ASSET PURCHASE AGREEMENT
THIS ASSET PURCHASE AGREEMENT (hereinafter referred to as this
"Agreement") is entered into as of this 11th day of June 2003 by and between
INFORMATION Architects CORPORATION, a North Carolina Corporation (hereinafter
referred to as "ARC ") and PERCEPTRE LLC., a New Mexico Limited Liability
Company (hereinafter referred to as "PERCEPTRE"), the following premises:
Premises
WHEREAS, ARC is a publicly held corporation organized under the laws of
North Carolina.
WHEREAS, PERCEPTRE is a privately held limited liability company
organized under the laws of New Mexico.
WHEREAS, Management of the constituent companies have determined that
it is in the best interest of the parties that ARC acquire 100% of the assets of
PERCEPTRE in exchange for of the issuance of shares of ARC (the "Exchange") on
the terms described herein; and
WHEREAS, ARC and PERCEPTRE desire to set forth the terms of the Asset
Purchase, which is intended to constitute a tax-free reorganization pursuant to
the provisions of Section 368(a)(1)(B) of the Internal Revenue Code of 1986, as
amended.
Agreement
NOW THEREFORE, on the stated premises and for and in consideration of
the mutual covenants and agreements hereinafter set forth and the mutual
benefits to the parties to be derived here from, it is hereby agreed as follows:
ARTICLE I
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF PERCEPTRE
As an inducement to, and to obtain the reliance of ARC, except as set
forth on the PERCEPTRE Schedules (as hereinafter defined), PERCEPTRE represents
and warrants as follows:
Section 1.01 Organization. PERCEPTRE is a limited liability company
duly organized, validly existing, and in good standing under the laws of New
Mexico and has the power and is duly authorized, and licensed under all
applicable laws, regulations, ordinances, and orders of public authorities to
own all of its properties and assets and to carry on its business in all
material respects as it is now being conducted, including qualification to do
business as a foreign company in the states or countries in which the character
and location of the assets owned by it or the nature of the business transacted
by it requires qualification, except where failure to be so qualified would not
have a material adverse effect on its business. Included in the PERCEPTRE
Schedules are complete and correct copies of the articles of organization, and
operating agreement of PERCEPTRE as in effect on the date hereof. The execution
and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, violate any provision of PERCEPTRE'S
articles of organization or operating agreement. PERCEPTRE has taken all actions
required by law, its articles of organization, or otherwise to authorize the
execution and delivery of this Agreement. PERCEPTRE has full power, authority,
and legal right and has taken all action required by law, its articles of
organization, and otherwise to consummate the transactions herein contemplated.
Section 1.02 Capitalization. The authorized capitalization of
PERCEPTRE consists of 289,352 units, at par value $.0001, of which 289,352 units
are currently, issued and outstanding. All issued and outstanding units are
legally issued, fully paid, and non-assessable and not issued in violation of
the preemptive or other rights of any person.
Section 1.03 Subsidiaries. PERCEPTRE has no operating subsidiaries,
nor owns, beneficially or of record, any shares of any other corporation, except
as disclosed in Schedule 1.03. For purposes hereinafter, the term "PERCEPTRE"
also includes those subsidiaries, if any, set forth on Schedule 1.03. none
Section 1.04 Financial Statements.
(a) Included in the PERCEPTRE Schedules are (i)the
unaudited balance sheets of PERCEPTRE as of
December 31, 2001 and 2000, and the related
statements of operations, members equity for the
fiscal year ended December 31, 2001 and 2000 and
(ii) the unaudited balance sheet of PERCEPTRE as of
November 30, 2002, and the related unaudited
statement of operations and cash flows for the nine
months ended November 30, 2002.
(b) All such financial statements have been prepared in
accordance with tax accounting principles. The
PERCEPTRE balance sheets present a true and fair
view as of the dates of such balance sheets of the
financial condition of PERCEPTRE. PERCEPTRE did not
have, as of the dates of such balance sheets,
except as and to the extent reflected or reserved
against therein, any liabilities or obligations
(absolute or contingent) which should be reflected
in the balance sheets or the notes thereto,
prepared in accordance with tax accounting
principles, and all assets reflected therein are
properly reported and present fairly the value of
the assets of PERCEPTRE in accordance with tax
accounting principles.
(c) PERCEPTRE has no liabilities with respect to the
payment of any federal, state, county, local or
other taxes (including any deficiencies, interest
or penalties), except for taxes accrued but not yet
due and payable.
(d) PERCEPTRE has filed all state, federal or local
income and/or franchise tax returns required to be
filed by it from inception to the date hereof.
Each of such income tax returns reflects the taxes
due for the period covered thereby, except for
amounts which, in the aggregate, are immaterial.
(e) The books and records, financial and otherwise, of
PERCEPTRE are in all material respects complete and
correct and have been maintained in accordance with
good business and accounting practices.
(f) All of PERCEPTRE'S assets are reflected on its
financial statements, and, except as set forth in
the PERCEPTRE Schedules or the financial statements
of PERCEPTRE or the notes thereto, PERCEPTRE has no
material liabilities, direct or indirect, matured
or un-matured, contingent or otherwise.
Section 1.05 Information. The information concerning PERCEPTRE set
forth in this Agreement and in the PERCEPTRE Schedules is complete and accurate
in all material respects and does not contain any untrue statement of a material
fact or omit to state a material fact required to make the statements made, in
light of the circumstances under which they were made, not misleading. In
addition, PERCEPTRE has fully disclosed in writing to ARC (through this
Agreement or the PERCEPTRE Schedules) all information relating to matters
involving PERCEPTRE or its assets or its present or past operations or
activities which (i) indicated or may indicate, in the aggregate, the existence
of a greater than $25,000 liability or diminution in value, (ii) have led or may
lead to a competitive disadvantage on the part of PERCEPTRE or (iii) either
alone or in aggregation with other information covered by this Section,
otherwise have led or may lead to a material adverse effect on the transactions
contemplated herein or on PERCEPTRE, its assets, or its operations or activities
as presently conducted or as contemplated to be conducted after the Closing
Date, including, but not limited to, information relating to governmental,
employee, environmental, litigation and securities matters and transactions with
affiliates.
Section 1.06 Options or Warrants. There are no options or warrants, of
any character relating to the authorized and unissued PERCEPTRE units.
Section 1.07 Absence of Certain Changes or Events. Except as set forth
in this Agreement or the PERCEPTRE Schedules, since May 31, 2003.
(a) There has not been (i) any material adverse change
in the business, operations, properties, assets, or
condition of PERCEPTRE or (ii) any damage,
destruction, or loss to PERCEPTRE (whether or not
covered by insurance) materially and adversely
affecting the business, operations, properties,
assets, or condition of PERCEPTRE;
(b) Except as disclosed to ARC, PERCEPTRE has not (i)
amended its articles of organization or operating
agreement; (ii) declared or made, or agreed to
declare or make, any payment of dividends or
distributions of any assets of any kind whatsoever
to members or purchased or redeemed, or agreed to
purchase or redeem, any of its units; (iii) waived
any rights of value which in the aggregate are
outside of the ordinary course of business or
material considering the business of PERCEPTRE;
(iv) made any material change in its method of
management, operation or accounting; (v) entered
into any other material transaction other than
sales in the ordinary course of its business; (vi)
made any accrual or arrangement for payment of
bonuses or special compensation of any kind or any
severance or termination pay to any present or
former officer or employee; (vii) increased the
rate of compensation payable or to become payable
by it to any of its officers or directors or any of
its salaried employees whose monthly compensation
exceeds $1,000; or (viii) made any increase in any
profit sharing, bonus, deferred compensation,
insurance, pension, retirement, or other employee
benefit plan, payment, or arrangement made to, for,
or with its officers, directors, or employees;
(c) PERCEPTRE has not (i) borrowed or agreed to borrow
any funds or incurred, or become subject to, any
material obligation or liability (absolute or
contingent) except as disclosed herein and except
liabilities incurred in the ordinary course of
business; (ii) paid or agreed to pay any material
obligations or liability (absolute or contingent)
other than current liabilities reflected in or
shown on the most recent PERCEPTRE balance sheet,
and current liabilities incurred since that date in
the ordinary course of business and professional
and other fees and expenses in connection with the
preparation of this Agreement and the consummation
of the transactions contemplated hereby; (iii) sold
or transferred, or agreed to sell or transfer, any
of its assets, properties, or rights (except
assets, properties, or rights not used or useful in
its business which, in the aggregate have a value
of less than $10,000), or canceled, or agreed to
cancel, any debts or claims (except debts or claims
which in the aggregate are of a value of less than
$10,000); (iv) made or permitted any amendment or
termination of any contract, agreement, or license
to which it is a party if such amendment or
termination is material, considering the business
of PERCEPTRE; or (v) issued, delivered, or agreed
to issue or deliver any stock, bonds or other
corporate securities including debentures (whether
authorized and unissued or held as treasury stock);
and
(d) to the actual knowledge of PERCEPTRE, PERCEPTRE has
not become subject to any law or regulati which
materially and adversely affects, or in the future
May adversely affect the business, operations,
properties, assets, or Condition of PERCEPTRE.
Section 1.08 Title and Related Matters. PERCEPTRE has good and
marketable title to all of its properties, inventory, interests in properties,
and assets, real and personal, which are reflected in the most recent PERCEPTRE
balance sheet or acquired after that date (except properties, inventory,
interests in properties, and assets sold or otherwise disposed of since such
date in the ordinary course of business) [the "Assets"], all of which are set
forth on Schedule 1.08, free and clear of all liens, pledges, charges, or
encumbrances except (a) statutory liens or claims not yet delinquent; (b) such
imperfections of title and easements as do not and will not materially detract
from or interfere with the present or proposed use of the properties subject
thereto or affected thereby or otherwise materially impair present business
operations on such properties; and (c) as described in the PERCEPTRE Schedules.
Except as set forth in the PERCEPTRE Schedules, PERCEPTRE owns, free and clear
of any liens, claims, encumbrances, royalty interests, or other restrictions or
limitations of any nature whatsoever, any and all products it is currently
manufacturing, including the underlying technology and data, and all procedures,
techniques, marketing plans, business plans, methods of management, or other
information utilized in connection with PERCEPTRE business. Except as set forth
in the PERCEPTRE Schedules, no third party has any right to, and PERCEPTRE has
not received any notice of infringement of or conflict with asserted rights of
others with respect to any product, technology, data, trade secrets, know-how,
propriety techniques, trademarks, service marks, trade names, or copyrights
which, individually or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, would have a materially adverse effect on the
business, operations, financial condition, income, or business prospects of
PERCEPTRE or any material portion of its properties, assets, or rights.
Section 1.09 Litigation and Proceedings. Except as set forth in the
PERCEPTRE Schedules, there are no actions, suits, proceedings, or investigations
pending or, to the actual knowledge of PERCEPTRE , threatened by or against
PERCEPTRE or affecting PERCEPTRE or its properties, at law or in equity, before
any court or other governmental agency or instrumentality, domestic or foreign,
or before any arbitrator of any kind. PERCEPTRE does not have any knowledge of
any material default on its part with respect to any judgment, order,
injunction, decree, award, rule, or regulation of any court, arbitrator, or
governmental agency or instrumentality or of any circumstances which, after
reasonable investigation, would result in the discovery of such a default.
Section 1.10 Contracts.
(a) Except as included or described in the PERCEPTRE
Schedules, there are no "material" contracts,
agreements, franchises, license agreements, debt
instruments or other commitments to which PERCEPTRE
is a party or by which it or any of its assets,
products, technology, or properties are bound other
than those incurred in the ordinary course of
business (as used in this Agreement, a "material"
contract, agreement, franchise, license agreement,
debt instrument or commitment is one which (i) will
remain in effect for more than twelve(12) months
after the date of this Agreement or (ii) involves
aggregate obligations of at least fifty thousand
dollars ($50,000));
(b) All contracts, agreements, franchises, license
agreements, and other commitments to which
PERCEPTRE is a party or by which its properties are
bound and which are material to the operations of
PERCEPTRE taken as a whole are valid and
enforceable by PERCEPTRE in all respects, except as
limited by bankruptcy and insolvency laws and by
other laws affecting the rights of creditors
generally;
(c) PERCEPTRE is not a party to or bound by, and the
properties of PERCEPTRE are not subject to any
contract, agreement, other commitment or
instrument; any charter or other corporate
restriction; or any judgment, order, writ,
injunction, decree, or award which materially and
adversely affects, the business operations,
properties, assets, or condition of PERCEPTRE; and
(d) Except as included or described in the PERCEPTRE
Schedules or reflected in the most recent PERCEPTRE
balance sheet, PERCEPTRE is not a party to any oral
or written (i) contract for the employment of any
officer or employee which is not terminable on 30
days, or less notice; (ii) profit sharing, bonus,
deferred compensation, stock option, severance pay,
pension benefit or retirement plan, (iii)
agreement, contract, or indenture relating to the
borrowing of money, (iv) guaranty of any
obligation, other than one on which PERCEPTRE is a
primary obligor, for the borrowing of money or
otherwise, excluding endorsements made for
collection and other guaranties of obligations
which, in the aggregate do not exceed more than one
year or providing for payments in excess of $25,000
in the aggregate; (vi) collective bargaining
agreement; or (vii) agreement with any present or
former officer or director of PERCEPTRE.
Section 1.11 Material Contract Defaults. PERCEPTRE is not in default
in any material respect under the terms of any outstanding contract, agreement,
lease, or other commitment which is material to the business, operations,
properties, assets or condition of PERCEPTRE and there is no event of default in
any material respect under any such contract, agreement, lease, or other
commitment in respect of which PERCEPTRE has not taken adequate steps to prevent
such a default from occurring.
Section 1.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
an event of default under, or terminate, accelerate or modify the terms of any
material indenture, mortgage, deed of trust, or other material contract,
agreement, or instrument to which PERCEPTRE is a party or to which any of its
properties or operations are subject.
Section 1.13 Governmental Authorizations. Except as set forth in the
PERCEPTRE Schedules, PERCEPTRE has all licenses, franchises, permits, and other
governmental authorizations that are legally required to enable it to conduct
its business in all material respects as conducted on the date hereof. Except
for compliance with federal and state securities and corporation laws, as
hereinafter provided, no authorization, approval, consent, or order of, or
registration, declaration, or filing with, any court or other governmental body
is required in connection with the execution and delivery by PERCEPTRE of this
Agreement and the consummation by PERCEPTRE of the transactions contemplated
hereby.
Section 1.14 Compliance With Laws and Regulations. Except as set forth
in the PERCEPTRE Schedules, to the best of its knowledge PERCEPTRE has complied
with all applicable statutes and regulations of any federal, state, or other
governmental entity or agency thereof, except to the extent that noncompliance
would not materially and adversely affect the business, operations, properties,
assets, or condition of PERCEPTRE or except to the extent that noncompliance
would not result in the occurrence of any material liability for PERCEPTRE.
Section 1.15 Insurance. All of the properties of PERCEPTRE are not
fully insured for their full replacement cost.
Section 1.16 Approval of Agreement. The Management Committee of
PERCEPTRE has authorized the execution and delivery of this Agreement by
PERCEPTRE and has approved this Agreement and the transactions contemplated
hereby. No further action by the members of PERCEPTRE is necessary to approve
this Agreement and the transactions contemplated herein.
Section 1.17 Material Transactions or Affiliations. Except as
disclosed in the PERCEPTRE Schedules or otherwise disclosed herein, no officer,
director, or 5% member of PERCEPTRE has, or has had since inception of
PERCEPTRE, any known interest, direct or indirect, in any transaction with
PERCEPTRE which was material to the business of PERCEPTRE. There are no
commitments by PERCEPTRE, whether written or oral, to lend any funds, or to
borrow any money from, or enter into any other transaction with, any such
affiliated person.
Section 1.18 Labor Relations. PERCEPTRE has not had work stoppage
resulting from labor problems. To the knowledge of PERCEPTRE, no union or other
collective bargaining organization is organizing or attempting to organize any
employee of PERCEPTRE.
Section 1.19 PERCEPTRE Schedules. PERCEPTRE will deliver to ARC
within 45 days following Closing the following schedules, which are collectively
referred to as the "PERCEPTRE Schedules" and which consist of separate schedules
dated as of the date of execution of this Agreement, all certified by the chief
executive officer of PERCEPTRE as complete, true, and correct as of the date of
this Agreement in all material respects:
(a) A schedule containing complete and correct copies
of the articles of organization, and operating agreement of PERCEPTRE in effect
as of the date of this Agreement;
ARTICLE II
REPRESENTATIONS, COVENANTS, AND WARRANTIES OF ARC
As an inducement to, and to obtain the reliance of PERCEPTRE, except as
set forth in the ARC Schedules (as hereinafter defined), ARC represents and
warrants as follows:
Section 2.01 Organization. ARC's a corporation duly organized, validly
existing, and in good standing under the laws of North Carolina and has the
corporate power and is duly authorized, qualified, franchised, and licensed
under all applicable laws, regulations, ordinances, and orders of public
authorities to own all of its properties and assets, to carry on its business in
all material respects as it is now being conducted, and except where failure to
be so qualified would not have a material adverse effect on its business, there
is no jurisdiction in which it is not qualified in which the character and
location of the assets owned by it or the nature of the business transacted by
it requires qualification. Included in the ARC Schedules are complete and
correct copies of the certificate of incorporation and bylaws of ARC as in
effect on the date hereof. The execution and delivery of this Agreement does
not, and the consummation of the transactions contemplated hereby will not,
violate any provision of ARC's certificate of incorporation or bylaws. ARC as
taken all action required by law, its certificate of incorporation, its bylaws,
or otherwise to authorize the execution and delivery of this Agreement, and ARC
has full power, authority, and legal right and has taken all action required by
law, its certificate of incorporation, bylaws, or otherwise to consummate the
transactions herein contemplated.
Section 2.02 Capitalization. ARC's authorized capitalization consists
of 50,000,000 shares of common stock, $.001 par value and 1,000,000 shares of
Preferred Stock, $.001 par value (the "Original ARC Shares"). All issued and
outstanding shares are legally issued, fully paid, and non-assessable and not
issued in violation of the preemptive or other rights of any person.
Section 2.03 Subsidiaries and Predecessor Corporations. ARC does not
have any predecessor corporation(s) or subsidiaries, and does not own,
beneficially or of record, any shares of any other corporation, except as
disclosed in its filings. For purposes hereinafter, the term "ARC " also
includes those subsidiaries, if any, set forth on its filings.
Section 2.04 Securities Filings; Financial Statements.
(a) ARC is required to file forms or reports with the
Securities and Exchange Commission and is in
compliance with all such requirements (8K, 10K,
and 10Q available and are herein certified by the
officer signing this agreement as to be true and
accurate as to the filings.)
(b) Included in the ARC Schedules are (i) the audited
balance sheets of ARC as of December 31, 2002 and
the related audited statements of operations,
stockholders' equity and cash flows for the fiscal
year ended December 31, 2002, plus the unaudited
statements dated March 31, 2003, with respect
thereto, all as set forth in the SEC Reports.
(c) All such financial statements have been prepared in
accordance with generally accepted accounting
principles consistently applied throughout the
periods involved. The ARC balance sheets present
fairly as of their respective dates the financial
condition of ARC. As of the date of such balance
sheets, except as and to the extent reflected or
reserved against therein, ARC had no liabilities or
obligations (absolute or contingent) which should
be reflected in the balance sheets or the notes
thereto prepared in accordance with generally
accepted accounting principles, and all assets
reflected therein are properly reported and present
fairly the value of the assets of ARC, in
accordance with generally accepted accounting
principles. The statements of operations,
stockholders' equity and cash flows reflect fairly
the information required to be set forth therein by
generally accepted accounting principles.
(d) ARC has no liabilities with respect to the payment
of any federal, state, county, local or other taxes
(including any deficiencies, interest or
penalties), except for those listed in the
accompanying financial statements.
(e) The books and records, financial and otherwise, of
ARC are in all material aspects complete and
correct and have been maintained in accordance with
good business and accounting practices.
(f) All of ARC 's assets are reflected on its financial
statements, and, except as set forth in the ARC SEC
filings.
Section 2.05 Information. The information concerning ARC set forth in
this Agreement and the ARC Schedules is complete and accurate in all material
respects and does not contain any untrue statements of a material fact or omit
to state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading. In addition, ARC has
fully disclosed in writing to PERCEPTRE (through this Agreement or the ARC
Schedules) all information relating to matters involving ARC or its assets or
its present or past operations or activities which (i) indicated or may
indicate, in the aggregate, the existence of a greater than $25,000 liability or
diminution in value, (ii) have led or may lead to a competitive disadvantage on
the part of ARC or (iii) either alone or in aggregation with other information
covered by this Section, otherwise have led or may lead to a material adverse
effect on the transactions contemplated herein or on ARC , its assets, or its
operations or activities as presently conducted or as contemplated to be
conducted after the Closing Date, including, but not limited to, information
relating to governmental, employee, environmental, litigation and securities
matters and transactions with affiliates.
Section 2.06 Options or Warrants. There are existing Employment and
consulting options, and no warrants, calls, or commitments of any character
relating to the authorized and unissued stock of ARC. See Schedule of Options to
be sent to ARC within Forty-Five Days of closing.
Section 2.07 Absence of Certain Changes or Events. Except as disclosed
in it's filings, since the date of the most recent ARC balance sheet:
(a) There has not been (i) any material adverse change
in the business, operations, properties, assets or
condition of ARC or (ii) any damage, destruction or
loss to ARC (whether or not covered by insurance)
materially and adversely affecting the business,
operations, properties, assets or condition of ARC
(other than those listed as part of the filings of
8K, 10K and 10Q).
(b) ARC has not (i) amended its certificate of
incorporation or bylaws; (ii) declared or made, or
agreed to declare or make any payment of dividends
or distributions of any assets of any kind
whatsoever to stockholders or purchased or
redeemed, or agreed to purchase or redeem, any of
its capital stock; (iii) waived any rights of value
which in the aggregate are outside of the ordinary
course of business or material considering the
business of ARC ; (iv) made any material change in
its method of management, operation, or accounting;
(v) entered into any transactions or agreements
other than in the ordinary course of business.
(c) ARC has not (i) granted or agreed to grant any
options, calling for the issuance thereof; (ii)
borrowed or agreed to borrow any funds or incurred,
or become subject to, any material obligation or
liability (absolute or contingent) except
liabilities incurred in the ordinary course of
business or as set forth in the current filings.
(d) To the best knowledge of ARC, it has not become
subject to any law or regulation which materially
and adversely affects, or in the future, may
adversely affect, the business, operations,
properties, assets or condition of ARC.
Section 2.08 Title and Related Matters. ARC has good and marketable
title to all of its properties, inventory, interest in properties, and assets,
real and personal, which are reflected in the most recent ARC balance sheet or
acquired after that date (except properties, inventory, interest in properties,
and assets sold or otherwise disposed of since such date in the ordinary course
of business), free and clear of all liens, pledges, charges, or encumbrances
except (a) statutory liens or claims not yet delinquent; (b) such imperfections
of title and easements as do not and will not materially detract from or
interfere with the present or proposed use of the properties subject thereto or
affected thereby or otherwise materially impair present business operations on
such properties; and (c) as described in the ARC Schedules. Except as set forth
in the ARC Schedules, ARC owns, free and clear of any liens, claims,
encumbrances, royalty interests, or other restrictions or limitations of any
nature whatsoever, any and all products it is currently manufacturing, including
the underlying technology and data, and all procedures, techniques, marketing
plans, business plans, methods of management, or other information utilized in
connection with ARC 's business. Except as set forth in the ARC Schedules, no
third party has any right to, and ARC has not received any notice of
infringement of or conflict with asserted rights of others with respect to any
product, technology, data, trade secrets, know-how, propriety techniques,
trademarks, service marks, trade names, or copyrights which, individually or in
the aggregate, if the subject of an unfavorable decision, ruling or finding,
would have a materially adverse effect on the business, operations, financial
condition, income, or business prospects of ARC or any material portion of its
properties, assets, or rights.
Section 2.09 Litigation and Proceedings. There are no actions, suits,
proceedings or investigations pending or, to the knowledge of ARC after
reasonable investigation, threatened by or against ARC or affecting ARC or its
properties, at law or in equity, before any court or other governmental agency
or instrumentality, domestic or foreign, or before any arbitrator of any kind
except as disclosed in Schedule 2.09. ARC has no knowledge of any default on its
part with respect to any judgment, order, writ, injunction, decree, award, rule
or regulation of any court, arbitrator, or governmental agency or
instrumentality or any circumstance which after reasonable investigation would
result in the discovery of such default.
Section 2.10 Contracts.
(a) ARC is not a party to, and its assets, products,
technology and properties are not bound by, any
material contract, franchise, license agreement,
agreement, debt instrument or other commitments
whether such agreement is in writing or oral,
except as disclosed in its filings.
(b) All contracts, agreements, franchises, license
agreements, and other commitments to which ARC is a
party or by which its properties are bound and
which are material to the operations of ARC taken
as a whole are valid and enforceable by ARC in all
respects, except as limited by bankruptcy and
insolvency laws and by other laws affecting the
rights of creditors generally;
(c) ARC is not a party to or bound by, and the
properties of ARC are not subject to any contract,
agreement, other commitment or instrument; any
charter or other corporate restriction; or any
judgment, order, writ, injunction, decree, or award
which materially and adversely affects, the
business operations, properties, assets, or
condition of ARC.
Section 2.11 Material Contract Defaults. ARC is not in default in any
material respect under the terms of any outstanding contract, agreement, lease,
or other commitment which is material to the business, operations, properties,
assets or condition of ARC and there is no event of default in any material
respect under any such contract, agreement, lease, or other commitment in
respect of which ARC has not taken adequate steps to prevent such a default from
occurring except as disclosed in the filings.
Section 2.12 No Conflict With Other Instruments. The execution of this
Agreement and the consummation of the transactions contemplated by this
Agreement will not result in the breach of any term or provision of, constitute
a default under, or terminate, accelerate or modify the terms of, any indenture,
mortgage, deed of trust, or other material agreement or instrument to which ARC
is a party or to which any of its assets or operations are subject.
Section 2.13 Governmental Authorizations. ARC has all licenses,
franchises, permits, and other governmental authorizations, that are legally
required to enable it to conduct its business operations in all material
respects as conducted on the date hereof. Except for compliance with federal and
state securities or corporation laws, as hereinafter provided, no authorization,
approval, consent or order of, of registration, declaration or filing with, any
court or other governmental body is required in connection with the execution
and delivery by ARC of this Agreement and the consummation by ARC of the
transactions contemplated hereby.
Section 2.14 Compliance With Laws and Regulations. To the best of its
knowledge, ARC has complied with all applicable statutes and regulations of any
federal, state, or other applicable governmental entity or agency thereof,
except to the extent that noncompliance would not materially and adversely
affect the business, operations, properties, assets or condition of ARC or
except to the extent that noncompliance would not result in the occurrence of
any material liability. This compliance includes, but is not limited to, the
filing of all reports to date with federal and state securities authorities.
Section 2.15 Insurance. All of the properties of ARC are not insured
for their full replacement cost.
Section 2.16 Approval of Agreemet. The board of directors of ARC has
authorized the execution and delivery of this Agreement by ARC and has approved
this Agreement and the transactions contemplated hereby and will recommend to
its shareholders that they approve this Agreement and the transactions
contemplated hereby, if such approval is deemed to be required by any
governmental authority.
Section 2.17 Continuity of Business Enterprises. ARC has no commitment
or present intention to liquidate PERCEPTRE or sell or otherwise dispose of a
material portion of PERCEPTRE business or assets following the consummation of
the transactions contemplated hereby.
Section 2.18 Material Transactions or Affiliations. Except as
disclosed herein and in the ARC Schedules, there exists no contract, agreement
or arrangement between ARC and any predecessor and any person who was at the
time of such contract, agreement or arrangement an officer or director. ARC has
no commitment, whether written or oral, to lend any funds to, borrow any money
from, or enter into any other transaction with, any such affiliated person.
Section 2.19 Labor Relations. ARC has not had work stoppage resulting
from labor problems. To the knowledge of ARC, no union or other collective
bargaining organization is organizing or attempting to organize any employee of
ARC.
Section 2.20 ARC Schedules. ARC has delivered to PERCEPTRE the
following schedules (8K, 10Q and 10K) which are collectively referred to as the
" ARC Schedules" and which consist of separate schedules, which are dated the
date of this Agreement, all certified by the chief executive officer of ARC to
be complete, true, and accurate in all material respects as of the date of this
Agreement.
Section 2.21 Bank Accounts; Power of Attorney. Set forth in Schedule
2.21 is a true and complete list of (a) all accounts with banks, money market
mutual funds or securities or other financial institutions maintained by ARC
within the past twelve (12) months, the account numbers thereof, and all persons
authorized to sign or act on behalf of ARC, (b) all safe deposit boxes and other
similar custodial arrangements maintained by ARC within the past twelve (12)
months, and (c) the names of all persons holding powers of attorney from ARC or
who are otherwise authorized to act on behalf of ARC with respect to any matter,
other than its officers and directors, and a summary of the terms of such powers
or authorizations.
Section 2.22 Valid Obligation. This Agreement and all agreements and
other documents executed by ARC in connection herewith constitute the valid and
binding obligation of ARC , enforceable in accordance with its or their terms,
except as may be limited by bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and subject to the
qualification that the availability of equitable remedies is subject to the
discretion of the court before which any proceeding there or may be brought.
ARTICLE III
PLAN OF EXCHANGE
Section 3.01 The Exchange. On the terms and subject to the conditions
set forth in this Agreement, on the Closing Date (as defined in Section 3.03),
PERCEPTRE shall deliver the Assets.
In exchange for the transfer of the Assets by PERCEPTRE, ARC shall
issue to PERCEPTRE: 215,350 shares of Class B Common Stock with the rights and
preferences set forth on Schedule 3.01 of ARC to be issued to PERCEPTRE.
For purposes of this Agreement, all accounting terms such as "assets",
"tangible", "liabilities", "net income", etc. shall be determined by reference
to U.S. generally accepted accounting principles, consistently applied, as
interpreted or modified by Regulation S-X promulgated under the Securities
Exchange Act of 1934, and shall not include the cumulative effect of accounting
changes resulting from the transactions contemplated hereby.
Section 3.02 Closing. The closing ("Closing") of the transactions
contemplated by this Agreement shall be on a date and at such time as the
parties may agree ("Closing Date") but not later than July 31, 2003, Such
Closing shall take place at a mutually agreeable time and place.
Section 3.04 Closing Events. At the Closing, ARC and PERCEPTRE shall
execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged,
and delivered) any and all certificates, opinions, financial statements,
schedules, agreements, resolutions, rulings or other instruments required by
this Agreement to be so delivered at or prior to the Closing, together with such
other items as may be reasonably requested by the parties hereto and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby.
ARTICLE IV
SPECIAL COVENANTS
Section 4.01 Access to Properties and Records. ARC and PERCEPTRE will
each afford to the officers and authorized representatives of the other full
access to the properties, books and records of ARC or PERCEPTRE, as the case may
be, in order that each may have a full opportunity to make such reasonable
investigation as it shall desire to make of the affairs of the other, and each
will furnish the other with such additional financial and operating data and
other information as to the business and properties of ARC or PERCEPTRE, as the
case may be, as the other shall from time to time reasonably request. Without
limiting the foregoing, as soon as practicable after the end of each fiscal
quarter (and in any event through the last fiscal quarter prior to the Closing
Date), each party shall provide the other with quarterly internally prepared and
unaudited financial statements.
Section 4.02 Delivery of Books and Records. At the Closing, PERCEPTRE
shall deliver to ARC the originals of the company minute books, books of
account, contracts, records, and all other books or documents of PERCEPTRE now
in the possession of PERCEPTRE or its representatives.
Section 4.03 Third Party Consents and Certificates. ARC and PERCEPTRE
agree to cooperate with each other in order to obtain any required third party
consents to this Agreement and the transactions herein contemplated.
ARTICLE V
CONDITIONS PRECEDENT TO OBLIGATIONS OF ARC
The obligations of ARC under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 5.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by PERCEPTRE in this Agreement were true
when made and shall be true at the Closing Date with the same force and effect
as if such representations and warranties were made at and as of the Closing
Date (except for changes therein permitted by this Agreement). PERCEPTRE shall
have performed or complied with all covenants and conditions required by this
Agreement to be performed or complied with by PERCEPTRE prior to or at the
Closing. ARC shall be furnished with a certificate, signed by a duly authorized
executive officer of PERCEPTRE and dated the Closing Date, to the foregoing
effect.
Section 5.02 Officer's Certificate. ARC shall have been furnished with
a certificate dated the Closing Date and signed by a duly authorized officer of
PERCEPTRE to the effect that no litigation, proceeding, investigation, or
inquiry is pending, or to the best knowledge of PERCEPTRE threatened, which
might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement, or, to the extent not disclosed in
the PERCEPTRE Schedules, by or against PERCEPTRE, which might result in any
material adverse change in any of the assets, properties, business, or
operations of PERCEPTRE.
Section 5.03 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any change in the financial condition, business,
or operations of PERCEPTRE nor shall any event have occurred which, with the
lapse of time or the giving of notice, is determined to be unacceptable using
the criteria set forth in Section 1.19.
Section 5.04 Good Standing. ARC shall have received a certificate of
good standing from all necessary governmental authorities, dated as of a date
within ten days of the Closing Date certifying that ARC is in good standing as a
corporation.
Section 5.05 Approval by PERCEPTRE. The Exchange shall have been
approved by PERCEPTRE as required under the laws of New Mexico.
Section 5.06 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 5.07 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of ARC and PERCEPTRE after the Closing Date on the basis as presently
operated shall have been obtained.
Section 5.08 Other Items.
(a) ARC shall have received such further opinions,
documents, certificates or instruments relating to
the transactions contemplated hereby as ARC may
reasonably request.
(b) ARC shall have received the executed XXXX OF SALE
set forth in Schedule 5.08.
ARTICLE VI
CONDITIONS PRECEDENT TO OBLIGATIONS OF PERCEPTRE
The obligations of PERCEPTRE under this Agreement are subject to the
satisfaction, at or before the Closing Date, of the following conditions:
Section 6.01 Accuracy of Representations and Performance of Covenants.
The representations and warranties made by ARC in this Agreement were true when
made and shall be true as of the Closing Date (except for changes therein
permitted by this Agreement) with the same force and effect as if such
representations and warranties were made at and as of the Closing Date.
Additionally, ARC shall have performed and complied with all covenants and
conditions required by this Agreement to be performed or complied with by ARC.
Prior to the Closing Date or at the Closing, PERCEPTRE shall have been furnished
with certificates, signed by duly authorized executive offers of ARC and dated
as of the Closing Date.
Section 6.02 Officer's Certificate. PERCEPTRE shall have been
furnished with certificates dated the Closing Date and signed by duly authorized
executive officers of ARC, to the effect that no litigation, proceeding,
investigation or inquiry is pending, or to the best knowledge of ARC threatened,
which might result in an action to enjoin or prevent the consummation of the
transactions contemplated by this Agreement or, to the extent not disclosed in
the ARC Schedules, by or against ARC, which might result in any material adverse
change in any of the assets, properties or operations of ARC.
Section 6.03 No Material Adverse Change. Prior to the Closing Date,
there shall not have occurred any change in the financial condition, business or
operations of ARC nor shall any event have occurred which, with the lapse of
time or the giving of notice, is determined to be unacceptable using the
criteria set forth in Section 2.20.
Section 6.04 Good Standing. PERCEPTRE shall have received a
certificate of good standing from all necessary governmental authorities or
other appropriate office, dated as of a date within ten days of the Closing Date
certifying that PERCEPTRE is in good standing as a limited liability company in
the State of New Mexico and has filed all tax returns required to have been
filed by it to date and has paid all taxes reported as due thereon.
Section 6.05 No Governmental Prohibition. No order, statute, rule,
regulation, executive order, injunction, stay, decree, judgment or restraining
order shall have been enacted, entered, promulgated or enforced by any court or
governmental or regulatory authority or instrumentality which prohibits the
consummation of the transactions contemplated hereby.
Section 6.06 Consents. All consents, approvals, waivers or amendments
pursuant to all contracts, licenses, permits, trademarks and other intangibles
in connection with the transactions contemplated herein, or for the continued
operation of ARC and PERCEPTRE after the Closing Date on the basis as presently
operated shall have been obtained.
Section 6.07 Other Items. PERCEPTRE shall have received further
opinions, documents, certificates, or instruments relating to the transactions
contemplated hereby as PERCEPTRE may reasonably request.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Governing Law. This Agreement shall be governed by,
enforced, and construed under and in accordance with the laws of the United
States of America and, with respect to the matters of state law, with the laws
of the State of North Carolinawithout giving effect to principles of conflicts
of law thereunder. Each of the parties (a) irrevocably consents and agrees that
any legal or equitable action or proceedings arising under or in connection with
this Agreement shall be brought exclusively in the federal courts of the United
States, (b) by execution and delivery of this Agreement, irrevocably submits to
and accepts, with respect to any such action or proceeding, generally and
unconditionally, the jurisdiction of the aforesaid court, and irrevocably waives
any and all rights such party may now or hereafter have to object to such
jurisdiction.
Section 7.02 Notices. Any notice or other communications required or
permitted hereunder shall be in writing and shall be sufficiently given if
personally delivered to it or sent by telecopy, overnight courier or registered
mail or certified mail, postage prepaid, addressed as follows:
If to ARC , to: Information Architects Corporation
0000 X. Xxxx Xxxxx Xxxxxxx, Xxxxx 000
Xxxx, XX 00000
If to PERCEPTRE, to: Perceptre LLC
Xxxxxxx X. Xxxxxxxxx, Manager
0000 Xxxxxx Xxxx XX
Xxxxxxxxxxx, Xxx Xxxxxx 00000
or such other addresses as shall be furnished in writing by any party in the
manner for giving notices hereunder, and any such notice or communication shall
be deemed to have been given (i) upon receipt, if personally delivered, (ii) on
the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if
transmitted by telecopy and receipt is confirmed by telephone and (iv) three (3)
days after mailing, if sent by registered or certified mail.
Section 7.03 Attorney's Fees. In the event that either party
institutes any action or suit to enforce this Agreement or to secure relief from
any default hereunder or breach hereof, the prevailing party shall be reimbursed
by the losing party for all costs, including reasonable attorney's fees,
incurred in connection therewith and in enforcing or collecting any judgment
rendered therein.
Section 7.04 Confidentiality. Each party hereto agrees with the other
that, unless and until the transactions contemplated by this Agreement have been
consummated, it and its representatives will hold in strict confidence all data
and information obtained with respect to another party or any subsidiary thereof
from any representative, officer, director or employee, or from any books or
records or from personal inspection, of such other party, and shall not use such
data or information or disclose the same to others, except (i) to the extent
such data or information is published, is a matter of public knowledge, or is
required by law to be published; or (ii) to the extent that such data or
information must be used or disclosed in order to consummate the transactions
contemplated by this Agreement. In the event of the termination of this
Agreement, each party shall return to the other party all documents and other
materials obtained by it or on its behalf and shall destroy all copies, digests,
work papers, abstracts or other materials relating thereto, and each party will
continue to comply with the confidentiality provisions set forth herein.
Section 7.05 Public Announcements and Filings. Unless required by
applicable law or regulatory authority, none of the parties will issue any
report, statement or press release to the general public, to the trade, to the
general trade or trade press, or to any third party (other than its advisors and
representatives in connection with the transactions contemplated hereby) or file
any document, relating to this Agreement and the transactions contemplated
hereby, except as may be mutually agreed by the parties. Copies of any such
filings, public announcements or disclosures, including any announcements or
disclosures mandated by law or regulatory authorities, shall be delivered to
each party at least one (1) business day prior to the release thereof.
Section 7.06 Schedules; Knowledge. Each party is presumed to have full
knowledge of all information set forth in the other party's schedules delivered
pursuant to this Agreement.
Section 7.07 Third Party Beneficiaries. This contract is strictly
between ARC and PERCEPTRE, and, except as specifically provided, no director,
officer, stockholder, member (other than the PERCEPTRE Members), employee,
agent, independent contractor or any other person or entity shall be deemed to
be a third party beneficiary of this Agreement.
Section 7.08 Expenses. Each of ARC and PERCEPTRE will bear their own
respective expenses, including legal, accounting and professional fees, incurred
in connection with the Exchange or any of the other transactions contemplated
hereby.
Section 7.11 Entire Agreement. This Agreement represents the entire
agreement between the parties relating to the subject matter thereof and
supersedes all prior agreements, understandings and negotiations, written or
oral, with respect to such subject matter.
Section 7.12 Survival; Termination. The representations, warranties,
and covenants of the respective parties shall survive the Closing Date and the
consummation of the transactions herein contemplated for a period of two years.
Section 7.13 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument.
Section 7.14 Amendment or Waiver. Every right and remedy provided
herein shall be cumulative with every other right and remedy, whether conferred
herein, at law, or in equity and may be enforced concurrently herewith, and no
waiver by any party of the performance of any obligation by the other shall be
construed as a waiver of the same or any other default then, theretofore, or
thereafter occurring or existing. At any time prior to the Closing Date, this
Agreement may by amended by a writing signed by all parties hereto, with respect
to any of the terms contained herein, and any term or condition of this
Agreement may be waived or the time for performance may be extended by a writing
signed by the party or parties for whose benefit the provision is intended.
Section 7.15 Best Efforts. Subject to the terms and conditions herein
provided, each party shall use its best efforts to perform or fulfill all
conditions and obligations to be performed or fulfilled by it under this
Agreement so that the transactions contemplated hereby shall be consummated as
soon as practicable. Each party also agrees that it shall use its best efforts
to take, or cause to be taken, all actions and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.
Section 7.16 Counterparts. This Agreement may be executed by facsimile
and in several counterparts, each of which will be deemed an original, but all
together will constitute one and the same Agreement.
SIGNATURES
IN WITNESS WHEREOF, the corporate parties hereto have caused this Agreement to
be executed by their respective officers, hereunto duly authorized, as of the
date first above written.
Information Architects Corporation
BY:_____________________________
Chief Executive Officer
Perceptre LLC.
BY:_____________________________
Managing Partner
SCHEDULE 1.08
LIST OF PERCEPTRE ASSETS AND DISCLOSURE OF ANY RELATED LIABILITIES
EXHIBIT "A"
That certain computer software program and database commonly referred
to as "perceptre" together with all appurtenant intellectual property rights
thereto and all versions and enhancements of same and all future products
developed or derived therefrom including, without limitation all trademark
rights, tradename rights, discoveries, concepts and ideas (whether or not
patentable or protectible by copyright), research and development, technical
information, drawings and specifications, trade secrets, copyrights, patents,
goodwill, contract rights, licensing rights, marketing rights and materials,
distribution rights, associate network rights, source codes, object codes,
flowcharts, algorithms, coding sheets, compilers, assemblers, design concepts,
routines and subroutines, any and all backup data whether stored on tape,
server, hard drive, zip drive, floppy disk, compact disk and/or any other type
of backup system, and all appurtenant and related property and business rights
thereto, which are owned, held or used by Perceptre LLC (the "Assets").
SCHEDULE 3.01
INFORMATION ARCHITECTS CORPORATION
SERIES B PREFERRED STOCK, $0.001 PAR VALUE
CERTIFICATE OF DESIGNATION OF PREFERENCES, RIGHTS, AND LIMITATIONS
Pursuant to Section 55-6-02 of the North Carolina Business
Corporation Act (the "NCBCA"), Information Architects Corporation, a North
Carolina corporation (the "Corporation"), hereby certifies that:
FIST: Pursuant to the authority of the Board of Directors of
the Corporation pursuant to its Articles of Incorporation and Section 55-6-02 of
the NCBCA, the Board of Directors of the Corporation, by resolutions duly
adopted effective as of April 11,2003 has (1) designated a series of Preferred
Stock, par value $.001 per share, of the Corporation to be "Series B Preferred
Stock" consisting of 215,350 shares of the authorized but unissued Preferred
Stock, (2) authorized the issuance of a maximum of 215,350 shares of Series B
Preferred Stock (the "Series B Preferred"), and (3) set the rights, preferences,
limitations, and other terms and conditions of the Series B Preferred Stock.
Approval of the shareholders of the Corporation was not required.
SECOND: The Series B Preferred of the Corporation created by
the resolutions duly adopted by the Board of Directors of the Corporation shall
have the following designation, number of shares, preferences, rights,
limitations, and other
terms and conditions:
1. Designation and Rank. A total of 215,350 shares of Preferred
Stock, $0.001 par value per share, shall be designated "Series B Preferred
Stock". The Series B Preferred shall rank (i) prior to the common stock, par
value $.001 per share, and to all other classes and series of equity securities
of the Corporation which by their terms do not rank senior to the Series B
Preferred ("Junior Stock") and (ii) junior to any class or series of equity
securities which by its terms shall rank senior to the Series B Preferred,
including the Series A Preferred Stock. The Series B Preferred shall be
subordinate to and rank junior to all indebtedness of the Corporation now or
hereafter outstanding.
2. Dividends. If the Board of Directors shall declare a cash
dividend payable upon the outstanding shares of common stock of the Corporation
out of funds of the Corporation legally available therefor pursuant to the
NCBCA, the Board of Directors shall at the same time declare a dividend payable
on each share of the Series B Preferred in the amount of the dividend payable on
the number of shares of common stock into which each such share of Series B
Preferred could be converted pursuant to Section 5, such number to be determined
one day before the record date for the determination of holders of common stock
entitled to receive such dividends. Dividends on the Series B Preferred will be
in preference to dividends paid on the common stock and any Junior Stock.
So long as any shares of Series B Preferred are outstanding, the
Corporation shall not declare, pay or set apart for payment any dividend or make
any distribution on any Junior Stock (other than dividends or distributions
payable in additional shares of Junior Stock), unless at the time of such
dividend or distribution the Corporation shall have paid all accrued and unpaid
dividends on the outstanding shares of Series B Preferred.
3. Liquidation Preference.
a. Preferential Amounts. In the event of any liquidation,
dissolution, or winding up of the Corporation (a "Liquidation
Event"), either voluntarily or involuntarily, the holders of
the Series B Preferred shall be entitled to receive, prior and
in preference to any payment or distribution to the holders of
common stock or any other shares of capital stock ranking
junior as to liquidation, dissolution, or winding up to the
Series B Preferred, an amount equal to $0 per share plus the
amount of any dividend declared but then unpaid with respect
to the Series B Preferred, if any (the "Initial Payment").
After the Initial Payment and the payment of any other
distribution that may be required with respect to any other
series of Preferred Stock that may from time to time come into
existence, holders of Series B Preferred, holders of other
series of Preferred Stock, and the holders of Common Stock
shall participate ratably (assuming conversion of all
Preferred Stock into Common Stock).
b. Insufficient Assets. If the assets of the Company are not
sufficient to pay in full the Initial Payment plus any accrued
and unpaid dividends payable to the holders of outstanding
shares of the Series B Preferred and any series of preferred
stock or any other class of stock on parity, as to rights on
liquidation, dissolution, or winding up, with the Series B
Preferred, then all of such assets will be distributed among
the holders of the Series B Preferred and the other classes of
stock on parity with the Series B Preferred, if any, ratably
in accordance with the respective amounts that would be
payable on such shares if all amounts payable thereon were
paid in full.
c. Deemed Liquidation. For purposes of this Section 3, a
"Liquidation Event" includes (i) a sale of all or
substantially all of the assets of the Corporation or (ii) a
merger, acquisition, or similar transaction that results in
the Corporation's shareholders immediately prior to such
transaction holding less than 50% of the voting power of the
surviving, continuing, or purchasing entity.
d. Non-cash Distribution. If any of the assets of the Corporation
are to be distributed to shareholders other than in cash under
this Section3 or for any purpose, the value of the assets to
be distributed will be deemed its fair market value. Any
securities to be distributed to the shareholders shall be
valued as follows:
i. If traded on a securities exchange, the value shall
be deemed to be the average of the closing prices of
the securities on such exchange over the thirty (30)
day period ending three (3) business days prior to
the closing of the transaction;
ii. If actively traded over-the-counter, the value shall
be deemed to be the average of the closing bid prices
over the thirty (30) day period ending three (3)
business days prior to the closing of the
transaction; and
iii. If there is no active public market, the value shall
be the fair market value thereof, as determined by
the Board of Directors of the Corporation.
4. Voting Rights. Except as set forth herein or as otherwise
required by law, the holder of each share of Series B Preferred shall have the
right to 200 votes for each share of preferred stock on the record date for
determination of the shareholders entitled to vote on such matters, or, if no
such record date is established, at the date such vote is taken or any written
consent of shareholders is solicited, such votes to be counted together with all
other shares of capital stock of the Corporation having general voting power and
not counted separately as a class, except as set forth in the Articles of
Incorporation. Except as otherwise required by law or as set forth in the
Articles of Incorporation, the holders of Series B Preferred shall not vote
separately as a class. Holders of Series B Preferred shall be entitled to notice
of any shareholders' meeting in accordance with the Bylaws of the Corporation.
5. Conversion. The holders of the Series B Preferred have
conversion rights as follows:
a. Automatic Conversion. Subject to adjustment as set
forth in this Section 5, each share of Series B
Preferred shall be converted automatically into 100
shares of fully paid and nonassessable shares of
common stock (the "Conversion Rate") without any
further action by the holders of such shares
b. Mechanics of Conversion. No fractional shares of
common stock shall be issued upon conversion of the
Series B Preferred. The Corporation shall round up
fractional shares to which the holder would
otherwise be entitled to the nearest whole number.
c. Reservation of Stock Issuable upon Conversion. The
Corporation shall at all times use its best efforts
to reserve and keep available out of its authorized
and unissued shares of common stock, solely for the
purpose of effecting the conversion of the shares of
the Series B Preferred, such number of its shares of
common stock as shall from time to time be
sufficient to effect the conversion of all
outstanding shares of the Series B Preferred.
d. Adjustments for Stock Dividends, Subdivisions,
Combinations, or Consolidations of Common Stock. If
the outstanding shares of common stock shall be
subdivided (by stock dividends, splits, or
otherwise), into a greater number of shares of
preferred stock, the Conversion Rate then in effect
shall, concurrently with the effectiveness of such
subdivision, be proportionately increased. In the
event the outstanding shares of common stock shall
be combined or consolidated, by reclassification or
otherwise, into a lesser number of shares of common
stock, the Conversion Rate then in effect shall,
concurrently with the effectiveness of such
combination or consolidation, be proportionately
decreased.
e. Adjustments for Other Distributions. If the
Corporation at any time or from time to time makes,
or fixes a record date for the determination of
holders of common stock entitled to receive any
distribution payable in securities or assets of the
Corporation other than shares of common stock, in
each such event provision shall be made so that the
holders of Series B Preferred shall receive upon
conversion thereof, in addition to the number of
shares of common stock receivable thereupon, the
amount of securities or assets of the Corporation
which they would have received had their Series B
Preferred been converted into common stock on the
date of such event and had they thereafter, during
the period from the date of such event to and
including the date of conversion, retained such
securities or assets receivable by them as aforesaid
during such period, subject to all other adjustments
called for during such period under this Section 5
with respect to the rights of the holders of the
Series B Preferred.
f. Adjustments for Reclassification, Exchange and
Substitution. If the Common Stock issuable upon
conversion of the Series B Preferred shall be
changed into the same or a different number of
shares of any other class or classes of stock,
whether by capital reorganization, reclassification,
or otherwise (other than a subdivision or
combination of shares provided for above), then and
in each such event the holder of each share of
Series B Preferred shall have the right thereafter
to convert such share into the kind and amount of
shares of stock and other securities and property
receivable upon such reorganization or
reclassification or other change by holders of the
number of shares of common stock that would have
been subject to receipt by the holders upon
conversion of the Series B Preferred immediately
before that change, all subject to further
adjustment as provided herein.
g. Certificate as to Adjustments. Upon the occurrence
of each adjustment or readjustment of the Conversion
Rate pursuant to this Section 5, the Corporation, at
its expense, shall promptly compute such adjustment
or readjustment in accordance with the terms hereof
and furnish to each holder of Series B Preferred a
certificate setting forth such adjustment or
readjustment and showing in detail the facts upon
which such adjustment or readjustment is based. The
Corporation shall, upon the written request at any
time of any holder of Series B Preferred, furnish or
cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and
readjustments, (ii) the Conversion Rate at the time
in effect, and (iii) the number of shares of Common
Stock and the amount, if any, of other property
which at the time would be received upon the
conversion of Series B Preferred.
THIRD: These Articles of Amendment were duly adopted by the Board of
Directors of the Corporation in the manner and by the vote required by the
NCBCA.
IN WITNESS WHEREOF, the Corporation has caused these Articles
of Amendment to be executed as of _________________, 2003.
INFORMATION ARCHITECTS CORPORATION
By:
Xxxxxxx X. Xxxxxxxxx, Chief Executive Officer
Schedule 5.08
XXXX OF SALE
XXXX OF SALE
PERCEPTRE LLC, a New Mexico limited liability company ("Perceptre"),
pursuant to that certain Asset Purchase Agreement dated June , 2003 (the
"Agreement"), by and between Perceptre and Information Architects Corporation, a
North Carolina corporation ("ARC") and in consideration of the Agreement has
granted, bargained and sold and pursuant to the terms of the Agreement hereby
does grant, bargain and sell to ARC, whose address is 0000 X. Xxxx Xxxxx
Xxxxxxx, Xxxxx 000, Xxxx, Xxxxxxx 00000, the property defined and referred to in
the Agreement as the "Assets" and more fully set forth and described on Exhibit
"A" hereto.
Perceptre, for itself, and its assigns, all and singular, hereby
conveys the said assets unto ARC and its purchasers and assigns forever and
shall warrant good and merchantable title thereto as against Perceptre and
all and every person whomsoever claiming by and through Perceptre and shall and
will warrant and forever defend against all such claims.
IN WITNESS WHEREOF, Perceptre LLC has executed this Xxxx of Sale this
__ day of June, 2003.
PERCEPTRE LLC
a New Mexico limited liability company
By
Xxxxxxx X. Xxxxxxxxx, Manager
ACKNOWLEDGMENT
STATE OF NEW MEXICO )
)ss.
COUNTY OF BERNALILLO )
This instrument was acknowledged before me on June , 2003 by Xxxxxxx
X. Xxxxxxxxx, Manager of Perceptre LLC, a New Mexico limited liability company.
NOTARY PUBLIC
My commission
expires:
