agreement) in its business prospects, financial
condition, working capital, assets, liabilities (absolute, accrued,
contingent, or otherwise) or operations.
XI. TERMINATION
11.1 Termination for Cause. If, pursuant to the provisions of Sections 9,
10, or 11 of this Agreement, Lender, Seller or Purchaser is not
obligated at the Closing to consummate this Agreement, then the party
who is not so obligated may terminate this Agreement.
11.2 Termination without Cause. Anything herein or elsewhere to the
contrary notwithstanding, this Agreement may be terminated and
abandoned at any time without further obligation or liability on the
part of any party in favor of any other by mutual consent of Lender,
Purchaser, Acquisition Subsidiary and Seller.
11.3 Termination Procedure. Any party having the right to terminate this
Agreement due to a failure of a condition precedent contained in
Sections 9, 10, or 11 hereto may terminate this Agreement prior to
Closing by delivering to the other party written notice of
termination, and thereupon, this Agreement will be terminated without
obligation or liability of any party.
XII. INDEMNIFICATION
12.1 Seller's Indemnity. Subject to the terms of this Section, Seller
hereby agrees to indemnify, defend and hold harmless Purchaser and its
officers, directors, agents, attorneys, accountants and affiliates
from and against any and all losses, claims, obligations, demands,
assessments, penalties, liabilities, costs, damages, reasonable
attorneys' fees and expenses (Damages) asserted against or incurred by
Purchaser by reason of or resulting from a breach by Seller or Lender
of any representation, warranty or covenant contained herein, or in
any agreement executed pursuant thereto.
12.2 Limitations on Seller's Indemnification Obligations.
12.2.1 Purchaser and its successors and permitted assigns shall not
be entitled to indemnification under this Section unless a
claim has been asserted by
25
written notice delivered to Seller on or prior to the twenty
four (24) month anniversary of the Closing, specifying the
details of such alleged breach.
12.2.2 Seller shall have no indemnification obligation under this
Section unless and until the aggregate amount recoverable
against Seller exceeds $50,000, in which event Seller shall be
responsible for all amounts recoverable in excess of said
$50,000 aggregate amount.
12.3 Purchaser's Indemnity. Subject to the terms of this Section, Purchaser
hereby agrees to indemnify, defend and hold harmless Seller and Lender
and their managers, officers, directors, agents, attorneys,
accountants and affiliates from and against any and all losses,
claims, obligations, demands, assessments, penalties, liabilities,
costs, damages, reasonable attorneys' fees and expenses (Damages)
asserted against or incurred by Seller or Lender by reason of or
resulting from a breach by Purchaser of any representation, warranty
or covenant contained herein, or in any agreement executed pursuant
thereto.
12.4 Conditions of Indemnification. The respective obligations and
liabilities of Seller, Lender, and Purchaser (Indemnifying Party) to
the other (Party to be Indemnified) under Sections 12.1, 12.2 and 12.3
hereof, with respect to claims resulting from the assertion of
liability by third parties, shall be subject to the following terms
and conditions:
12.4.1 Within Sixty (60) days (or such earlier time as might be
required to avoid prejudicing the Indemnifying Party's
position) after receipt of notice of commencement of any legal
action evidenced by service of process or other legal
pleading, the Party To Be Indemnified shall give the
Indemnifying Party written notice thereof together with a copy
of such claim, process or other legal pleading, and the
Indemnifying Party shall have the right to undertake the
defense thereof by representatives of its own choosing and at
its own expense; provided, however, that the Party To Be
Indemnified may participate in the defense with counsel of its
own choice and at its own expense. For all other claims or
demands not the subject of court or regulatory authority or
process, the Party To Be Indemnified shall give the
Indemnifying Party written notice thereof together with a copy
of any claim or demand within (10) days after receipt of the
claim or demand. The Indemnifying Party shall then have the
right to respond and undertake the defense thereof by
representatives of its own choosing and at its own expense;
provided, however, that the Party to Be Indemnified may
participate in the response and the defense of the claim or
demand with counsel of its own choice and at its own expense.
12.4.2 In the event that the Indemnifying Party, by the Seventh (7th)
day after receipt of notice of any legal action (or, if an
answer or other pleading must be served in order to prevent
judgment by default in favor of the person asserting such
claim), does not elect to defend against such legal action,
the Party To Be Indemnified will (upon further notice to the
26
Indemnifying Party) have the right to undertake the defense,
compromise or settlement of such legal action on behalf of and
for the account to the right of the Indemnifying Party to
assume the defense of such claims at any time prior to
settlement, compromise or final determination thereof. For all
other claims not the subject of court or regulatory authority
or process, if the Indemnifying Party, by the Tenth (10th) day
after receipt of notice of the claim or demand does not elect
to defend against such claim or demand, or within Ten (10)
days and not prejudiced by lack of notice of entry of default
judgment, the Party To Be Indemnified will (upon further
notice to the Indemnifying Party) have the right to undertake
the defense, compromise or settlement of such legal action on
behalf of and for the account to the right of the Indemnifying
Party to assume the defense of such claims at any time prior
to settlement, compromise or final determination thereof.
12.4.3 Anything in this Section to the contrary notwithstanding, the
Indemnifying Party shall not settle any claim without the
consent of the Party To Be Indemnified unless such settlement
involves only the payment of money and the claimant provides
to the Party To Be Indemnified a release, in a form acceptable
to the Party To Be Indemnified, from all liability in respect
of such claim. If the settlement of the claim involves more
than the payment of money, the Indemnifying Party shall not
settle the claim without the prior consent of the Party to Be
Indemnified, which consent shall not be unreasonably withheld.
12.4.4 The Party to Be Indemnified and the Indemnifying Party will
each cooperate with all reasonable requests of the other.
12.4.5 Anything in this Section to the contrary notwithstanding, the
failure of the Party To Be Indemnified to give notice as
required shall not void the right if indemnity unless the
failure to notify materially prejudices the Indemnifying
Party. For the purposes of this Section, the entry of a
default judgment constitutes material prejudice.
12.5 Remedies Not Exclusive. The remedies provided for in this Section
shall not be exclusive of any other rights or remedies available by
one party against the other, either at law or in equity.
XIII. MISCELLANEOUS PROVISIONS
13.1 Amendment and Modification. Subject to applicable law, this Agreement
may be amended, modified or supplemented only by a written agreement
signed by Purchaser, Seller, Acquisition Subsidiary and Lender.
27
13.2 Waiver of Compliance; Consents.
13.2.1 Any failure of any party to comply with any obligation,
covenant, agreement or condition herein may be waived by the
party entitled to the performance of such obligation, covenant
or agreement or who has the benefit of such condition, but
such waiver or failure to insist upon strict compliance with
such obligation, covenant, or agreement or condition will not
operate as a waiver of, or estoppels with respect to, any
subsequent or other failure.
13.2.2 Whenever this Agreement requires or permits consent by or on
behalf of any party hereto, such consent will be given in a
manner consistent with the requirements for a waiver of
compliance as set forth above.
13.3 Notices. All Notices, requests, demands and other communications
required or permitted hereunder will be in writing and will be deemed
to have been duly given when delivered by (i) hand; (ii) reliable
overnight delivery service; or (iii) facsimile transmission.
13.3.1 If to Purchaser, to: Suite #1410 - 0000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxxx, XX Xxxxxx, X0X 0X0, Fax 000-000-0000
13.3.2 If to Seller, to: 00000 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxxxxx
Xxxxxx, Xxxxxxxxxx, XXX, 00000 Fax 000-000-0000 with a copy to
Xx. Xxxxxx Xxxxxx, Xxxxxxxxxx & Xxxxxxxxxx, X.X., 000 Xxxxxx
Xxx. Xxx. 000, Xxxxxxx, XX 00000.
13.3.3 If to Lender, to: Xxxxx Xxxxxxx, National Securities, 0000 0xx
Xxxxxx 0000, Xxxxxxx, XX, XXX.
13.4 Titles and Captions. All section titles or captions contained in this
Agreement are for convenience only and shall not be deemed part of the
context nor effect the interpretation of this Agreement.
13.5 Entire Agreement. This Agreement contains the entire understanding
between and among the parties and supersedes any prior understandings
and agreements among them respecting the subject matter of this
Agreement.
13.6 Agreement Binding. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of the parties
hereto.
13.7 Attorneys' Fees. In the event an arbitration, suit or action is
brought by any party under this Agreement to enforce any of its terms,
or in any appeal there from, it is agreed that the substantially
prevailing party shall be entitled to reasonable attorneys fees to be
fixed by the arbitrator, trial court, and/or appellate court.
13.8 Computation of Time. In computing any period of time pursuant to this
Agreement, the day of the act, event or default from which the
designated period
28
of time begins to run shall be included, unless it is a Saturday,
Sunday or a legal holiday, in which event the period shall begin to
run on the next day that is not a Saturday, Sunday or legal holiday.
13.9 Pronouns and Plurals. All pronouns and any variations thereof shall
be deemed to refer to the masculine, feminine, neuter, singular or
plural as the identity of the person or persons may require.
13.10 Governing Law. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HERETO SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEVADA. THE PARTIES AGREE
THAT ANY LITIGATION RELATING DIRECTLY OR INDIRECTLY TO THIS AGREEMENT
MUST BE BROUGHT BEFORE AND DETERMINED BY A COURT OF COMPETENT
JURISDICTION WITHIN THE STATE OF NEVADA.
13.11 Arbitration. If at any time during the term of this Agreement any
dispute, difference, or disagreement shall arise upon or in respect
of this Agreement, and the meaning and construction hereof, every
such dispute, difference, and disagreement shall be referred to a
single arbiter agreed upon by the parties, or if no single arbiter
can be agreed upon, an arbiter or arbiters shall be selected in
accordance with the rules of the American Arbitration Association and
such dispute, difference or disagreement shall be settled by
arbitration in accordance with the then prevailing commercial rules
of the American Arbitration Association, and judgment upon the award
rendered by the arbiter may be entered in any court having
jurisdiction thereof.
13.12 Presumption. This Agreement or any Section thereof shall not be
construed against any party due to the fact that said Agreement or
any section thereof was drafted by said party.
13.13 Further Action. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such
action as may be necessary or appropriate to achieve the purposes of
the Agreement.
13.14 Parties in Interest. Nothing herein shall be construed to be to the
benefit of any third party, nor is it intended that any provision
shall be for the benefit of any third party.
13.15 Savings Clause. If any provision of this Agreement, or the
application of such provision to any person or circumstance, shall be
held invalid, the remainder of this Agreement, or the application of
such provision to persons or circumstances other than those as to
which it is held invalid, shall not be affected hereby.
13.16 Confidentiality. The parties shall keep this Agreement and its terms
confidential, but any party may make such disclosures as it
reasonably considers are required
29
by law or necessary to obtain financing. In the event that the
transactions contemplated by this Agreement are not consummated for
any reason whatsoever, the parties hereto agree not to disclose or
use any confidential information they may have concerning the affairs
of other parties, except for information which is required by law to
be disclosed. Confidential information includes, but is not limited
to, financial records, surveys, reports, plans, proposals, financial
information, and information relating to personnel contracts, stock
ownership, liabilities and litigation.
13.17 Costs, Expenses and Legal Fees. Whether or not the transactions
contemplated hereby are consummated, each party hereto shall bear its
own costs and expenses (including attorneys' fees), except as set
forth in the Escrow Agreement.
13.18 Severability. If any provision of this Agreement is held to be
illegal, invalid or unenforceable under present or future laws
effecting during the term hereof, such provision shall be fully
severable and this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision never comprised a
part hereof; and the remaining provisions hereof shall remain in full
force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance here from. Furthermore,
in lieu of such illegal, invalid and unenforceable provision, there
shall be added automatically as part of this Agreement a provision as
similar in nature in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and
enforceable.
13.19 Counterparts and Facsimile Signatures. This Agreement may be executed
in one or more counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument. For purposes of this Agreement, facsimile signatures
shall be treated as originals until such time that applicable pages
bearing non-facsimile signatures are obtained from the relevant party
or parties.
13.20 Continuing Nature. All representations and warranties contained in
this Agreement shall survive the Closing for a period of two (2)
years and, if applicable, all covenants, which, according to their
terms are to be performed after the execution of this Agreement,
shall survive the Closing for a period of two (2) years.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
30
[SIGNATURE PAGE TO AGREEMENT AND PLAN OF MERGER.]
DATED as of the Agreement Date above first written.
PURCHASER:
SECURITY BIOMETRICS, INC.
A Nevada corporation
By: __________________________________
Xxx Xxxx, President
SELLER:
DATADESK TECHNOLOGIES, INC.
A Washington corporation
By: __________________________________
Xxxxxx Xxxxxxx, President
LENDER:
EDINBURGH INVESTMENTS LLC
A Washington limited liability company
By: __________________________________
Xxxxx Xxxxxxx, Managing Member
31
EXHIBIT "A"
CERTIFICATION OF THE ISSUED AND OUTSTANDING SHARES OF DATADESK TECHNOLOGIES
INC.
AUTHORIZED CAPITAL: 10,000,000 common shares
5,000,000 preferred shares
0 other
ISSUED AND OUTSTANDING CAPITAL: 8,380,626 common shares
0 preferred shares
0 other
Explanation of share subscriptions received and shares to be issued between
Agreement Date and Close:
The issued and outstanding capital listed in this Exhibit A includes 100,000
shares issued to X. Xxxx, 65,000 shares issued to X. Xxxxxxx, 32,500 shares
issued to X. Xxxxxxxx, and 75,000 shares issued to X. Xxxxxxx, pursuant to the
exercise by each of these individuals of their stock options prior to the
Closing Date under their respective stock option agreements and the Seller's
stock option plan.
32
EXHIBIT "B"
LIST OF SHAREHOLDERS OF DATADESK TECHNOLOGIES INC.
----------------------------------------------------------------------------------------------------
NAME # OF SHARES HELD CLASS OF SHARES HELD
----------------------------------------------------------------------------------------------------
Add2Ventures, LLC 17,364 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxx, N. Xxxx 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx 25,000 Common stock
----------------------------------------------------------------------------------------------------
Barrat, Xxxxxx X. and Xxxx X., JTWROS 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxx X. 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx 50,000 Common stock
[issued to: B'Nai B'rith Foundation of U.S.]
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx X. 85,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxx, Xxxxxxx 40,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxx X. 200,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx X. and Xxxx X., JTWROS 54,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx 940 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx 20,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx 25,000 Common stock
[issued to: XxXxxxxx, West & Chodorow, Inc.]
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxx 15,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 70,000 Common stock
[issued to: Xxxxxx Xxxxxxx DDS, PS Profit
Sharing Plan & Trust]
----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxxxx 130,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx X. 45,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxxxxx 20,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 156,250 Common stock
----------------------------------------------------------------------------------------------------
Xxxx, Xxxxx 100,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx X. 868 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx and Xxxxxxx, JTWROS 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxx, Xxxx 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxx, Xxxx 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx and Xxxxx Xxxxxxxxx 550,000 Common stock
----------------------------------------------------------------------------------------------------
33
----------------------------------------------------------------------------------------------------
NAME # OF SHARES HELD CLASS OF SHARES HELD
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx Drew 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X. and Xxxx Xxxx X. Xxxxxx, 630,000 Common stock
JTWROS
----------------------------------------------------------------------------------------------------
XxXxxxxxx, Xxxxxx 97,500 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx X. 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx X. and Xxxxxxx X. 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx and Xxxxxx, JTWROS 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X. 828 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X. and Xxxxx J., Joint Tenants 30,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 20,000 Common stock
[issued to: Xxxxxx Xxxxxx XXX, National
Securities C/F]
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxxx 20,000 Common stock
[issued to: Xxxxxxxx Xxxxxx XXX, National
Securities C/F]
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx X. 15,000 Common stock
[issued to: Xxxxxxx X. Xxxxxxx, Xx. Revocable
Trust]
----------------------------------------------------------------------------------------------------
Pivot 29,126 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx, as his separate estate 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx-Xxxxx 12,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx 15,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx 1,007,500 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxxxxx, Xxxxxx X. 160,000 Common stock
[- 125,000 shares issued to: Xxxxxx X.
Xxxxxxxxxxx
- 35,000 shares issued to: Ringgenberg
Investments, LP]
----------------------------------------------------------------------------------------------------
Rips, Xxxxx Xxxxxx 12,500 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx 35,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxxxxx, Xxxxx X. 355,000 Common stock
[- 330,000 shares issued to: Xxxxx X.
Xxxxxxxxxxx
- 25,000 shares issued to: Xxxxx Xxxxxxxxxxx
XXX, National Securities Corporation,
Custodian]
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxx 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx X. 50,000 Common stock
[issued to: National Securities Cp. C/F
Xxxxxxx X. Xxxxxxxx XXX]
----------------------------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxx 50,000 Common stock
----------------------------------------------------------------------------------------------------
34
----------------------------------------------------------------------------------------------------
NAME # OF SHARES HELD CLASS OF SHARES HELD
----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx 200,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx 5,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 20,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx Xxxxx & Co. 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx X. 2,474,250 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx X. 210,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx X. 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx Family Foundation 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxxx 435,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx X. 12,500 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxx X. 135,000 Common stock
[- 100,00 shares issued to: National
Securities c/f Xxxxx Xxxxxxxx SEP XXX
- 35,000 shares issued to: Xxxxx X. Xxxxxxxx]
----------------------------------------------------------------------------------------------------
Xxxx, Xxxx 20,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxx (Trust U/W) 50,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxx, Xxxxx 25,000 Common stock
----------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 25,000 Common stock
----------------------------------------------------------------------------------------------------
Total Issued and outstanding by
class of share 8,380,626
----------------------------------------------------------------------------------------------------
35
EXHIBIT "C"
CONVERTIBLE DEBENTURE AGREEMENT
10% CONVERTIBLE DEBENTURE
NEITHER THIS DEBENTURE NOR THE SECURITIES ISSUABLE UPON CONVERSION HEREOF
HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES ARE
RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS
PERMITTED UNDER THE ACT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT OR
AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
[No. ____] $1,680,000
SECURITY BIOMETRICS, INC.
10% CONVERTIBLE DEBENTURE DUE JUNE 30, 2003
THIS DEBENTURE is issued by SECURITY BIOMETRICS, INC., a Nevada corporation
(the "Company"), of $1,680,000 principal amount of 10% Convertible Debentures
due June 30, 2003 (the "Convertible Debentures").
FOR VALUE RECEIVED, the Company promises to pay to EDINBURGH INVESTMENTS
LLC, or permitted assigns (the "HOLDER"), the principal sum of ONE MILLION SIX
HUNDRED EIGHTY THOUSAND AND 00/100 (US $1,680,000) DOLLARS on June 30, 2003 (the
"MATURITY DATE"), together with interest on the unpaid principal amount of this
Debenture at the rate of 10% per annum. Accrual of interest shall commence on
the first business day to occur after the date of initial issuance and continue
daily on the basis of a 365 day year until payment in full of the principal sum
has been made or duly provided for. Interest on this Debenture is payable on
September 30th, December 31st, March 31st and June 30th (each, an "Interest
Payment Date") or until the entire principal amount of this Debenture has been
paid. Interest on this Debenture will be paid in cash. The Company will make all
payments of principal or accrued interest on this Debenture, less any amounts
required by law, to be deducted, to the registered holder of this Debenture at
the address last appearing on the Debenture register maintained by the Company
(the "Debenture Register") as designated in writing by the Holder from time to
time. The forwarding of such check shall constitute a payment of principal and
interest hereunder and shall satisfy and discharge the liability for principal
and interest on this Debenture to the extent of the sum represented by such
check, plus any amounts so deducted. If the Maturity Date or any Interest
Payment Date is not a business day in the State of Nevada, then such payment
shall be made on the next succeeding business day.
36
This Debenture is subject to the following additional provisions:
1. WITHHOLDING AND ISSUANCE TAXES. The Company shall be entitled to
withhold from all payments of principal of, and interest on, this Debenture any
amounts required to be withheld under the applicable provisions of the United
States income tax laws or other applicable laws at the time of such payments,
and Holder shall execute and deliver all required documentation in connection
therewith. The issuance of certificates for shares of common stock, $.001 par
value (the "Common Stock"), of the Company upon conversion of this Debenture
shall be made without charge to the Holder for any United States issuance tax in
respect thereof, provided that the Company shall not be required to pay any tax
that may be payable in respect of any transfer involved in the issuance and
delivery of any certificate in a name other than that of the Holder of this
Debenture.
2. TRANSFER OF DEBENTURE. This Debenture has been issued subject to
investment representations of the original purchaser hereof and may be
transferred or exchanged only in compliance with the Securities Act of 1933, as
amended (the "SECURITIES ACT"), and other applicable state and foreign
securities laws. The Holder shall deliver written notice to the Company of any
proposed transfer of this Debenture. In the event of any proposed transfer of
this Debenture, the Company may require, prior to issuance of a new Debenture in
the name of such other person, that it receive reasonable transfer documentation
including legal opinions that the issuance of the Debenture in such other name
does not and will not cause a violation of the Securities Act or any applicable
state or foreign securities laws. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary. This
Debenture has been executed and delivered pursuant to an agreement among the
Company, the original Holder, SBTI Acquisition Corporation, and Datadesk
Technologies, Inc. (the "PURCHASE AGREEMENT"), and is subject to the terms and
conditions of the Purchase Agreement, which are, by this reference, incorporated
herein and made a part hereof. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Purchase
Agreement.
3. CONVERSION. The Holder of this Debenture is entitled, at its option,
to convert, at any time after the initial issuance of the Convertible
Debentures, the Principal Amount of this Debenture or any portion thereof,
together with accrued and unpaid interest on such Principal Amount, into shares
of Common Stock as follows:
(a) RIGHT TO CONVERT.
Subject to the terms, conditions, and restrictions of this
Section 3, at any time after the initial issuance of the Convertible Debentures,
the Holder of this Debenture shall have the right to convert all or any portion
of the Principal Amount of this Debenture, together with the accrued and unpaid
interest on such Principal Amount so converted, into that number of fully-paid
and nonassessable shares of Common Stock (rounded to the nearest whole share in
accordance with Subsection 3(e)), at the Conversion Rate (as defined below).
37
(b) CONVERSION RATE AND OTHER DEFINITIONS. The number of shares of
Common Stock issuable upon conversion of all or any portion of the Principal
Amount of this Debenture pursuant to Subsection (3)(a) shall be determined
according to the following formula (the "CONVERSION RATE"):
Conversion Amount
-----------------
Conversion Price
For purposes of this Debenture, the following terms shall have the
following meanings:
"CONVERSION AMOUNT" means that portion of this Debenture being
converted by such Holder.
"CONVERSION PRICE" means, as of any Conversion Date or other date of
determination, $0.30 per share.
(c) CONVERSION NOTICE. The Holder of this Debenture may exercise its
conversion right by giving a written conversion notice in the form of Exhibit A
hereto (the "CONVERSION NOTICE") to the Company's transfer agent for its Common
Stock, as designated by the Company from time to time (the "TRANSFER AGENT"),
(x) by facsimile or (y) by registered mail or overnight delivery service, with a
copy by facsimile to the Company. Upon receipt of a conversion notice from the
Holder, the Company shall make a notation on the Debenture Register as to the
remaining outstanding principal amount of the Debentures registered in the name
of the Holder which shall be conclusive and binding upon the Holder. Promptly,
but in no event more than five (5) Trading Days after the receipt of a
Conversion Notice converting the entire unpaid Principal Amount of this
Debenture, the Holder of this Debenture shall surrender this Debenture to the
Company (or such other office or agency of the Company as the Company may
designate by notice in writing to the holders of the Convertible Debentures).
38
(d) ISSUANCE OF CERTIFICATES; TIME CONVERSION EFFECTED.
Promptly, but in no event more than three (3) Trading Days after the
receipt of the Conversion Notice referred to in Subsection 3(c), the Transfer
Agent shall issue and deliver, or the Company shall cause to be issued and
delivered, to the Holder, registered in such name or names as the Holder may
direct, a certificate or certificates for the number of whole shares of Common
Stock into which this Debenture has been converted. In the alternative, if the
Transfer Agent is a participant in the electronic book transfer program, the
Transfer Agent shall credit such aggregate number of shares of Common Stock to
which the Holder shall be entitled to the Holder's or its designee's balance
account with The Depository Trust Company. Such conversion shall be deemed to
have been effected, and the Conversion Date shall be deemed to have occurred, on
the date on which such Conversion Notice shall have been received by the
Transfer Agent. The rights of the Holder of this Debenture shall cease, and the
person or persons in whose name or names any certificate or certificates for
shares of Common Stock shall be issuable upon such conversion shall be deemed to
have become the Holder or Holders of record of the shares represented thereby,
on the Conversion Date. Issuance of shares of Common Stock issuable upon
conversion that are requested to be registered in a name other than that of the
registered Holder shall be subject to compliance with all applicable federal and
state securities laws.
(e) FRACTIONAL SHARES. The Company shall not, nor shall it cause the
Transfer Agent to, issue any fraction of a share of Common Stock upon any
conversion. All shares of Common Stock (including fractions thereof) issuable
upon conversion of this Debenture by the Holder shall be aggregated for purposes
of determining whether the conversion would result in the issuance of a fraction
of a share of Common Stock. If, after such aggregation, the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company
shall cause the Transfer Agent to issue one whole share of Common Stock in
respect of such fraction of a share of Common Stock.
(f) ADJUSTMENT TO CONVERSION PRICE; DILUTION AND OTHER EVENTS. In
order to prevent dilution of the rights granted under this Debenture, the
Conversion Price will be subject to adjustment from time to time as provided in
this Subsection 3(f).
(i) ADJUSTMENT OF CONVERSION PRICE UPON SUBDIVISION OR
COMBINATION OF COMMON STOCK. If the Company at any time subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced. If the Company at any time combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Conversion Price in effect
immediately prior to such combination will be proportionately increased.
(ii) REORGANIZATION, RECLASSIFICATION, CONSOLIDATION, MERGER OR
SALE. Any recapitalization, reorganization, reclassification, consolidation,
merger, sale of all or substantially all of the Company's assets to another
Person (as defined below) or other transaction which is effected in such a way
that holders of Common Stock are entitled to receive
39
(either directly or upon subsequent liquidation) stock, securities or assets
with respect to or in exchange for Common Stock is referred to herein as an
"ORGANIC CHANGE." Prior to the consummation of any Organic Change, the Company
will make appropriate provision (in form and substance reasonably satisfactory
to the Holder) to insure that the Holder will thereafter have the right to
acquire and receive in lieu of or in addition to (as the case may be) the shares
of Common Stock otherwise acquirable and receivable upon the conversion of this
Debenture, such shares of stock, securities or assets as would have been issued
or payable in such Organic Change with respect to or in exchange for the number
of shares of Common Stock that would have been acquirable and receivable had
this Debenture been converted into shares of Common Stock immediately prior to
such Organic Change (without taking into account any limitations or restrictions
on the timing or amount of conversions). In any such case, the Company will make
appropriate provision (in form and substance reasonably satisfactory to the
Holder) with respect to the Holder's rights and interests to insure that the
provisions of this Section 3(f) will thereafter be applicable to this Debenture
(including, in the case of any such consolidation, merger or sale in which the
successor entity or purchasing entity is other than the Company, an immediate
adjustment of the Conversion Price in accordance with Subsection 3(f)(i) using
the value for the Common Stock reflected by the terms of such consolidation,
merger or sale, if the value so reflected is less than the Conversion Price in
effect immediately prior to such consolidation, merger or sale). The Company
will not effect any such consolidation, merger or sale, unless prior to the
consummation thereof, the successor entity (if other than the Company) resulting
from consolidation or merger or the entity purchasing such assets assumes, by
written instrument (in form and substance reasonably satisfactory to the
Holder), the obligation to deliver to each holder of Convertible Debentures such
shares of stock, securities or assets as, in accordance with the foregoing
provisions, such holder may be entitled to acquire. "PERSON" shall mean an
individual, a limited liability company, a partnership, a joint venture, a
corporation, a trust, an unincorporated organization and a government or any
department or agency thereof.
(iii) CERTAIN EVENTS. If any event occurs of the type
contemplated by the provisions of this Subsection 3(f) but not expressly
provided for by such provisions (including, without limitation, the granting of
stock appreciation rights, phantom stock rights or other rights with equity
features), then the Company's Board of Directors will make an appropriate
adjustment in the Conversion Price so as to protect the rights of the Holders
this Debenture and the other holders of Convertible Debentures; provided,
however, that no such adjustment will increase the Conversion Price as otherwise
determined pursuant to this Section 3(f).
4. REDEMPTION.
(a) REDEMPTION AT THE OPTION OF THE COMPANY. If at any time after
the initial issuance of the Convertible Debentures, the average of the Bid
Prices of the Common Stock for the preceding 30 consecutive Trading Days has
been at least $4.00 per share, the Company, upon notice delivered to the holders
of the then outstanding Convertible Debentures in the manner provided in
Subsection 4(b), may redeem all (but not less then all) the Convertible
Debentures (but only with respect to the Principal Amount as to which such
holders have not theretofore furnished a Conversion Notice in compliance with
Subsection 3(c), at a price (the "Optional Redemption Price") equal to the
greater of (i) the sum of (a) 110% of the Principal Amount and (b) the accrued
interest thereon.
40
(b) NOTICE OF REDEMPTION.
(i) Notice of redemption pursuant to Subsection 4(a) (the
"Redemption Notice") shall be provided by the Company to the Holder in writing
(by registered mail or overnight courier at the Holder's last address appearing
in the Debenture Register at least thirty (30) days prior to the date stipulated
by the Company for the redemption of the Convertible Debentures (the "Redemption
Date"), which notice shall specify the Redemption Date and refer to Subsection
4(a) and this Subsection 4(b).
(ii) Upon receipt of the Redemption Notice, the Holder shall have
the option, at its sole election, to specify what portion of the Convertible
Debentures called for redemption in the Redemption Notice shall be redeemed as
provided in Subsection 4(a) or converted into Common Stock in the manner
provided in Subsection 3(a). If the Holder elects to convert any portion of the
Convertible Debentures, then such conversion shall take place on the Conversion
Date specified by the Holder, but in no event after the Redemption Date, in
accordance with the terms of Subsection 3(a).
(c) SURRENDER OF CONVERTIBLE DEBENTURES. Upon any redemption of this
Convertible Debenture pursuant to Subsection 4(e), the Holder shall either
deliver the Convertible Debenture by hand to the Company at its principal
executive offices or surrender the same to the Company at such address by
express courier. Payment of the Redemption Price specified in Subsection 4(a)
shall be made by the Company to the Holder against receipt of the Convertible
Debentures by wire transfer of immediately available funds to such account(s) as
the Holder shall specify in writing to the Company. If payment of such
Redemption Price is not made in full by the Redemption Date, the Holder shall
again have the right to convert the Convertible Debentures as provided in
Section 3(a) hereof.
5. NOTICES. In case at any time:
(a) the Company shall declare any dividend upon its Common Stock
payable in cash or stock or make any other pro rata distribution to the holders
of its Common Stock; or
(b) the Company shall offer for subscription pro rata to the holders
of its Common Stock any additional shares of stock of any class or other rights;
or
(c) there shall be any capital reorganization or reclassification of
the capital stock of the Company, or a consolidation or merger of the Company
with or into, or a sale of all or substantially all its assets to, another
entity or entities; or
(d) there shall be a voluntary or involuntary dissolution,
liquidation or winding up of the Company;
then, in any one or more of said cases, the Company shall give, by first class
mail, postage prepaid, or by telex or facsimile or by recognized overnight
delivery service, addressed to the Holder at the address of the Holder as shown
on the books of the Company, (i) at least 30 days' prior written notice of the
date on which the books of the Company shall close or a record shall
41
be taken for such dividend, distribution or subscription rights or for
determining rights to vote in respect of any such reorganization,
reclassification, consolidation, merger, sale, dissolution, liquidation or
winding up and (ii) in the case of any such reorganization, reclassification,
consolidation, merger, sale, dissolution, liquidation or winding up, at least 30
days' prior written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (i) shall also specify, in the
case of any such dividend, distribution or subscription rights, the date on
which the holders of Common Stock shall be entitled thereto and (ii) shall also
specify the date on which the holders of Common Stock shall be entitled to
exchange their Common Stock for securities or other property deliverable upon
such reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up, as the case may be.
6. STOCK TO BE RESERVED. The Company has a sufficient number of shares of
Common Stock available to reserve for issuance upon the conversion of all
outstanding Convertible Debentures, assuming immediate conversion. The Company
will at all times reserve and keep available out of its authorized Common Stock,
solely for the purpose of issuance upon the conversion of all of its Convertible
Debentures as herein provided, such number of shares of Common Stock as shall
then be issuable upon the conversion of all Convertible Debentures. The Company
covenants that all shares of Common Stock that shall be so issued shall be duly
and validly issued, fully-paid and non assessable. The Company will take all
such action as may be so taken without violation of any applicable law or
regulation to have a sufficient number of authorized but unissued shares of
Common Stock to issue upon conversion of all Convertible Debentures. The Company
will not take any action that results in any adjustment of the conversion rights
if the total number of shares of Common Stock issued and issuable after such
action upon conversion of this Debenture would exceed the total number of shares
of Common Stock then authorized by the Company's Articles of Incorporation.
7. DEFAULT AND REMEDIES.
(a) EVENT OF DEFAULT. Each of the following shall constitute an
"EVENT OF DEFAULT":
(i) the Company shall default in the payment of principal or
interest on this Debenture and same shall continue for a period of five (5)
days; or
(ii) any of the representations or warranties made by the
Company herein, in the Purchase Agreement, or in any agreement, certificate
or financial or other written statements heretofore or hereafter furnished
by the Company in connection with the execution and delivery of this
Debenture or the Purchase Agreement, shall be false or misleading in any
material respect at the time made; or
(iii) the Company shall (A) admit in writing its inability to
pay its debts generally as they mature; (B) make an assignment for the
benefit of creditors or commence proceedings for its dissolution; or (C)
apply for or consent to the appointment of a trustee, liquidator or
receiver for its or for a substantial part of its property or business; or
42
(iv) a trustee, liquidator or receiver shall be appointed for
the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such
appointment; or
(v) any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency shall assume
custody or control of the whole or any substantial portion of the
properties or assets of the Company and shall not be dismissed within sixty
(60) days thereafter; or
(vi) any money judgment, writ or warrant of attachment, or
similar process in excess of One Million ($1,000,000) Dollars in the
aggregate shall be entered or filed against the Company or any of its
properties or other assets and shall remain unpaid, unvacated, unbonded or
unstayed for a period of sixty (60) days or in any event later than five
(5) days prior to the date of any proposed sale hereunder; or
(vii) bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any
law for the relief of debtors shall be instituted by or against the Company
and, if instituted against the Company, shall not be dismissed within sixty
(60) days after such institution or the Company shall by any action or
answer approve of, consent to, or acquiesce in any such proceedings or
admit the material allegations of, or default in answering, a petition
filed in any such proceeding.
(b) REMEDIES. Upon the occurrence and during the continuance of any
Event of Default, the Holder may declare this Debenture immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, anything herein or in any note or other
instruments contained to the contrary notwithstanding, and the Holder may
immediately enforce any and all of the Holder's rights and remedies provided
herein or any other rights or remedies afforded by law.
8. PAYMENT OBLIGATION UNCONDITIONAL. No provision of this Debenture shall
alter or impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of, and interest on, this Debenture at the
time, place, and rate, and in the coin or currency or shares of Common Stock,
herein prescribed. This Debenture is a direct obligation of the Company.
9. NO RECOURSE TO STOCKHOLDERS, ETC. No recourse shall be had for the
payment of the principal of, or the interest on, this Debenture, or for any
claim based hereon, or otherwise in respect hereof, against any incorporator,
shareholder, employee, officer or director, as such, past, present or future, of
the Company or any successor corporation, whether by virtue of any statute
43
or rule of law, or by the enforcement of any assessment or penalty or otherwise,
all such liability being, by the acceptance hereof and as part of the
consideration for the issue hereof, expressly waived and released.
10. NO RIGHTS AS STOCKHOLDER. No provision of this Debenture shall be
construed as conferring upon the Holder the right to vote or to receive
dividends or to consent or receive notice as a stockholder in respect of any
meeting of stockholders or any rights whatsoever as a stockholder of the
Company, unless and to the extent converted in accordance with the terms hereof.
11. DEFINITIONS. As used in this Debenture, the term "Common Stock" shall
mean and include the Company's authorized common stock, no par value, as
constituted on the issuance date of this Debenture, and shall also include any
capital stock of any class of the Company thereafter authorized that shall
neither be limited to a fixed sum or percentage of par value in respect of the
rights of the holders thereof to participate in dividends nor entitled to a
preference in the distribution of assets upon the voluntary or involuntary
liquidation, dissolution or winding up of the Company; provided that the shares
of Common Stock receivable upon conversion of this Debenture shall include only
shares designated as Common Stock of the Company on the issuance date of this
Debenture, or in case of any reorganization, reclassification, or stock split of
the outstanding shares thereof, the stock, securities or assets provided for in
Sections 3(f) and (g). Any capitalized terms used in this Debenture but not
defined herein shall have the meanings set forth in the Purchase Agreement.
12. LOSS, THEFT, DESTRUCTION OF DEBENTURE. Upon receipt of evidence
satisfactory to the Company of the loss, theft, destruction or mutilation of
this Debenture and, in the case of any such loss, theft or destruction, upon
receipt of indemnity reasonably satisfactory to the Company (which shall not
include the posting of any bond), or, in the case of any such mutilation, upon
surrender and cancellation of this Debenture, the Company shall make, issue and
deliver, in lieu of such lost, stolen, destroyed or mutilated Debenture, one or
more new Debentures of like tenor. This Debenture shall be held and owned upon
the express condition that the provisions of this Section 12 are exclusive with
respect to the replacement of mutilated, destroyed, lost or stolen Debentures
and shall preclude any and all other rights and remedies notwithstanding any law
or statute existing or hereafter enacted to the contrary with respect to the
replacement of negotiable instruments or other securities without the surrender
thereof.
13. RECORD OWNER. The Company may deem the person in whose name this
Debenture shall be registered upon the registry books of the Company to be, and
may treat such person as, the absolute owner of this Debenture for the purpose
of conversion of this Debenture and for all other purposes, and the Company
shall not be affected by any notice to the contrary. All such payments and such
conversion shall be valid and effective to satisfy and discharge the liability
upon this Debenture to the extent of the sum or sums so paid or the conversion
so made.
14. REGISTER. The Company shall maintain a transfer agent, which may be
the transfer agent for the Common Stock or the Company itself, for the
registration of Convertible Debentures. Upon any transfer of this Debenture in
accordance with the provisions hereof, the Company shall register or cause the
transfer agent to register such transfer on the Convertible Debenture register.
44
15. REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND
INJUNCTIVE RELIEF. The remedies provided in this Debenture shall be cumulative
and in addition to all other remedies available under this Debenture, at law or
in equity (including a decree of specific performance and/or other injunctive
relief). No remedy contained herein shall be deemed a waiver of compliance with
the provisions giving rise to such remedy and nothing herein shall limit a
Holder's right to pursue actual damages for any failure by the Company to comply
with the terms of this Debenture. Amounts set forth or provided for herein with
respect to payments, conversion and the like (and the computation thereof) shall
be the amounts to be received by the Holder hereof and shall not, except as
expressly provided herein, be subject to any other obligation of the Company (or
the performance thereof). The Company acknowledges that a breach by it of its
obligations hereunder will cause irreparable harm to the Holders of this
Debenture and that the remedy at law for any such breach may be inadequate. The
Company therefore agrees that, in the event of any such breach or threatened
breach, the Holders of this Debenture shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.
16. CONSTRUCTION. This Debenture shall be deemed to be jointly drafted by
the Company and the initial Holders of the Convertible Debentures and shall not
be construed against any person as the drafter hereof.
17. FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of
the Holder of this Debenture in the exercise of any power, right or privilege
hereunder shall operate as a waiver thereof (except to the extent that such
power, right or privilege must, in accordance with the terms of this Debenture,
be exercised within a specified period of time and such period of time has
lapsed without such power, right or privilege being exercised), nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege.
18. GOVERNING LAW. This Debenture shall be governed by and construed in
accordance with the laws of the State of Nevada. Each of the parties consents to
the jurisdiction of the Nevada or the state courts of the State of Nevada, in
connection with any dispute arising under this Agreement and hereby waives, to
the maximum extent permitted by law, any objection, including any objection
based on forum non conveniens, to the bringing of any such proceeding in such
jurisdictions.
19. REGISTRATION RIGHTS. If (but without any obligation to do so) the
Purchaser proposes to register (including for this purpose a registration
effected by the Company for other Purchaser shareholders) any of its stock under
the Securities Act of 1933 in connection with the public offering of such
securities, the Purchaser shall, at such time, cause to be registered all of the
shares issuable upon conversion of with this Agreement. If no registration
occurs prior to June 30, 2003, the Purchaser agrees register such shares upon
written demand of Holder and, if applicable, assist the Holder remove all
legends restricting the re-selling of its shares of the Purchaser.
45
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: June ____, 2002 SECURITY BIOMETRICS, INC.
By:_________________________________
Name: Xxx Xxxx
Title: President and Chief
Executive Officer
Attest:
________________________________
Secretary
46
EXHIBIT A
TO CONVERTIBLE DEBENTURE AGREEMENT
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $ ________________ of
the principal amount of the above Debenture No. ___ into Shares of Common Stock
of Security Biometrics, Inc. (the "Company") according to the conditions hereof,
as of the date written below.
Date of Conversion _____________________________________________________________
Applicable Conversion Price ___________________________________________________
Accrued Interest________________________________________________________________
Number of shares to be issued:__________________________________________________
Signature_______________________________________________________________________
[Name]
Address for delivery of shares or DTC account number for deposit of shares:
________________________________________________________________________________
47
EXHIBIT "D"
LIST OF APPROVED PAYMENTS BY LENDER
1. The principal balance of the Loans ($1,103,000).
2. Actual interest, fees penalties and other costs and expenses paid to Key
Bank to acquire the Loans ($37,500).
3. Cash advanced to Seller by Xxxxxx and Xxxxxxx ($50,000).
4. Repayment of loan without interest from Xxxxx Xxxxxxx to Datadesk
($25,000).
5. Actual amounts advanced to settle other Seller obligations as required to
complete the Transactions. These are items are currently Seller
liabilities. The only item currently identified in this category is $39,000
due to Cairncross & Hempelmann, P.S. which has been settled for a cash
payment of $20,000. No other payments will be made under this provision
without the prior written agreement of Purchaser. ($20,000).
6. Actual Transaction costs advanced on behalf of Seller. ($95,000.00)
7. Working capital to be retained by the Lender is $10,000.
8. Any additional amounts advanced at the request of Purchaser and Seller,
including without limitation $15,000 agreed upon by Purchaser, Seller and
Lender on June 20, 2002. ($15,000).
9. Loan commissions paid to Xxxxx Xxxxxx ($19,100).
48
EXHIBIT "E"
PAYMENT INSTRUCTIONS FOR LENDER TO PURCHASER
WIRING INSTRUCTIONS
HSBC
0000 XXXXXXXX XXXXXX
XXXXX XXXXXXXXX XX XXXXXX
BRANCH NUMBER 016
ACCOUNT NUMBER 098921 070
SWIFT BIC CODE HJKBCCATT
49
EXHIBIT "F"
LIST OF ASSETS AND LOCATION OF ASSETS OF DATADESK TECHNOLOGIES INC.
---------------------------------------------------------------------------------------------
DESCRIPTION OF ASSET COST BOOK VALUE LOCATION
---------------------------------------------------------------------------------------------
Mac 101 Mold $140,000 $0 Datadesk
---------------------------------------------------------------------------------------------
Trackboard/Numeric Keypad & $45,000 $0 Idaho
Keycap Mold
---------------------------------------------------------------------------------------------
Smartboard $150,000 $0 Taiwan - Pan Pacific
---------------------------------------------------------------------------------------------
Littlefingers Enclosures & $250,000 $0 Taiwan - Pan Pacific
Keycap Molds
---------------------------------------------------------------------------------------------
Trackboard Trackball Mold $15,000 $0 Taiwan - Pan Pacific
---------------------------------------------------------------------------------------------
Keyboard - PCB Tooling $15,000 $0 Taiwan - Pan Pacific
---------------------------------------------------------------------------------------------
Office Equipment $26,000 $17,000 Datadesk
---------------------------------------------------------------------------------------------
Computer Equipment $33,000 $18,000 Datadesk
---------------------------------------------------------------------------------------------
Equipment General $27,000 $8,000 Datadesk
---------------------------------------------------------------------------------------------
Little Fingers Patent Datadesk
---------------------------------------------------------------------------------------------
Smartboard Patent Datadesk
---------------------------------------------------------------------------------------------
Mini-Keyboard Intellectual $275,000 Datadesk
Property (Exclusive Technology
License Agreement
---------------------------------------------------------------------------------------------
Misc. Inventory $108,793.89 $108,793.89 Datadesk
---------------------------------------------------------------------------------------------
50
EXHIBIT "G"
AGED LISTING OF LIABILITIES INCLUDING COMMITMENTS AND
CONTINGENT LIABILITIES OF DATADESK TECHNOLOGIES INC.
AND COMMENTS
---------------------------------------------------------------------------------------------
DESCRIPTION OF LIABILITY/ AMOUNT AGING IN COMMENTS
COMMITMENT/CONTINGENCY DAYS
---------------------------------------------------------------------------------------------
Alt Software Inc. $16,800.00 31-60
---------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx $1,306.23 90+
---------------------------------------------------------------------------------------------
AT&T Long Distance $426.66 0-30
---------------------------------------------------------------------------------------------
AT&T Wireless $188.73 0-30
---------------------------------------------------------------------------------------------
Xxxx Xxxxxx $1,461.00 90+
---------------------------------------------------------------------------------------------
Bainbridge Disposal $33.88 31-60
---------------------------------------------------------------------------------------------
Bainbridge Floor Covering $445.00 90+
---------------------------------------------------------------------------------------------
CMP Media LLC $23,885.00 90+
---------------------------------------------------------------------------------------------
Xxxxx Xxxx $600.00 90+
---------------------------------------------------------------------------------------------
Data Specialties Co Ltd $52,792.58 90+
---------------------------------------------------------------------------------------------
Digi-Key Corporation $82.88 0-30
---------------------------------------------------------------------------------------------
Xxxxxxxxxxx & Co $104,040.12 90+ The third party
publications listed may
(CMP) Tech Learning bring suit to collect
on this debt.
ESchool News
Media & Methods
New Yorker
---------------------------------------------------------------------------------------------
Federal Express Corp $116.79 31-60
---------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx $592.44 90+
---------------------------------------------------------------------------------------------
Xxxxx Xxxx $2,785.58 90+
---------------------------------------------------------------------------------------------
Hecny Transportation Inc. $5,867.27 90+
---------------------------------------------------------------------------------------------
IDG World Expo $6,750.00 90+
---------------------------------------------------------------------------------------------
NECC 2002 Exhibits $1,200.00 90+
---------------------------------------------------------------------------------------------
Nuhill Technologies, Inc. $5,185.00 90+ This debt has been
turned over to a
collection agency.
---------------------------------------------------------------------------------------------
Office Lease Continuing liability.
---------------------------------------------------------------------------------------------
51
----------------------------------------------------------------------------------------------
DESCRIPTION OF LIABILITY/ AMOUNT AGING IN COMMENTS
COMMITMENT/CONTINGENCY DAYS
----------------------------------------------------------------------------------------------
Olympic Paper $418.12 31-60
----------------------------------------------------------------------------------------------
Pan Pacific Data $212,944.00 90+
----------------------------------------------------------------------------------------------
Partner Tech USA, Inc. $16,712.00 90+
----------------------------------------------------------------------------------------------
Xxxxxxx X. Xxxxx PC $2,495.20 61-90
----------------------------------------------------------------------------------------------
Pivot Group, Inc. $62,952.95 90+ Seller has received a
demand letter for
payment from Pivot
Group, Inc.'s attorney.
----------------------------------------------------------------------------------------------
Plastic Model Engineering $1,999.28 0-30
----------------------------------------------------------------------------------------------
Productivity, Inc. $2,600.00 90+
----------------------------------------------------------------------------------------------
Xxxxx Brein $13,815.72 90+
----------------------------------------------------------------------------------------------
Qwest Communications Q $339.45 0-30
----------------------------------------------------------------------------------------------
Radar, Inc. $72.80 0-30
----------------------------------------------------------------------------------------------
Xxxxx Xxxxx (Digital Age $5,000.00 90+ The amount of this debt
Communications) is in dispute; Digital
age communications
claims that the debt is
in excess of $20,000.
The parties may litigate
this matter.
----------------------------------------------------------------------------------------------
Xxxxx Xxxx $143.88 90+
----------------------------------------------------------------------------------------------
Seligmann & Xxxxxxxxxx $9,771.96 90+
----------------------------------------------------------------------------------------------
Sound Reprographics, Inc. $287.53 31-60
----------------------------------------------------------------------------------------------
TCEA 2002 Ventura Education $700.00 90+
----------------------------------------------------------------------------------------------
UPS (United Parcel Service) $2,027.35 31-60
----------------------------------------------------------------------------------------------
TOTAL $594,600.01
----------------------------------------------------------------------------------------------
52
EXHIBIT "H"
LIST OF EMPLOYEES AND CONSULTANTS
--------------------------------------------------------------------------------
NAME SALARY START DATE DATADESK OPTIONS
--------------------------------------------------------------------------------
Xxxxxx Xxxxxxx 100,000 1997 None
--------------------------------------------------------------------------------
Xxxxx Xxxx 40,000 1997 100,000
--------------------------------------------------------------------------------
Xxxx Xxxxx 75,000 2000 None
--------------------------------------------------------------------------------
Xxxxx Xxxxx 18,000 2000 None
--------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx 18,000 2000 None
--------------------------------------------------------------------------------
Xxxxx Xxxxxxx 24,000 1997 None
--------------------------------------------------------------------------------
53
EXHIBIT "I"
OFFICER'S CERTIFICATE
OF
DATADESK TECHNOLOGIES, INC.
This Certificate is being furnished pursuant to the Agreement and Plan of
Merger, dated as of June ____, 2002 (the "Agreement"), by and among Datadesk
Technologies, Inc. (the "Company"), Security Biometrics, Inc., SBTI Acquisition
Corporation, and Edinburgh Investments LLC. Capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement.
The undersigned, Xxxxxx Xxxxxxx, the President of the Company, hereby
certifies that:
1. The representations and warranties of the Company set forth in the
Agreement are true and correct in all material respects at and as of the date
hereof as though made on the date hereof.
2. The Company has, in all material respects, performed and complied with
all covenants, agreements, and conditions required by the Agreement to be
performed or complied with by it on or before the Closing.
The undersigned has made and executed this Officer's Certificate as of the
___th day of June 2002.
DATADESK TECHNOLOGIES, INC.
By: _____________________________________
Xxxxxx Xxxxxxx, President
54
EXHIBIT "J"
SELLER INCUMBENCY CERTIFICATE
This Certificate is being furnished pursuant to the Agreement and Plan of
Merger, dated as of June __, 2002 (the "Agreement"), by and among Datadesk
Technologies, Inc. (the "Company"), Security Biometrics, Inc., SBTI Acquisition
Corporation and Edinburgh Investments LLC. Capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement. By signing below, I,
Xxxxxx Xxxxxxx, President and Secretary of Datadesk Technologies, Inc., hereby
certify that:
1. I am the duly elected and acting Secretary of the Company, a corporation
organized and existing in good standing under the laws of the state of
Washington;
2. Attached as Exhibit A is a true and correct copy of resolutions which
were duly adopted by unanimous consent of the Board of Directors of the Company
on June 6, 2002.
3. The attached resolutions have not been amended, rescinded or modified
and are in full force and effect on this date in the form originally adopted,
and conform with the Articles of Incorporation and By-Laws of the Company; and
4. The Articles of Incorporation dated May 20, 1997, as amended June 26,
1997, and corrected October 3, 1997, and the By-Laws dated June 24, 1997, as
amended January 1, 2002, all of which were previously submitted to Purchaser,
have not been amended or modified and are in full force and effect on this date.
No actions have been taken to proceed with any dissolution or liquidation of the
Corporation.
5. The following persons are duly elected, qualified and acting officers of
the Corporation in the capacity indicated, and the signatures set forth after
their names and titles are their true and genuine signatures:
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxxx Xxxxxxx President and Secretary _______________________
Dated as of this _____ day of June, 2002.
______________________________________________________
Xxxxxx Xxxxxxx, President and Secretary of the Company
55
EXHIBIT "K"
OFFICER'S CERTIFICATE
OF
SECURITY BIOMETRICS, INC.
This Certificate is being furnished pursuant to the Agreement and Plan of
Merger, dated as of June __, 2002 (the "Agreement"), by and among Datadesk
Technologies, Inc., Security Biometrics, Inc. ("SBTI"), SBTI Acquisition
Corporation and Edinburgh Investments LLC. Capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement.
The undersigned, Xxx Xxxx, the President of SBTI, hereby certifies that:
1. The representations and warranties of SBTI set forth in the Agreement are
true and correct in all material respects at and as of the date hereof as though
made on the date hereof.
2. SBTI has, in all material respects, performed and complied with all
covenants, agreements, and conditions required by the Agreement to be performed
or complied with by it on or before the Closing.
The undersigned has made and executed this Officer's Certificate as of the
__th day of June, 2002.
SECURITY BIOMETRICS, INC.
By: ________________________________
Xxx Xxxx, President
56
EXHIBIT "L"
PURCHASER INCUMBENCY CERTIFICATE
This Certificate is being furnished pursuant to the Agreement and Plan of
Merger, dated as of June __, 2002 (the "Agreement"), by and among Datadesk
Technologies, Inc., Security Biometrics, Inc. ("SBTI"), SBTI Acquisition
Corporation, and Edinburgh Investments LLC. Capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement. By signing below, I,
Xxx Xxxx, President of SBTI, hereby certify that:
1. I am the duly elected and acting President of SBTI, a corporation
organized and existing in good standing under the laws of the state of Nevada;
2. Attached as Exhibit A is a true and correct copy of resolutions which
were duly adopted:
___ by unanimous consent of the Board of Directors of SBTI on ____________,
2002.
___ by resolution of the Board of Directors of SBTI at a meeting held on
_______________, 2002.
3. The attached resolutions have not been amended, rescinded or modified
and are in full force and effect on this date in the form originally adopted,
and conform with the Articles of Incorporation and By-Laws of SBTI; and
4. The Articles of Incorporation dated __________ [as amended __________],
and the By-Laws dated ______________ [as amended _______________], all of which
were previously submitted to Seller, have not been amended or modified and are
in full force and effect on this date. No actions have been taken to proceed
with any dissolution or liquidation of SBTI.
5. The following persons are duly elected, qualified and acting officers or
authorized agents of SBTI in the capacity indicated, and the signatures set
forth after their names and titles are their true and genuine signatures:
NAME OFFICE SIGNATURE
---- ------ ---------
Xxx Xxxx President ____________________
Dated as of this _____ day of June, 2002.
_______________________________________________
Xxx Xxxx, President of Security Biometrics, Inc.
57
EXHIBIT "M"
MANAGER'S CERTIFICATE
OF
EDINBURGH INVESTMENTS LLC
This Certificate is being furnished pursuant to the Agreement and Plan of
Merger, dated as of June __, 2002 (the "Agreement"), by and among Datadesk
Technologies, Inc., Security Biometrics, Inc., SBTI Acquisition Corporation and
Edinburgh Investments LLC ("Edinburgh"). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement.
The undersigned, Xxxxx Xxxxxxx, the sole manager of Edinburgh, hereby
certifies that:
1. The representations and warranties of Edinburgh set forth in the Agreement
are true and correct in all material respects at and as of the date hereof as
though made on the date hereof.
2. Edinburgh has, in all material respects, performed and complied with all
covenants, agreements, and conditions required by the Agreement to be performed
or complied with by it on or before the Closing.
The undersigned has made and executed this Manager's Certificate as of the
__th day of June, 2002.
EDINBURGH INVESTMENTS LLC
By: ________________________________________
Xxxxx Xxxxxxx, Manager
58
EXHIBIT "N"
LENDER INCUMBENCY CERTIFICATE
This Certificate is being furnished pursuant to the Agreement and Plan of
Merger, dated as of June __, 2002 (the "Agreement"), by and among Datadesk
Technologies, Inc., Security Biometrics, Inc., SBTI Acquisition Corporation, and
Edinburgh Investments LLC ("Edinburgh"). Capitalized terms not defined herein
shall have the meaning ascribed to them in the Agreement. By signing below, I,
Xxxxx Xxxxxxx, Manager of Edinburgh, hereby certify that:
1. I am the duly elected and acting Manager of Edinburgh, a limited
liability company organized and existing in good standing under the laws of the
state of Washington;
2. Attached as Exhibit A is a true and correct copy of resolutions which
were duly adopted by unanimous consent of the Manager on June 25, 2002.
3. The attached resolutions have not been amended, rescinded or modified
and are in full force and effect on this date in the form originally adopted,
and conform with the charter documents for Edinburgh; and
4. The Limited Liability Operating Agreement dated May 15, 2002 has not
been amended or modified and is in full force and effect on this date. No
actions have been taken to proceed with any dissolution or liquidation of
Edinburgh.
5. The following persons is the duly elected, qualified and acting manager
of Edinburgh, and the signatures set forth after their names and titles are
their true and genuine signatures:
NAME OFFICE SIGNATURE
---- ------ ---------
Xxxxx Xxxxxxx Manager ____________________
Dated as of this _____ day of June, 2002.
_________________________________________
Xxxxx Xxxxxxx, Manager of Edinburgh
59
EXHIBIT "O"
SBTI OPTIONS
Name of Option Number of SBTI Exercise Vesting Schedule
Holder Shares Subject to Price
Option Agreement
--------------------------------------------------------------------------------
Xxxx Xxxxx 200,000 $0.11 Immediately 50% vested,
with the remaining 50% to
vest as provided in the
stock option agreement.
--------------------------------------------------------------------------------
Xxxxx Xxxx 100,000 $0.11 Immediately 50% vested,
with the remaining 50% to
vest as provided in the
stock option agreement.
--------------------------------------------------------------------------------
Xxxxx Xxxxx 50,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Xxxxxxxx Xxxxxx 45,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Xxxx Xxxxxx 25,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Add2Ventures 20,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Hans Van Haute 20,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Xxx Xxxx 20,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Xxxxx Xxxx 10,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Xxxxxxx Xxxxx 10,000 $0.11 Immediately 100% vested
--------------------------------------------------------------------------------
Total 500,000
--------------------------------------------------------------------------------
60
EXHIBIT "P"
ALLOCATION SCHEDULE
Conversion ratio: 1:1.3125
1 share of Seller Common Stock = 1.3125 shares of Purchaser Common Stock
-------------------------------------------------------------------------------------------------
NAME OF SELLER SHAREHOLDER SELLER COMMON STOCK HELD PURCHASER COMMON STOCK
BY SHAREHOLDER TO BE ISSUED TO
SHAREHOLDER
-------------------------------------------------------------------------------------------------
Add2Ventures, LLC 17,364 22,791
-------------------------------------------------------------------------------------------------
Xxxxxxxx, N. Xxxx 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx 25,000 32,813
-------------------------------------------------------------------------------------------------
Barrat, Xxxxxx X. and Xxxx X., JTWROS 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxx X. 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx 50,000 65,625
[issued to: B'Nai B'rith Foundation of U.S.]
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx X. 85,000 111,563
-------------------------------------------------------------------------------------------------
Xxxx, Xxxxxxx 40,000 52,500
-------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxx X. 200,000 262,500
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx X. and Xxxx X., JTWROS 54,000 70,875
-------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx 940 1,234
-------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxx 20,000 26,250
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxxx 25,000 32,813
[issued to: XxXxxxxx, West & Chodorow, Inc.]
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxx 15,000 19,688
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 70,000 91,875
[issued to: Xxxxxx Xxxxxxx DDS, PS Profit
Sharing Plan & Trust]
-------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxxxx 130,000 170,625
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx X. 45,000 59,063
-------------------------------------------------------------------------------------------------
Xxxxxxxxxxx 20,000 26,250
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 156,250 205,079
-------------------------------------------------------------------------------------------------
Xxxx, Xxxxx 100,000 131,250
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx X. 868 1,140
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx and Xxxxxxx, JTWROS 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxx, Xxxx 25,000 32,813
-------------------------------------------------------------------------------------------------
61
-------------------------------------------------------------------------------------------------
NAME OF SELLER SHAREHOLDER SELLER COMMON STOCK HELD PURCHASER COMMON STOCK
BY SHAREHOLDER TO BE ISSUED TO
SHAREHOLDER
-------------------------------------------------------------------------------------------------
Xxx, Xxxx 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx and Xxxxx Xxxxxxxxx 550,000 721,875
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxx Drew 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X. and Xxxx Xxxx X. Xxxxxx, 630,000 826,875
JTWROS
-------------------------------------------------------------------------------------------------
XxXxxxxxx, Xxxxxx 97,500 127,969
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx X. 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx X. and Xxxxxxx X. 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx and Xxxxxx, JTWROS 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X. 828 1,087
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxx X. and Xxxxx J., Joint Tenants 30,000 39,375
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx 20,000 26,250
[issued to: Xxxxxx Xxxxxx XXX, National
Securities C/F]
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxxx 20,000 26,250
[issued to: Xxxxxxxx Xxxxxx XXX, National
Securities C/F]
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx X. 15,000 19,688
[issued to: Xxxxxxx X. Xxxxxxx, Xx. Revocable
Trust]
-------------------------------------------------------------------------------------------------
Pivot 29,126 38,228
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxx, as his separate estate 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxx-Xxxxx 12,000 15,750
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx 15,000 19,688
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx 1,007,500 1,322,344
-------------------------------------------------------------------------------------------------
Xxxxxxxxxxx, Xxxxxx X. 160,000 210,000
[- 125,000 shares issued to: Xxxxxx X.
Xxxxxxxxxxx
- 35,000 shares issued to: Ringgenberg
Investments, LP]
-------------------------------------------------------------------------------------------------
Rips, Xxxxx Xxxxxx 12,500 16,407
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxxxx 35,000 45,938
-------------------------------------------------------------------------------------------------
Xxxxxxxxxxx, Xxxxx X. 465,938
[- 330,000 shares issued to: Xxxxx X.
Xxxxxxxxxxx
- 25,000 shares issued to: Xxxxx Xxxxxxxxxxx
XXX, National Securities Corporation,
Custodian] 355,000
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxxx 25,000 32,813
-------------------------------------------------------------------------------------------------
62
-------------------------------------------------------------------------------------------------
NAME OF SELLER SHAREHOLDER SELLER COMMON STOCK HELD PURCHASER COMMON STOCK
BY SHAREHOLDER TO BE ISSUED TO
SHAREHOLDER
-------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx X. 50,000 65,625
[issued to: National Securities Cp. C/F
Xxxxxxx X. Xxxxxxxx XXX]
-------------------------------------------------------------------------------------------------
Xxxxxxxxx, Xxxxxx 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxxxx 200,000 262,500
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxx 5,000 6,563
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 20,000 26,250
-------------------------------------------------------------------------------------------------
Xxxxx Xxxxx & Co. 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxxx 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx X. 2,474,250 3,247,454
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxx X. 210,000 275,625
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx X. 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxxx Family Foundation 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxxxx 435,000 570,938
-------------------------------------------------------------------------------------------------
Xxxxxx, Xxxxxx X. 12,500 16,407
-------------------------------------------------------------------------------------------------
Xxxxxxxx, Xxxxx X. 135,000 177,188
[- 100,00 shares issued to: National
Securities c/f Xxxxx Xxxxxxxx SEP XXX
- 35,000 shares issued to: Xxxxx X. Xxxxxxxx]
-------------------------------------------------------------------------------------------------
Xxxx, Xxxx 20,000 26,250
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxxx (Trust U/W) 50,000 65,625
-------------------------------------------------------------------------------------------------
Xxxxx, Xxxxx 25,000 32,813
-------------------------------------------------------------------------------------------------
Xxxxxxx, Xxxxxx 25,000 32,813
-------------------------------------------------------------------------------------------------
TOTAL 8,380,626 10,999,590
-------------------------------------------------------------------------------------------------
63
EXHBIT "Q"
AGED RECEIVABLES SUMMARY
-------------------------------------------------------------------------------------------------
Name Total Due 0-30 31-60 61-90 90+
-------------------------------------------------------------------------------------------------
America Online, Inc. $(6,944.00) $0.00 $0.00 $0.00 $(6,944.00)
-------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxxx $8.00 $8.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Xxxxxx Xxxxxxxx $210.40 $0.00 $0.00 $0.00 $210.40
-------------------------------------------------------------------------------------------------
Challenger Center $3,670.00 $0.00 $0.00 $0.00 $3,670.00
-------------------------------------------------------------------------------------------------
Challenger Learning Center $149.90 $149.90 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Cinnaminson TWP Board of Ed. $1,180.00 $1,180.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
City of Haverhill $54.95 $0.00 $54.95 $0.00 $0.00
-------------------------------------------------------------------------------------------------
D&H Distributing $21,672.00 $5,850.00 $5,471.00 $6,509.50 $3,841.50
-------------------------------------------------------------------------------------------------
Digital Kitchen, Inc. $508.00 $500.00 $0.00 $8.00 $0.00
-------------------------------------------------------------------------------------------------
Xxxx Xxxxxxxx $(69.95) $0.00 $0.00 $0.00 $(69.95)
-------------------------------------------------------------------------------------------------
Educational Resources $(208.00) $0.00 $0.00 $0.00 $(208.00)
-------------------------------------------------------------------------------------------------
Ergo Works Inc. $374.00 $314.00 $60.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
XxxxXxxxxx.xxx $1,000.00 $0.00 $1,000.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Ergonomic Products $(52.00) $0.00 $0.00 $0.00 $(52.00)
-------------------------------------------------------------------------------------------------
Ergonomic Resources Inc. $86.00 $0.00 $0.00 $0.00 $86.00
-------------------------------------------------------------------------------------------------
Glens Falls High School $57.95 $0.00 $57.95 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Granada Learning Ltd. / SEMERC $20.00 $0.00 $20.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Xxxxxxx Elementary $77.95 $0.00 $0.00 $0.00 $77.95
-------------------------------------------------------------------------------------------------
Harrisburg School District $77.95 $0.00 $0.00 $0.00 $77.95
-------------------------------------------------------------------------------------------------
Infogrip, Inc. $794.00 $794.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Xxxxxx Micro - 10 $9,494.88 $0.00 $0.00 $0.00 $9,494.88
-------------------------------------------------------------------------------------------------
Xxxxxx Micro Inc. $83.84 $0.00 $0.00 $0.00 $83.84
-------------------------------------------------------------------------------------------------
xxxxxx.xxx $1,388.00 $0.00 $568.00 $337.00 $483.00
-------------------------------------------------------------------------------------------------
Kids' Stuff $(87.95) $0.00 $0.00 $0.00 $(87.95)
-------------------------------------------------------------------------------------------------
Kidstation Net Effect $3,199.00 $3,199.00 $0.00 $0.00 $0.00
Technologies
-------------------------------------------------------------------------------------------------
Xxxxxx High $77.95 $0.00 $0.00 $0.00 $77.95
-------------------------------------------------------------------------------------------------
Learning Services, Inc. $1,015.00 $0.00 $0.00 $0.00 $1,015.00
-------------------------------------------------------------------------------------------------
Macon State College $1,307.20 $0.00 $0.00 $0.00 $1,307.20
-------------------------------------------------------------------------------------------------
Magneti Marelli Mexico $25.00 $25.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Mr. David McCaughham $(461.70) $0.00 $0.00 $0.00 $(461.70)
-------------------------------------------------------------------------------------------------
Micro Center $(45.00) $0.00 $0.00 $(45.00) $0.00
-------------------------------------------------------------------------------------------------
64
-------------------------------------------------------------------------------------------------
Name Total Due 0-30 31-60 61-90 90+
-------------------------------------------------------------------------------------------------
MicroAge Computer Ctr $82.47 $0.00 $0.00 $0.00 $82.47
-------------------------------------------------------------------------------------------------
Microwarehouse, Inc. $2,088.00 $2,128.00 $0.00 $0.00 $(40.00)
-------------------------------------------------------------------------------------------------
Xxx-xxxxxxx.xxx, Inc. $775.00 $0.00 $0.00 $0.00 $775.00
-------------------------------------------------------------------------------------------------
Northstar Systems Inc. $7,300.00 $0.00 $0.00 $0.00 $7,300.00
-------------------------------------------------------------------------------------------------
Ossining Union Free School Dist $524.65 $0.00 $0.00 $524.65 $0.00
-------------------------------------------------------------------------------------------------
Palm Inc. $48,300.00 $24,000.00 $24,300.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
PC Connection $7,132.03 $0.00 $0.00 $0.00 $7,132.03
-------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxxxx $83.96 $0.00 $0.00 $0.00 $83.96
-------------------------------------------------------------------------------------------------
Poulsbo Junior High School $57.95 $0.00 $0.00 $0.00 $57.95
-------------------------------------------------------------------------------------------------
PS 13 $77.95 $0.00 $0.00 $0.00 $77.95
-------------------------------------------------------------------------------------------------
San Antonio Academy $1,075.00 $1,075.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Xxxxxx Saudi $(69.95) $0.00 $0.00 $0.00 $(69.95)
-------------------------------------------------------------------------------------------------
Scientific Sealing Technology $149.90 $149.90 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Small Dog Electronics $(70.00) $0.00 $0.00 $0.00 $(70.00)
-------------------------------------------------------------------------------------------------
St. Jeans School $42.95 $0.00 $0.00 $0.00 $42.95
-------------------------------------------------------------------------------------------------
Target Range Elementary $77.95 $0.00 $0.00 $0.00 $77.95
-------------------------------------------------------------------------------------------------
Tejas Office Products $555.00 $555.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
Xxxxxxx Xxxxx Middle School $87.95 $0.00 $0.00 $0.00 $87.95
-------------------------------------------------------------------------------------------------
University of California, $77.95 $0.00 $0.00 $0.00 $77.95
Berkeley
-------------------------------------------------------------------------------------------------
University of Maryland $(139.90) $0.00 $0.00 $0.00 $(139.90)
-------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxxxx $(69.95) $0.00 $0.00 $0.00 $(69.95)
-------------------------------------------------------------------------------------------------
Zones Inc. $57.00 $57.00 $0.00 $0.00 $0.00
-------------------------------------------------------------------------------------------------
TOTAL: $106,859.28 $39,984.80 $31,531.90 $7,334.15 $28,008.43
-------------------------------------------------------------------------------------------------
AGING PERCENT: 37.40% 29.50% 6.90% 26.20%
-------------------------------------------------------------------------------------------------
65
