EXHIBIT 10.1
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is executed this 3rd day of February, 1998 (the
"Effective Date"), by and between nSTOR CORPORATION, INC., a
Delaware corporation (the "Buyer") and XXXXX XXXXXXX, XXXXX X.
XXXX, XXXXXX XXXXXXXXXX (collectively, the "Shareholders").
RECITALS:
A. The Shareholders and Ambex Venture Group, LLC ("AVG") own
all of the outstanding shares of BORG ADAPTIVE TECHNOLOGIES,
INC., a Colorado corporation (the "Company"). The number and
kind of shares are set forth on Exhibit 1 attached hereto and
incorporated herein (hereinafter, such shares are referred to
collectively as the "Shares").
B. The Buyer and Shareholders mutually desire to purchase and
sell the Shares upon the terms and conditions hereinafter set
forth.
NOW THEREFORE, for and in consideration of the mutual promises
herein made, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, IT IS
HEREBY AGREED AS FOLLOWS:
ARTICLE I -- PURCHASE AND SALE OF SHARES
1.1 Purchase and Sale. At Closing, the Shareholders and AVG
shall sell and deliver to the Buyer, and the Buyer shall purchase
and accept from the Shareholders and AVG, the Shares.
1.2 Closing. The Closing (the "Closing") of the purchase of
Shares shall take place at 2:00 p.m., local time, on February 27,
1998, at the offices of Xxxxxxx & Xxxxxxx, P.C., 0000 Xxxxxxxx,
Xxxxx 000, Xxxxxxx, XX 00000, or at such other time and place as
may be mutually agreed to by the Buyer and the Shareholders (the
"Closing Date").
1.3 Exclusions from Sale. The Shareholders and AVG represent,
and the Buyer acknowledges, that the following items shall not be
transferred to the Buyer at Closing, but shall be distributed or
otherwise transferred by the Company to the Shareholders and AVG
prior to Closing: (i) all liabilities not specifically provided
for in this Agreement; (ii) the Company's deferred compensation,
pension, profit sharing and similar retirement plans, if any; and
(iii) any liabilities of Ambex Technologies, Inc., Borg
Technologies, Inc., or Borg Development Partners, LLC, with the
sole exception of the License and Development Agreement between
Borg Technologies, Inc., and Borg Development Partners, LLC, and
Seek Systems, Inc., dated May 16, 1995, as amended by Letter
Agreement dated May 16, 1995, and as further amended by
the agreement signed by Seek Systems, Inc. dated October 23,
1996, which agreement is being assumed by Buyer pursuant to the
terms of this Agreement.
ARTICLE II -- CONSIDERATION FOR TRANSFER
2.1 Purchase Price of Shares. The total consideration to
be paid by the Buyer to the Shareholders and AVG for the Shares
shall be approximately $325,000.00 (which amount may vary based
on the actual payoff of the promissory note described in Section
2.2(a) below) plus the warrants listed in Section 2.3 and the
royalty payments due per Section 2.4 below.
2.2 Payment of the Purchase Price. The Purchase Price
shall be paid as follows:
(a) At Closing, the Buyer shall pay to Ambex Technologies,
Inc., an amount equal to $300,000.00 plus accrued interest at the
rate of 6.5% per annum to satisfy that certain Promissory Note
from the Company dated October 7, 1997 (the "Note").
(b) The balance of the Purchase Price
($25,000.00) shall be paid to the Shareholders and AVG in
proportion to their ownership of the shares as set forth on
Exhibit 1.
2.3 Warrants. Buyer shall deliver the warrants in the form
attached as Exhibits 2.3(a)-(d).
2.4 Royalty Payments on Sale of NT Product. Buyer will pay
to Shareholders and AVG a royalty payment of five percent of the
gross sales (defined as sales minus returns) of the NT software
product ( defined as: the company's existing RAID disk array
device driver operating under the NT operating system, and only
the NT operating system) for as long as the product is sold. The
royalty payment will be paid quarterly or as otherwise agreed by
the parties in writing and will be divided among the Shareholders
and AVG as follows:
(a) 20% to Ambex Venture Group, LLC;
(b) 32% to Xxxxx Xxxxxxx;
(c) 24% to Xxxxx X. Xxxx; and
(d) 24% to Xxxxxx Xxxxxxxxxx.
Notwithstanding the foregoing, Buyer shall have no obligation to
continue development or sale of the NT product if sales of the
product are not sufficiently profitable, as determined by Buyer
in its sole discretion. The parties agree to enter into a
separate royalty agreement at closing containing the terms set
forth above and such additional terms as may be mutually
agreeable to the parties.
ARTICLE III -- LIABILITIES
3.1 Non-Assumption of Liabilities. Except for the
contracts and other current liabilities, if any, specifically
described in Exhibit 3.1, and the expenses described in Section
12.4 of this Agreement, the Buyer shall not assume, pay, perform,
discharge, or accept any other liabilities, debts or obligations
of the Company of any kind whatsoever, whether actual,
contingent, accrued, known or unknown, including, without
limitation, any liabilities relating to taxes, employee
compensation, loans to shareholders, pension, profit-sharing,
health insurance, disability insurance or other employee benefit
programs, worker's compensation, breach or negligent performance
of any contract, or breach of warranty relating thereto,
liabilities resulting from breach of contract, torts, illegal
activity, unlawful employment or business practice or any other
liability or obligation whatsoever. All such non-assumed
liabilities, debts and obligations shall remain the
responsibility of the Shareholders which shall pay and discharge
the same when and as due.
ARTICLE IV -- OWNERSHIP AND AUTHORITY
In order to induce the Buyer to enter into this Agreement,
the Shareholders make the following representations and
warranties regarding ownership of Shares and authority to
consummate this transaction to the Buyer, each of which shall be
deemed to be independently material and relied upon by the Buyer,
regardless of any investigation made by, or information known to,
the Buyer:
4.1 Ownership of Shares. The Shareholders and AVG are the
sole record and beneficial owners of the kind and number of
Shares as set forth on Exhibit 1. The Shareholders and AVG own
such Shares free and clear of all liens, encumbrances, pledges,
claims and other security interests and all such shares are
validly issued, fully paid and nonassessable. With the sole
exception of the restrictions contained in Sections 4 and 5 of
the Common Stock Purchase Agreement between the parties dated
October 7, 1997, none of the Shares owned by the Shareholders and
AVG are subject to any agreement, judgment, order, voting trust
or proxy or other agreement that either limits or restricts the
Shareholders' and AVG's absolute authority to transfer their
Shares as herein provided or requires the holder thereof to vote
such Shares in any particular manner. By paying the Purchase
Price, the Buyer will acquire title to the Shares, free and clear
of all liens, encumbrances, restrictions, pledges, claims, other
security interests, voting trusts, proxies or such other
agreements.
4.2 Enforceability; Conflicting Obligations. The
Shareholders and AVG have all necessary power and authority to
enter into and consummate the transactions contemplated by this
Agreement in accordance with its terms and to sell to the Buyer
the kind and number of Shares as set forth on Exhibit 1. This
Agreement is the Shareholders' and AVG's valid and binding
obligation, enforceable against such parties in accordance with
its terms. The execution and delivery of this Agreement do not,
and the consummation of the sale of Shares contemplated hereby
will not, conflict with or violate the provisions of any order,
writ, decree, agreement, contract, restriction (or, in the case
of any shareholder that is a partnership or corporation,
organizational documents) to which the Shareholders and AVG are a
party, or to which the Shareholders and AVG are bound.
ARTICLE V --
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
In order to induce the Buyer to enter into this Agreement,
the Shareholders make the following representations and
warranties, each of which shall be deemed to be independently
material and relied upon by the Buyer, regardless of any
investigation made by, or information known to, the Buyer.
5.1 Subsidiaries. The Company owns no stock or other
securities, nor has any investment in any corporation, joint
venture, partnership or other business enterprise (collectively,
the "Subsidiaries"; individually, a "Subsidiary").
5.2 Organization and Qualification. The Company is a
corporation duly organized, validly existing, and in good
standing under the laws of the State of Colorado. The Company
has filed with the Colorado Secretary of State the most recent
annual report required to be filed by it, has not filed Articles
of Dissolution and has a perpetual period of existence. The
Company is not required to be qualified to transact business in
any other jurisdiction.
5.3 Conflicting Obligations; Consents and Approvals. The
execution and delivery of this Agreement does not, and the
consummation of the sale of the Shares contemplated hereby will
not: (a) conflict with or violate any provisions of the Articles
or Certificates of Incorporation or Bylaws of the Company; (b)
conflict with or violate any provisions of, or result in the
maturation or acceleration of, any obligations under any
contract, agreement, instrument, document, lease, license,
permit, indenture, or obligation, or any law, statute,
ordinance, rule, regulation, code, guideline, order, arbitration
award, judgment or decree, to which the Company is a party; or
(c) violate any restriction or limitation, or result in the
termination or loss of any right (or give any third party
the right to cause such termination or loss), of any kind to
which the Company is bound. Excluding only the approval of Seek
Systems, Inc., to the assignment of its contract to Buyer, no
third-party consents, approvals or authorizations are
necessary for the execution and consummation of the transactions
contemplated hereby, nor are any such consents, approvals or
authorizations required in order to enable the Buyer to continue
to enjoy the benefits of any contracts, agreements, instruments,
documents, leases, licenses, permits, indentures or rights of the
Company in accordance with their existing terms.
5.4 Capitalization. The entire authorized capital stock of
the Company consists of 5,000,000 shares of Common Stock, no par
value, of which 1,000,000 shares are issued and outstanding.
There are no outstanding subscriptions, options, warrants,
convertible securities or other rights to subscribe for or
acquire any capital stock or securities convertible into capital
stock of the Company.
5.5 Organizational Documents. True, correct and complete
copies of the Articles or Certificates of Incorporation, Bylaws
and other organizational documents of the Company are attached
hereto as Exhibit 5.5.
5.6 Financial Statements. Attached hereto as Exhibit 5.6
are complete copies of the financial statements (including
balance sheets and statements of earnings, stockholders' equity
and cash flow) of the Company for its most recent fiscal year
(collectively, the "Financial Statements") and updated through
December 31, 1997. The balance sheets of the Companies for the
most recent fiscal period hereinafter are referred to as the
"Latest Balance Sheets." The Company's books and records of
accounts accurately reflect all of the assets, liabilities,
transactions and results of operations of the Company, and the
Financial Statements have been prepared based upon and in
conformity therewith. The Financial Statements accurately
present the financial condition and results of operation of the
Company on a cash basis at the dates and for the relevant periods
indicated.
5.7 Real Property; Leases. The Company does not own, lease
or otherwise have any interest in any real estate.
5.8 Personal Property; Good Title; Condition. Except for
such personal property as has been disposed of in the ordinary
course of the Company's business since the date of the Latest
Balance Sheets, the Company owns good and marketable title to all
property which they purport to own (including but not limited to
that reflected on the Latest Balance Sheets), as well as all
property acquired by the Company since the date of the Latest
Balance Sheets. All tangible personal property of the Company is
located at 00 Xxxxxx Xxx, Xxxxxxx, XX 00000. All of such
personal property reflected on the Latest Balance Sheets is
actually on hand, increased and decreased, respectively, by
acquisitions and dispositions of such property in the ordinary
course of business since the date of the Latest Balance Sheets.
All such property is in reasonably good condition and repair
(normal wear and tear excepted), and is owned by the
Company free and clear of all security interests, including any
conditional sale or other title retention agreements, liens,
claims, charges, pledges, exceptions, and defects of title and
other encumbrances of any kind. Exhibit 5.8 delineates
all equipment and other personal property referred to in this
Section 5.8.
5.9 Inventory. The Company has no inventory.
5.10 Intellectual Property. Exhibit 5.10 lists (or, in the
case of trade secrets and secret processes, generally describes)
all of the (a) patents and patent applications, (b) trademarks,
trade names and applications therefor and service marks, (c)
copyrights and copyright registrations, and (d) trade secrets and
secret processes used, employed or intended to be used or
employed by the Company (hereinafter referred to as the
"Intellectual Property"). The Company owns (or has valid and
enforceable rights to use) all of the Intellectual Property
listed in Exhibit 5.10, and such listed Intellectual Property is
all that which is necessary to conduct the Company's business as
presently conducted. Exhibit 5.10 lists for each item of
Intellectual Property owned by the Company and which is
registered with any foreign, federal or state agency or office,
the registration number thereof, the date of registration and the
agency or office where so registered. The Company is the sole
owner of all right, title and interest in Intellectual
Property which they purport to own and, with respect to
Intellectual Property licensed by the Company, the Company has
valid, binding and enforceable rights to use such Intellectual
Property. There are no interference, opposition or
cancellation proceedings pending or, to the knowledge of the
Shareholders, threatened against the Company or the Intellectual
Property. The use of the Intellectual Property does not infringe
upon the rights of any third party. No claim, suit or action is
pending or, to the Shareholder's knowledge, threatened
alleging that the Company is infringing upon the intellectual
property rights of others. No employee, former employee,
officer, director or shareholder of the Company holds any right,
title or interest in the Intellectual Property and each
Shareholder, by executing this Agreement, waives any right or
interest it may have in and to the Intellectual Property.
5.11 Insurance. The Company is not required by law to have
any insurance and it does not have any insurance covering its
business or its property or equipment. The Company has never
been refused any insurance with respect to any material assets or
operations, nor has coverage been limited in any respect
material to its operations, by any insurance carrier to which the
Company has applied.
5.12 Governmental Authorizations. The Company possesses all
governmental, regulatory and administrative licenses, permits,
approvals and other authorizations (including, without
limitation, occupancy permits for real estate) as are necessary
for the consummation of the transactions contemplated herein or
the conduct of the Company's business or operations in any state
or jurisdiction. Exhibit 5.12 sets forth a list of all such
licenses, permits, approvals and authorizations and true and
complete copies of each written document evidencing or affecting
such licenses, permits, approvals and authorizations have
been previously delivered to Buyer. The Company is in compliance
with the terms and conditions of all such licenses, permits,
approvals and authorizations. Neither the execution of this
Agreement nor the consummation of the transactions
contemplated herein will result in the revocation, or an adverse
change in the terms or conditions, of any such license, permit,
approval or authorization, and, to the knowledge of the
Shareholders, the same shall continue in full force and
effect in accordance with their present terms unaffected by the
consummation of the transactions contemplated herein.
5.13 Material Contracts and Other Descriptions and Lists.
(a) Leases. There are no leases of real or personal
property to which the Company is a party.
(b) Employment Contracts; Benefits. There are no written
or oral employment, bonus, or incentive compensation arrangements
in effect, or under which any amounts remain unpaid, on the date
of this Agreement or to become payable or effective after the
date of this Agreement.
(c) Terminated Employees. There are no employees earning
base salary at an annual rate of Ten Thousand Dollars ($10,000)
or more who have terminated employment with the Company or who
have announced their intention to terminate employment.
(d) Loans and Borrowing Agreements. With the sole
exception of the Note which will be satisfied at closing, there
are no written or oral (i) loan, credit or borrowing arrangements
or agreements; or (ii) agreements by which the Company has
guaranteed or otherwise became liable or contingently liable for
the debt of another.
(e) Bank Accounts. Exhibit 5.13(e) lists the name of each
bank or savings and loan association, or commodities or
securities firm, in which the Company has an account or safe
deposit box, the numbers of each such account or box, and the
names of all persons having power to borrow, discount debt
obligations, cash or draw checks, enter boxes, sell or buy
securities, or otherwise act on behalf of the Company in any
dealing with such banks or savings and loan associations,
commodities or securities firms.
(f) Capital Expenditures. There are no outstanding
written or oral commitments by the Company to make a capital
expenditure, capital addition or capital improvement.
(g) Non-Compete Covenants. There are no written or oral
covenants not to compete, nonsolicitation covenants and
nondisclosure covenants in favor of the Company, or binding upon
or against the Company or the Shareholders, except for the terms
of the Release and Covenants Not to Xxx executed by the
individual Shareholders and Ambex Technologies, Inc., dated
October 7, 1997, and the terms of Section 5.1 of the Asset
Purchase Agreement between Ambex Technologies, Inc., the Company
and the individual Shareholders, dated October 1, 1997 (the
"Asset Purchase Agreement"). The transactions contemplated by
this Agreement will not violate any of the terms and provisions
of said Releases or the Asset Purchase Agreement.
(h) Powers of Attorney. There is/are no person(s)
holding powers of attorney from the Company.
(i) Discounts. There are no agreements, arrangements or
programs pursuant to which the Company has offered, promised or
made available to its customers any volume discount, rebate,
credit or allowance.
(j) Non-Ordinary Course Agreements. There are no
contracts, agreements or arrangements binding upon the Company
made or entered into other than in the ordinary course of the
Company's business with the exception of the Asset Purchase
Agreement.
Accurate and complete copies of each agreement or document
described in this Section heretofore have been furnished to the
Buyer.
5.14 Litigation. There is no litigation, claim, proceeding
or investigation pending, or, to the Shareholders' knowledge,
threatened against or relating to (i) the Company, its properties
or business, (ii) the transactions contemplated herein or (iii)
the employees, Shareholders, officers, directors or
independent contractors of the Company. Additionally, the
Shareholders know of no state of facts or circumstances that
reasonably could be expected to ripen into litigation, proceeding
or investigation or adversely affect the properties,
business or prospects of the Company. Furthermore, there are no
outstanding orders, decrees or stipulations issued by any
federal, state or local authority to w hich the Company is a
party or subject and which adversely affects or may
adversely affect its properties, business or prospects.
5.15 Compliance with Law.
(a) No Violations. To the Shareholders'
knowledge, the conduct of the business of the Company, including
the conduct or actions of employees, Shareholders, officers,
directors or independent contractors, while in the employ
of the Company does not violate, nor is the Company in default
under, any law, statute, ordinance, rule, regulation, code,
license, permit, guideline, order, arbitration award, judgment or
decree, including, without limitation, civil rights
legislation, equal employment opportunity legislation,
occupational safety and health legislation, and Buyer will not
after the Closing incur any liability or obligation as a result
of any such violation or default existing at the Closing or
arising or accruing thereafter but based upon conditions extant
at the Closing. Additionally, no expenditures are anticipated
which are necessary or appropriate for the continuation of the
Company's business in compliance with any such law,
statute, rule, regulation, code, license, permit, guidelines,
order, arbitration award, judgment or decree.
(b) Stock Sale. All legal action necessary for the
Shareholders' execution and performance of this Agreement and
consummation of the transactions contemplated hereby have been
duly and validly taken.
5.16 Environmental Concerns.
(a) Definition. The term "Environmental Laws" shall
mean all federal, state, and local laws including statutes,
regulations, ordinances, codes, rules, orders, directives and
other governmental restrictions and requirements
(including, but not limited to, those contained in or evidenced
by permits, temporary permits or exemption letters) relating to
the discharge of air pollutants, water pollutants, solid wastes
or process waste water or otherwise relating to the
environment, hazardous wastes, materials or substances, toxic
substances, asbestos or any process of the Company that have an
impact on the environment, including, but not limited to, the
Federal Solid Waste Disposal Act, the Federal Clean Air Act, the
Federal Clean Water Act, the Federal Resource Conservation
and Recovery Act of 1976, the Federal Comprehensive Environmental
Response, Compensation and Liability Act of 1980, the Toxic
Substances Control Act, the Federal Water Pollution Control Act,
the National Environmental Policy Act, the Federal Occupational
Safety and Health Act, regulations of the Environmental
Protection Agency, regulations of the Nuclear Regulatory Agency,
or any applicable federal or state regulatory or administrative
agency with authority over natural resources or environmental
protection now in effect or presently scheduled to come into
effect, all as presently amended.
(b) Pending Litigation. The Company is not a party
to or the subject of any litigation or administrative proceeding
nor, to the knowledge of the Shareholders, is any litigation or
administrative proceeding threatened against the Company, which in
either case asserts or alleges that the Company: (i) has violated or
is violating any Environmental Laws, (ii) is required to clean up, remove,
or take remedial or other response action due to the disposal,
depositing, discharge, leaking, leaching or other release or
migration of any pollutants, contaminants, hazardous wastes,
materials or substances or other materials (collectively,
"Hazardous Substances"), (iii) is required to pay all or a
portion of the cost of any past, present or future cleanup,
removal or remedial or other response action which arises out of
or is related to the disposal, depositing, discharge, leaking,
leaching or other release of any Hazardous Substances.
(c) Storage, Deposit or Treatment of Hazardous
Substances. The Company has not, nor has any other person or
entity, caused or permitted Hazardous Substances to be stored,
discharged or released, deposited, treated, recycled, leaked,
spilled or disposed of on, under or at any real estate occupied
by the Company, which storage, discharge or release, deposit,
treatment, recycling, leakage, spillage or disposition violates
any Environmental Laws.
(d) No Violation. The real estate occupied by the
Company has been and is currently being operated in a manner that
does not violate Environmental Laws. Furthermore, the real
estate used in the operation of the Company's business and
manufacturing facilities, operations and practices, and
its disposal practices are in material compliance with all terms
and conditions of all required permits and further are in
material compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in all applicable
Environmental Laws. Neither the Company nor the Shareholders
have received notice of any past, present or future event,
condition, circumstance, activity, practice, incident,
action or plan which may interfere with or prevent continued
compliance with all applicable Environmental Laws, or which may
give rise to any common law or legal liability, or otherwise form
the basis of any claim, action, suit, proceeding, hearing or
investigation under any applicable Environmental Law, based on or
related to the real estate used in the operation of the Company's
business, operations or practices, or any of the Company's
disposal practices. The Company and the Shareholders have not
received any notice of any investigation, and, to the knowledge
of any of them, none are under investigation, by any federal,
state or local authority for the failure to comply with
Environmental Laws. Neither the Company nor the Shareholders
have made any statements, warranties or representations in any
documents submitted to any federal, state or local regulatory
authority or other governmental body containing untrue
statements of material fact or omitting statements of material
fact rendering the statements made misleading in connection with
any Environmental Law.
(e) Disposal Practices. Neither the Company nor the
Shareholders have any notice or knowledge that any hazardous
waste transporter or disposal facility that has transported,
hauled or otherwise removed or disposed of Hazardous Substances
from the real estate used in the operation of the Company's
business or operations was not properly licensed pursuant to all
applicable Environmental Laws or that such Hazardous Substances
were not property transported or disposed of at a facility
authorized to receive such Hazardous Substances pursuant to all
applicable Environmental Laws.
(f) Tanks and Vessels. There are no process,
petroleum or Hazardous Substance storage tanks, or vessels or
other facilities on, under or at any real estate occupied by the
Company which contain or previously contained materials which, if
known to be present in soils or ground water, would require
cleanup, removal or other remedial action under Environmental
Law.
(g) Asbestos. To the Shareholders' knowledge the
real estate occupied by the Companies contains no
urea-formaldehyde, asbestos or asbestos by-products.
5.17 Contingent and Undisclosed Liabilities. The Company
has no debts, obligations or liabilities, nor is it subject to
the imposition of any valid governmental or third-party claim
arising from the conduct of the Company's business or the
ownership or use of its properties on or prior to the date
hereof, whether such obligation, liabilities or claims are now
known or unknown, fixed or contingent, of any nature whatsoever,
except: (i) those fully reflected or reserved against on the
Latest Balance Sheet or otherwise specifically described
in this Agreement; or (ii) those contractual and tax liabilities
which have arisen in the ordinary course of the Company's
business and consistent with past practice from the date of the
Latest Balance Sheets through the date hereof and which are not,
singly or in the aggregate, materially adverse to the Company.
5.18 Taxes.
(a) Returns; Taxes Paid. The Company has filed all
tax returns and reports required to be filed by it, including
without limitation returns for all applicable federal, state, and
local income, franchise, sales, use, property, employment excise
and other taxes, and such returns are accurate, complete and
correct. Additionally, the Company has paid all taxes, interest
and penalties required to be paid pursuant to said returns or
otherwise required to be paid by it, and there are no other
taxes, interest or penalties payable on account of its
operations except: (i) as are reflected or reserved against on
the Latest Balance Sheets; or (ii) for taxes arising from the
conduct of the Company's business and ownership of its properties
for and during periods subsequent to the date of the Latest
Balance Sheets and which are not yet due. There are no tax audits
or examinations now pending or, to the Shareholders' knowledge,
threatened with respect to the Company. No correspondence has
been received by the Company from any state taxing authority
requesting information concerning the extent of the Company's
nexus with such state or asserting that the Company has such
nexus so as to impose such state's taxing jurisdiction upon it.
All taxes and assessments which the Company was or is required by
law to withhold or collect has been and are being withheld or
collected by it and have been and are being paid over to the
proper governmental authorities or are being held by the
Company for such payment. The Company has not waived or extended
any applicable statute of limitations relating to the assessment
of any tax.
(b) Other. The Company: (i) has not filed any
consent or agreement under section 341(f) of the Internal Revenue Code
of 1986, as amended (the "Code"); (ii) has not applied for a tax
ruling; (iii) has not entered into a closing agreement with any
taxing authority; (iv) has not made any payments, is not
obligated to make any payments, or is not a party to any
agreement that under certain circumstances could obligate it to
make any payments that will not be deductible under Code section 280G;
(vi) is not a party to any tax allocation or sharing agreement;
or (vii) has not been (or have any liability for unpaid taxes
because it once was) a member of an affiliated group during any
part of any consolidated return year within any part of which
consolidated return year any corporation was also a member of
such group.
5.19 Labor Contracts. The Company is not a party to any
collective bargaining agreement or bound to any other agreement
with a labor union and no proceedings are pending to establish
such an agreement. There are no investigations pending, nor are
there any uncorrected or unresolved citations, complaints or
charges issued by any agency responsible for administering or
enforcing laws relating to labor relations, employee safety or
health, fair labor standards and equal employment opportunity
nor, to the best knowledge of the Shareholders' are any such
investigations, citations, complaints or charges threatened.
5.20 Performance of Contracts, Etc. The Company is not in
default under, nor have they breached any provision of, any
contract, agreement, document, lease, license, permit,
instrument, indenture, insurance policy, or other obligation of
the Company, and there are no oral modifications or past
practices inconsistent with the written terms of any of the
foregoing. All of such contracts, agreements, instruments,
documents, leases, licenses, permits, indentures,
policies and other obligations are currently in full force and
effect. The other parties to such contracts, agreements,
instruments, documents, leases, licenses, permits, indentures,
policies and other obligations have complied with their
obligations thereunder and are not in breach thereof. The
Company has fully performed each such term, condition and
covenant of each such contract, agreement, instrument, document,
lease, license, permit, indenture, policy or other obligation
required to be performed on or prior to the date hereof. The
Shareholders know of no state of facts which, with the giving of
notice or the passing of time, or both, would give rise to any
default.
5.21 Changes in Financial Position. Since the date of the
Latest Balance Sheets, the business of the Company has been
conducted in the ordinary course thereof and consistent with past
practice, there have not been:
(a) Financial Conditions. Any material and adverse
change in the business, assets, condition (financial or
otherwise) or prospects of the Company;
(b) Business or Property Damages. Any material
damage, destruction or loss (whether or not covered by insurance)
adversely affecting the business, properties or prospects of the
Company; or
(c) Extraordinary Events. Any transaction outside
the ordinary course of business of the Company.
5.22 Employee Benefit Plans.
(a) General. The Company is not a party to any
"employee pension benefit plan" (as defined in Section 3(2) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")), "employee welfare benefit plan" (as defined in
Section 3(1) of ERISA) or other employee benefit plans
(including without limitation, those providing any stock option,
stock purchase, stock appreciation right, bonus, deferred
compensation, excess benefits, profit sharing, pension, thrift,
savings, stock bonus, employee stock ownership, salary
continuation, severance, retirement, supplemental retirement,
short- or long-term disability, dental, vision care,
hospitalization, major medical, life insurance, accident
insurance, vacation, holiday and/or sick leave pay, tuition
reimbursement, executive perquisite or other employee benefit(s)
maintained, or contributed to, or required to be contributed to,
by the Company for the benefit of any officers or employees,
current or former, active or inactive, of the Company, whether on
an active or frozen basis (all of the foregoing being herein
called "Benefit Plans"). The Company does not have any formal
plan or commitment, whether legally binding or not, to create any
such plan.
(b) Foreign Employees. There are no officers or
employees, current or former, active or inactive, of the
Companies working outside the United States.
(c) COBRA. Each "group health plan" (within the
meaning of section 162(i)(2) of the Code), if any, maintained by the
Company as of the first day of each group health plan's first
plan year beginning on or after July 1, 1986, has been
administered in compliance with the continuation coverage
requirements contained in the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA") and as provided under
section 162(k) and section 4980B(f) of the Code and any regulations
promulgated or proposed thereunder.
5.23 Events Subsequent to Latest Balance Sheets. The
Company has not since the date of the Latest Balance Sheets:
(a) Incurred Liabilities. Incurred any obligation or
liability (absolute, contingent, accrued or otherwise), or
guaranteed or become a surety of any debt, except in connection
with the performance of this Agreement or in the ordinary course
of business;
(b) Discharged Debt. Discharged or satisfied any
lien or encumbrance, or paid or satisfied any obligation or
liability (absolute, contingent, accrued or otherwise) other than
(i) liabilities shown or reflected on the Latest Balance Sheets
or (ii) liabilities incurred since the date thereof in the
ordinary course of business;
(c) Encumbrances. Mortgaged, pledged or subjected to
any lien, charge, security interest or other encumbrance any of
the Company's assets, tangible or intangible;
(d) Disposition of Assets. Sold or transferred any
of its assets, or canceled any debts or claims or waived any
rights;
(e) Dividends. Made any declaration, setting aside
or payment to the Shareholders of any dividend or redemption or
other distribution with respect to the Company's capital stock,
or agreed to take any such action;
(f) Stock Issuance. Issued any stock, bonds,
debentures, options, warrants or other corporate securities;
(g) Sale of Business. Entered into any negotiations
or contracts for the sale of the Company's business, or any part
thereof or for the purchase of another business, whether by
merger, consolidation, exchange of capital stock or otherwise
(other than negotiations with respect to this Agreement);
(h) Increase Compensation. Increased or promised to
increase the compensation or fringe benefits of any Shareholder,
officer or director, or instituted any general wage increase
applicable to employees, or any specified subgroup of employees;
(i) Accounting Procedure. Changed or modified its
accounting methods or practices;
(j) Capital Expenditure. Purchased or made a
commitment for the purchase of capital assets without the written
consent of the Buyer; or
(k) Settle Litigation. Settled, or agreed to settle,
any litigation, arbitration or other proceeding, pending or
threatened.
5.24 Brokerage. Neither the Shareholders nor the Company
have incurred, or made commitments for, any brokerage, finders'
or similar fee in connection with the transaction contemplated by
this Agreement.
5.25 Books and Records. The Books of Account of the Company
are complete and correct in all material respects and reflect, in
accordance with a cash basis method of accounting, all of the
transactions entered into by the Company.
5.26 Related Party Transactions. With the sole exception of
the Asset Purchase Agreement, the Company: (a) has not had any
financial transactions or arrangements (other than payment of
regular salary to Related Parties who are employees) with any
Related Party, and (b) does not have and will not have any
present or future obligation to enter into any transaction or
arrangement with any Related Party. For purposes hereof, the
term "Related Party" shall mean: (i) any Shareholder or any
partner, shareholder, officer, director or affiliate of such
Shareholder, (ii) any officer or director of the Company, (iii)
any spouse, in-law or lineal descendant of any Related Party, and
(iv) any person who, directly or indirectly, controls or is
controlled by or is under common control with the Company. For
purposes of this definition, "person" shall mean an individual,
partnership, corporation, trust, unincorporated organization or
other entity; and "control," as used with respect to any person,
shall mean the possession, directly or indirectly, of the power
to direct or cause the direction of the management and
policies of such person, whether through the ownership of voting
securities, by contract or otherwise. To the knowledge of the
Shareholders, no Related Party owns, directly or indirectly, or
is a director, member, officer or employee of, or consultant to,
any business organization which is a competitor, supplier, or
customer having business dealings with the Company, nor does any
Related Party own any assets or properties which are used in the
Company's business.
5.27 Representations and Warranties True and Correct. The
representations and warranties contained herein, and all other
documents, certifications, materials and written statements or
written information given to the Buyer by or on behalf of the
Company or Shareholders or disclosed in this agreement, do not
include any untrue statement of a material fact or omit to state
a material fact required to be stated herein or therein in order
to make the statements herein or therein, in light of the
circumstances under which they are made, not misleading.
ARTICLE VI
REPRESENTATIONS OF THE BUYER
In order to induce the Shareholders to enter into this
Agreement, the Buyer makes the following representations and
warranties, each of which shall be deemed to be independently
material and relied upon by the Shareholders, regardless of any
investigation made by, or information known to, the Shareholders:
6.1 Organization. The Buyer is a corporation duly
organized and validly existing and in good standing under the
laws of the State of Delaware, has filed with the Delaware
Secretary of State the most recent annual report required
to be filed by it, has not filed Articles of Dissolution and has
a perpetual period of existence.
6.2 Authorization. The Buyer has full corporate power and
authority to enter into this Agreement and to perform its
obligations hereunder. Subject only to the approval by the
Buyer's Board of Directors, the Buyer's officers have taken all
action required by law, the Buyer's articles of incorporation,
by-laws or otherwise to authorize the execution and performance
of this Agreement and the consummation of the transactions
contemplated hereby.
6.3 Enforceability; Conflicting Obligations. This
Agreement is the Buyer's valid and binding obligation,
enforceable against it in accordance with its terms. The
execution and delivery of this Agreement do not, and the
consummation of the purchase of the Shares will not, conflict
with or violate any provision of the articles of incorporation or
by-laws of the Buyer, nor any provisions of, or result in the
acceleration of, any obligation of it.
6.4 Brokerage. The Buyer has not incurred, nor made
commitment for, any brokerage, finders' or similar fee in
connection with the transaction contemplated by this Agreement.
6.5 Litigation. There is no litigation, proceeding or
governmental investigation pending, or to the best of the Buyer's
knowledge and belief, threatened against or relating to the
transactions contemplated herein.
ARTICLE VII -- SHAREHOLDERS' COVENANTS
7.1 Access. From the date hereof until the Closing
Date, the Shareholders shall provide the Buyer and its authorized
officers, agents and representatives access to all properties,
books, records, contracts, tax returns and documents of the
Company and the transactions contemplated hereby. The
Shareholders shall respond promptly to, and cause the Company's
officers and employees promptly to respond to, all questions
posed by the Buyer concerning the Company, its business,
properties, condition (financial or otherwise) or prospects. If
the transactions provided for in this Agreement are not
consummated, the Buyer and its respective officers,
agents and representatives will hold in confidence all
information obtained from the Company, any of its officers,
agents or representatives, or the Shareholders, excepting
however, any such information which (i) was or is in the public
domain, (ii) was in fact known to the Buyer prior to disclosure
to the Buyer by the Company or the Shareholders, or (iii) is
disclosed to the Buyer by a third party other than any employee
or former employee of the Company subsequent to disclosure by the
Company or Shareholders.
7.2 Operation of Business. From the date hereof and until
the Closing Date, without the express prior written consent of
the Buyer, the Shareholders shall not cause the Company to:
(a) Increase Compensation. Grant or promise any
increase in compensation to any Shareholder, officer or director,
or any general increase in the rate of compensation of its
non-Shareholder employees, or any subgroup of employees, nor, by
means of any bonus, profit-sharing, incentive compensation
payment, pension, retirement, medical hospitalization, life
insurance or other insurance plan or plans, or otherwise,
increase in any amount the benefits or compensation of any such
employees, directors or officers;
(b) Employment and Labor Contracts. Enter into,
amend, renew or extend any employment contract or collective
bargaining agreement;
(c) Disposition of Assets. Sell or dispose of any
asset, or encumber, mortgage or pledge any of its assets
whatsoever;
(d) Capital Expenditures. Make any capital
expenditures, or enter into any lease of capital equipment or
real estate without the written consent of the Buyer;
(e) Contracts. Enter into any contract with any
other person which is not incurred in the ordinary course of
business;
(f) Create or Incur Indebtedness. Enter into any
transaction, or create, assume, incur or guarantee any
indebtedness;
(g) Issue Stock; Distributions on Stock. Authorize
or issue any shares or capital stock or other securities
convertible into capital stock, or declare or pay any dividend or
make any sale of, or distribution with respect to, capital
stock or directly or indirectly redeem, purchase or otherwise
acquire any capital stock;
(h) Accounting Procedures. Change any accounting
procedures or practices or its financial structure;
(i) Charter Amendments. Make any amendments to or
changes in its Articles or Certificate of Incorporation or
Bylaws;
(j) Breach of Contract. Perform any act, or
attempt to do any act, or permit any act or omission to act,
which will cause a breach of any contract, agreement, instrument,
document, lease, license, permit, indenture or other obligation
to which the Company is a party or to which it is bound; or
(k) Related Party Transaction. Engage in any
transaction of the types described in Section 5.26 with a Related
Party.
7.3 Preservation of Business. From the date hereof and
until the Closing Date, the Shareholders shall cause the Company
to carry on its business only in the ordinary course consistent
with past practice and shall use their best efforts to keep the
Company business organization intact, including its present
relationships with employees, customers and others having
business relations with them. The Company at all times shall
maintain in inventory quantities of merchandise and other
supplies and materials sufficient to allow it to continue to
operate it business, after the Closing Date, free from any
shortage of items.
7.4 Maintenance of Property. From the date hereof and
until the Closing Date, the Company shall operate, maintain and
repair all of its property in a manner consistent with past
practice.
7.5 Compliance with Laws. From the date hereof and until
the Closing Date, the Company shall comply with all applicable
laws, statutes, ordinances, rules, regulations, guidelines,
orders, arbitration awards, judgments and decrees
applicable to, or binding upon, the Company or its business or
properties.
7.6 Update Exhibits. On the Closing Date, the Shareholders
shall deliver to the Buyer updated exhibits setting forth all
information, events or actions which, if this Agreement were
signed on the Closing Date, would be required to be disclosed in
order to make the Shareholders' representations and warranties
contained herein true and not misleading. The Shareholders'
delivery of such updated disclosures shall not absolve the
Shareholders from liability for breach of any representation or
warranty which was untrue or false when made.
7.7 Necessary Amendments. Prior to the Closing, the
Shareholders shall cause the Company's Board of Directors to
adopt such amendments to the Articles of Incorporation of the
Company, in form and substance as may be reasonably required by
the Buyer to effectuate the transactions herein contemplated.
7.8 Other Deliveries. On the Closing Date, the
Shareholders shall duly execute and deliver to the Buyer the
following:
(a) The stock certificates for the Shares, or, if
there are no certificates representing the Shares, such other
documents as may be necessary to transfer the Shares to the
Buyer;
(b) The original, complete pertinent files and other
related documents pertaining to the Intellectual Property
described in Exhibit 5.10; and (c) All other documents
reasonably requested by counsel for the Buyer to consummate the
transactions herein contemplated.
7.9 Fulfill Conditions. The Company and the Shareholders
shall use their best efforts to cause to be fulfilled on or prior
to the Closing each of the conditions set forth in Article IX
hereof.
7.10 Employment Agreements. On the Closing Date, Xxxxx
Xxxxxxx, Xxxxx X. Xxxx and Xxxxxx Xxxxxxxxxx shall execute and
deliver to the Buyer employment agreements in form and substance
satisfactory to the Buyer in its sole discretion (the "Employment
Agreements").
7.11 Tax Returns. Shareholders will assist Buyer in
filing federal and state tax returns for the year ended December
31, 1997 and be responsible for all tax liabilities, including
both income tax and payroll taxes.
ARTICLE VIII -- BUYER'S COVENANTS
8.1 Deliveries. On the Closing Date, the Buyer shall duly
execute and deliver the following:
(a) A check payable to Ambex Technologies, Inc. in an
amount sufficient to satisfy the Note pursuant to the terms of
Section 2.2(a) above;
(b) Four checks, each payable to each of the
Shareholders and AVG, in the total amount of $25,000.00;
(c) the Stock Option Agreements;
(d) the royalty agreement described in Section 2.4
above; and
(e) all other documents reasonably requested by
counsel for the Company to consummate the transactions herein
contemplated.
8.2 Employment Agreements. On the Closing Date, Buyer will
execute and deliver the Employment Agreements.
8.3 Fulfill Conditions. The Buyer shall use its best
efforts to cause to be fulfilled on or prior to the Closing each
of the conditions set forth in Article X hereof.
ARTICLE IX --
CONDITIONS OF BUYER'S OBLIGATION TO CLOSE
The obligation of the Buyer to consummate the transactions
contemplated by this Agreement shall, unless the same are waived
in writing by the Buyer, be subject to the satisfaction and
fulfillment, prior to and on the Closing Date, of the
following express conditions precedent:
9.1 Representation and Warranties. The representations and
warranties made by the Shareholders shall be true and correct in
all respects as of and at the Closing Date with the same force
and effect as though said representations and warranties had been
again made on the Closing Date.
9.2 Performance of Covenants and Obligations. The
Shareholders shall have performed and complied with all of their
covenants and obligations under this Agreement which are to be
performed or complied with by them prior to or on the Closing
Date.
9.3 Proceedings and Instruments Satisfactory. All
proceedings, corporate or otherwise, to be taken by the
Shareholders in connection with the transactions contemplated by
this Agreement, and all documents incident thereto, shall be
satisfactory in form and substance to the Buyer.
9.4 Adverse Change. From and after the date of this
Agreement and until the Closing Date, there shall have been no
material adverse change in the Company's business, properties,
condition (financial or otherwise) or prospects, other than
changes in the ordinary course of its business and
consistent with past practice, nor shall there have been any
casualty to the Company's property, as a result of any loss,
taking, destruction or physical damage.
9.5 No Litigation. No investigation, suit, action or other
proceeding shall be threatened or pending before any court or
governmental agency in which it is sought to restrain, prohibit
or obtain damages or other relief in connection with this
Agreement or the consummation of the transactions contemplated
thereby.
9.6 Consents, Approvals Certifications, Licenses and
Permits. All necessary consents, approvals, certifications,
licenses and permits with respect to the transactions
contemplated hereby, the absence of which would have an
adverse effect on the Buyer's rights under this Agreement, or
which would constitute a breach pursuant to any provision of, or
which would result in the termination or loss of any right under,
any contract, agreement, instrument, document, lease, license,
certification, permit, indenture or other obligation, or
without which the Buyer is precluded or impeded from conducting
the Company's business after the Closing, shall have been
received by the Buyer on or before the Closing Date.
9.7 Stock Certificates. The Shareholders shall have
delivered to the Buyer stock certificate(s) representing the
Shares, duly endorsed for transfer to the Buyer or in blank or
accompanied by assignments separate from such certificates.
9.8 Due Diligence. The Buyer shall have conducted a due
diligence investigation and review of the Company, its business
and all matters pertaining thereto that the Buyer deems relevant,
and the results of such investigation and review shall be
satisfactory to the Buyer in its sole discretion.
9.9 Employment Agreements. Xxxxx Xxxxxxx, Xxxxx X. Xxxx,
Xxxxxx Xxxxxxxxxx shall have entered into the Employment
Agreements.
9.10 Seek Systems, Inc. Approval. Seek Systems, Inc., shall
have approved the assignment of its agreement with the Company to
Buyer upon such terms and conditions as are acceptable to Buyer
in its sole discretion.
9.11 Further Assurances. The Shareholders shall have
delivered to the Buyer such other written documents, instruments,
releases or otherwise, as the Buyer reasonably may require to
effectuate the provisions of this Agreement.
9.12 Termination of License Agreement. The License
Agreement between the Company and Ambex Technologies, Inc., dated
October 7, 1997, shall have been terminated by the parties.
9.13 Satisfaction of Note. Ambex Technologies, Inc. shall
have marked the Note "Paid in Full" and delivered the original of
same to Buyer together with a release of all rights it may have
in any assets of the Company by virtue of that certain Security
Agreement dated October 7, 1997.
9.14 Waiver of Rights. Ambex Technologies, Inc., shall have
waived all rights it may have to demand financial information of
the Company pursuant to Section 9.3 of the Asset Purchase
Agreement.
9.15 Resignation of Board of Directors. At Closing, Xxxxx
Xxxxxxx, Xxxxx X. Xxxx, Xxxxxx Xxxxxxxxxx, constituting all of
the Directors of the Company, shall tender their resignations as
members of the Board of Directors.
9.16 Opinion Letter. Shareholder's counsel shall have
delivered to Buyer's counsel an opinion letter in form and
substance reasonably satisfactory to Buyer's counsel.
9.17 NT Royalty Agreement. The parties shall have entered
into the royalty agreement described in Section 2.4 above.
9.18 Intellectual Property. All of the Intellectual
Property described in Section 5.10 above shall be properly
assigned and transferred to the Company and
the validity and enforceability of the Intellectual Property
shall be established to the reasonable satisfaction of Buyer.
9.19 Authority of Ambex. Ambex Venture Group LLC shall
deliver such resolutions and other proof of its authority to
execute this Agreement and consummate the transactions
contemplated hereby all in form and substance as may be
reasonably required by counsel for Buyer.
ARTICLE X --
CONDITIONS TO SHAREHOLDERS' OBLIGATION TO CLOSE
The obligation of the Shareholders to consummate the
transactions contemplated by this Agreement shall, unless the
same are waived in writing by the Shareholders, be subject to the
satisfaction and fulfillment, prior to and on the Closing Date,
of the following express conditions precedent:
10.1 Representations and Warranties. The representations
and warranties in this Agreement made by the Buyer shall be true
and correct in all respects as of and at the Closing Date with
the same force and effect as though said representations and
warranties had been again made on the Closing Date.
10.2 Performance of Covenants and Obligations. The Buyer
shall have performed and complied with all of its material
covenants and obligations under this Agreement which are to be
performed or complied with by it prior to or on the Closing Date.
ARTICLE XI -- INDEMNIFICATION
11.1 Indemnification. Notwithstanding the Closing, and
regardless of any investigation made by, or on behalf of, the
Buyer or any information known to the Buyer, the Shareholders
(the "Indemnitors"), jointly and severally, shall indemnify and
save the Buyer, its shareholders, officers, directors or
employees (collectively, the "Buyer" as used in this Article XI)
harmless from and against any and all losses, claims, damages,
liabilities, costs, expenses or deficiencies including, but not
limited to, reasonable attorneys' fees and other costs and
expenses incident to proceedings or investigations or the defense
or settlement of any claim or claims, incurred by or asserted
against the Buyer or the Company due to or resulting from any of
the following:
(a) Representations or Warranties. The inaccuracy or
breach of any representation or warranty of the Shareholders
given in or pursuant to this Agreement;
(b) Covenants. Any breach or default in the
performance by the Shareholders of any of their covenants,
obligations or agreements in or pursuant to this Agreement;
(c) Other Obligations. Any liability or obligation
of the Company not expressly assumed by the Buyer pursuant to
this Agreement;
(d) Pre-Closing Operations. The ownership, conduct
or operation of the Business of the Company at any time prior to
the Closing, or any incident, occurrence, condition or claim
existing, arising or accruing prior to the Closing
and relating to the operation or conduct of the Company or
ownership or use of its assets; and
(e) Tax Liability. Tax liabilities pertaining to
operations prior to closing.
11.2 Limitations on Indemnifiable Damages.
(a) Minimum Amount. The Buyer shall not be entitled
to recover Indemnifiable Damages for any matter described in
Section 11.1 hereof unless and until the aggregate of all claims
listed in Sections 11.1(a) through (d) above exceeds $50,000.00.
Notwithstanding the foregoing, the Shareholders shall be
responsible for all tax claims described in Section 11.1(e)
above, regardless of amount.
11.3 Procedures for Making Claims. If and when the Buyer
desires to assert a claim for Indemnifiable Damages against the
Indemnitors pursuant to the provisions of this Article XI, the
Buyer shall simultaneously deliver to the Indemnitors, reasonably
promptly after the Buyer's receipt of a claim or specific
and affirmative awareness of a potential claim, a certificate
signed by its president (the "Notice of Claim"): (i) stating
that the Buyer or the Company has paid or accrued (or intends to
pay or accrue) Indemnifiable Damages to which it is entitled to
indemnification pursuant to this Article XI and the amount
thereof (to the extent then known); and, (ii) specifying to the
extent possible (A) the individual items of loss, damage,
liability, cost, expense or deficiency included in the amount so
stated, (B) the date each such item was or will be paid or
accrued and (C) the basis upon which Indemnifiable Damages are
claimed. If the Indemnitors shall object to such Notice of
Claim, the Indemnitors shall simultaneously deliver written
notice of objection (the "Notice of Objection") to Buyer within
15 days after the Buyer's delivery of the Notice of Claim. The
Notice of Objection shall set forth the grounds upon which the
objection is based and state whether the Indemnitors object to
all or only a portion of the matter described in the Notice of
Claim. The Notice of Objection shall set forth the grounds upon
which the objection is based and state whether the Indemnitors
object to all or only a portion of the matter described in the
Notice of Claim. If the Notice of Objection shall not have been
so delivered within such 15-day period, the Indemnitors shall be
conclusively deemed to have acknowledged the correctness of the
claim or claims specified in the Notice of Claim for the full
amount thereof, and the Indemnifiable Damages set forth in the
Notice of Claim shall be promptly paid to Buyer, without the
necessity of further action.
11.4 Participation in Defense of Third Party Claims. If any
third party shall assert any claim against the Buyer or Company
which, if successful, might result in an obligation of the
Indemnitors to pay Indemnifiable Damages and which can be
remedied to the sole satisfaction of the Buyer by the payment of
money damages without further adverse consequence to the Buyer or
the Companies, the Indemnitors, at the sole expense of the
Indemnitors, may assume the primary defense thereof with counsel
reasonably acceptable to the Buyer, but only if and so long as:
(i) the Indemnitors diligently pursue the defense of such
claim; and (ii) the Indemnitors acknowledge to the Buyer in
writing that the claim, if resolved or settled adversely to the
Buyer or the Company, is one for which the Indemnitors are
obligated to indemnify the Buyer hereunder; and (iii)
the Indemnitors provide the Buyer with such access as is
reasonably necessary to monitor all proceedings related to such
claim. If the Indemnitors fail or are unable to so elect to
assume the primary defense of any such claim, the Buyer
may (but need not) do so; in which event the Buyer may defend,
settle or compromise the claim, at the expense and cost of the
Indemnitors, in any such manner as the Buyer reasonably deems
appropriate.
11.5 Survival of Representations and Indemnification. The
Indemnitors', obligation to pay Indemnifiable Damages arising out
of claims described in Section 11.1 shall survive the Closing of
this transaction indefinitely.
11.6 Specific Performance. Notwithstanding the
foregoing, nothing herein shall preclude either party from
pursuing the remedy of specific performance, if available under
the law.
ARTICLE XII -- MISCELLANEOUS
12.1 Further Assurances. Each party hereto from time to
time hereafter, and upon request, shall execute, acknowledge and
deliver such other instruments as reasonably may be required to
more effectively transfer and vest in the Buyer the Shares or to
otherwise carry out the terms and conditions of this Agreement.
12.2 Benefit and Assignment. This Agreement shall be
binding upon and inure to the benefit of the parties hereto,
their heirs, successors, assignees, and beneficiaries in
interest; provided, however, that this Agreement may not be
assigned by the Shareholders.
12.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Florida
(regardless of such State's conflict of laws principles), and
without reference to any rules of construction regarding the
party responsible for the drafting hereof. The exclusive
jurisdiction and venue for any action brought to enforce this
Agreement shall lie in the state and federal courts sitting in
Seminole County, Florida.
12.4 Expenses. Except for Ambex's attorneys' fees and costs
and as otherwise herein provided, all expenses incurred in
connection with this Agreement or the transactions herein
provided shall be paid by the Buyer.
12.5 Notices. All notices, demands, and communications
provided for herein or made hereunder shall be delivered by
telecopier or mailed first class with postage prepaid, or by
overnight delivery addressed in each case as follows,
until some other address shall have been designated in a written
notice given in like manner, and shall be deemed to have been
given or made when so delivered:
If to the Buyer: nStor Corporation, Inc.
000 Xxxxxxxxxx Xxxx Xxxxx
Xxxx Xxxx, Xxxxxxx 00000
Attn: R. Xxxxxx Xxxxx, President and CEO
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxx & Xxxxxxx, P.A.
Post Office Box 2854
Xxxxxxx, Xxxxxxx 00000
If to the Shareholders: Xxxxx Xxxxxxx
00 Xxxxxx Xxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxx X. Xxxx
000 Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Xxxxxx Xxxxxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
With a copy to:
Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxx & Xxxxxxx, P.C.
0000 Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
12.6 Transfer and Income Taxes. Buyer will pay all sales
and other transfer taxes, and income or franchise taxes,
resulting from the transactions contemplated by this Agreement.
12.7 Counterparts. This Agreement may be executed
simultaneously in two or more counterparts, each of which shall
be deemed an original, but all of which together shall constitute
one and the same instrument.
12.8 Publicity. No publicity or other announcements
concerning the transactions contemplated hereby shall be made
without the mutual consent of the Buyer and the Shareholders.
12.9 Headings. All Section headings herein are inserted for
convenience only and shall not modify or affect the construction
or interpretation of any provision of this Agreement.
12.10 Amendment, Modification and Waiver. This
Agreement may not be modified, amended or supplemented except by
mutual written agreement of all the parties hereto. Any
amendment, modification, supplement or waiver shall be
in writing signed by the party or the parties to be charged.
12.11 Entire Agreement. This Agreement and the Exhibits
attached hereto and other documents delivered herewith represent
the entire agreement of the parties with respect to the subject
matter hereof and no provision or document of any kind shall be
included in or form a part of such agreement unless signed
and delivered to the other party by the party to be charged.
12.12 Third Party Beneficiaries. Except as specifically
set forth or referred to herein, nothing herein expressed or
implied is intended or shall be construed to confer upon or give
to any person or corporation, other than the parties hereto and
their successors and assigns, any rights or remedies under or
by reason of this Agreement.
12.13 Severability. The invalidity of any provision, or
portion of a provision, of this Agreement shall not affect the
validity of any other provision of this Agreement or the
remaining portion of the applicable provision.
12.14 Attorneys' Fees. The prevailing party in any
litigation brought to interpret or enforce the terms and
provisions of this Agreement shall be entitled to recovery from
the non-prevailing party its costs of litigation; including
without limitation, reasonable attorneys' fees.
12.15 "Knowledge." As used herein, any reference to the
"knowledge" of the Shareholders, or the like, shall include the
knowledge of the Shareholders after making due inquiry and, if
the Shareholders fail to make such inquiry, shall include
constructive knowledge of such facts as would have been
learned had such due inquiry been made.
ARTICLE XIII -- JOINDER OF AMBEX VENTURE GROUP LLC AND
CONVEYANCE OF ITS SHARES
This agreement and the obligations of the Buyer and the
Shareholders to consummate the transactions contemplated herein,
is expressly made contingent upon AVG signing a Joinder and
Consent to this Agreement containing such terms and conditions as
are acceptable to Buyer in its sole discretion; and receipt
by Buyer of the original certificate(s) evidencing the Shares
owned by AVG, duly endorsed for transfer to Buyer or in blank, or
accompanied by assignments separate from such certificates,free
and clear of all liens, charges, encumbrances, restrictions,
reservations, pledges, proxies, voting trusts, security interests
or other agreements. If Buyer has not received the duly executed
Joinder & Consent and the original endorsed stock certificate(s)
by the Closing Date, this Agreement shall terminate according to
its terms and neither party shall have any further right, duty or
obligation to the other as a result hereof.
(The remainder of this page intentionally left blank)
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of the date and year first above
written.
SELLERS:
Shareholders of
BORG ADAPTIVE TECHNOLOGIES, INC.
/s/ Xxxxx Xxxxxxx
_______________________________
Xxxxx Xxxxxxx
/s/ Xxxxx X. Xxxx
_______________________________
Xxxxx X. Xxxx
/s/ Xxxxxx Xxxxxxxxxx
_______________________________
Xxxxxx Xxxxxxxxxx
BUYER:
nSTOR CORPORATION, INC.
/s/ R. Xxxxxx Xxxxx
By:____________________________
R. Xxxxxx Xxxxx
President & Chief Executive Officer
(CORPORATE SEAL)
Exhibit 1
SHARES
Name Outstanding Shares
Xxxxx Xxxxxxx 320,000
Xxxxx X. Xxxx 240,000
Xxxxxx Xxxxxxxxxx 240,000
Ambex Venture Group, LLC 200,000
EXHIBIT 3.1
ASSUMED LIABILITIES
License and Development Agreement between Borg Technologies,
Inc., and Borg Development Partners, LLC, and Seek Systems, Inc.,
dated May 16, 1995, as amended by Letter Agreement dated May 16,
1995 and as further amended by the agreement signed by Seek
Systems, Inc. dated October 23, 1996.
Exhibit 5.10
INTELLECTUAL PROPERTY
LICENSED PATENT RIGHTS
Method and Apparatus for Improving Performance in a Redundant
Array of Independent Disks with patent application BTI-102 with
application Serial Number 08/516,293 and has been recorded in the
records of the US Patent and Trademark Office on microfilm reel
7659, frame 0533. The recording date is 10/02/95. This patent
has also been filed with the European Patent office (includes
Austria, Belgium, Switzerland, Liechtenstein, Germany, Denmark,
Spain, France, United Kingdom, Greece, Ireland, Italy,
Luxembourg, Monaco, Netherlands, Portugal, Sweden and any other
Sate which is a Contracting State of the European Patent
Convention and of the PCT) as well as the Canadian Patent
Office with the designation BTI-102-PCT on 9/15/96.
Method and Apparatus for Organizing Data in a Redundant Array
of Independent Disks with patent application BTI-101 with
application Serial Number 08/16,232 and has been recorded in the
records of the US Patents and Trademark Office on microfilm reel
7659, frame 0260. The recording date is 10/02/95. This patent
has also been filed with the European Patent office (includes
Austria, Belgium, Switzerland, Liechtenstein, Germany, Denmark,
Spain, France, United Kingdom, Greece, Ireland, Ital, Luxembourg,
Monaco, Netherlands, Portugal, Sweden and any other State which
is a Contracting State of the European Patent Convention and of
the PCT) as well as the Canadian Patent Office with the
designation BTI-101-PCT on 9/15/96.
EXHIBIT 10.2
FOURTH AMENDMENT TO STOCK PURCHASE AGREEMENT
THIS FOURTH AMENDMENT TO STOCK PURCHASE AGREEMENT is
executed this _____ day of April, 1998, by and between nSTOR
CORPORATION, INC., a Delaware corporation ("Buyer"), and XXXXX
XXXXXXX, XXXXX X. XXXX and XXXXXX XXXXXXXXXX (collectively, the
"Shareholders").
W I T N E S S E T H:
WHEREAS, Buyer and the Shareholders entered into that
certain Stock Purchase Agreement dated February 3, 1998, for the
purchase and sale of all of the outstanding shares of Borg
Adaptive Technologies, Inc., a Colorado corporation; and
WHEREAS, the parties have previously amended the Stock
Purchase Agreement on February 27, 1998; on March 19, 1998; and
on April 3, 1998; and
WHEREAS, the parties desire to amend the Stock Purchase
Agreement for the fourth time to extend the closing date set
forth in Section 1.2 of said Agreement through and including
Monday, April 20, 1998.
NOW, THEREFORE, for and in consideration of the sum of
$10.00 and the mutual promises contained herein, and other good
and valuable consideration, the receipt, adequacy and sufficiency
of which is hereby acknowledged, Buyer and Shareholders hereby
agree as follows:
1. The recitals set forth above are incorporated into this Fourth
Amendment as if fully set forth herein.
2. Section 1.2 of the Agreement is hereby amended to provide that
the Closing Date is hereby extended through and including Monday,
April 20, 1998.
3. The remaining terms and provisions of the Stock Purchase
Agreement are hereby ratified and reaffirmed as if the same were
fully set forth herein.
IN WITNESS WHEREOF, the parties hereto have caused this Fourth
Amendment to be executed as of the day and year first
above-written.
Witnesses: nSTOR CORPORATION, INC., a
Delaware corporation
_________________
By: /s/ R. Xxxxxx Xxxxx
_________________ Print Name: R. Xxxxxx Xxxxx,
President
Witnessed on _______________, 1998:
Print Name: Xxxxx Xxxxxxx
Print Name: Xxxxx X. Xxxx
Print Name: Xxxxxx Xxxxxxxxxx
